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Slower volume growth may curb Hindustan Zinc's future dividend payout

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Hindustan Zinc Ltd deferred its FY21 volume guidance to the next quarter even as covid-19 disruptions marred its volume-led growth.

Volumes slipped in the fourth quarter due to the lockdown in end-March. This could lower cash flows in the coming quarters. Shares of HZL fell about 2.4% on Friday and the ongoing slowdown could continue to keep the stock under pressure.

While mining has been upbeat, sales of zinc were about 2% lower year-on-year. Sales of lead dropped 8%, while silver fell 25%.

All this shows that demand for mined metals has shrunk despite just 10 days of the lockdown. In the coming quarters, demand will be a key concern.

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