Shares of Hindustan Zinc rallied sharply on Friday, January 23, climbing over 6% to touch a record high of ₹709.95. The surge came as silver prices scaled another all-time peak, benefiting from rising geopolitical risks and growing unease around US economic and policy stability. Hindustan Zinc, one of India’s largest silver producers, has emerged as a key beneficiary of the ongoing rally in precious metals.
Silver prices extended their blistering rally on Friday, with MCX silver futures jumping nearly 4% to hit a fresh all-time high of ₹3,39,927 per kilogram. The sharp move was supported by a weaker US dollar, escalating geopolitical tensions, and renewed concerns around the independence of the US Federal Reserve, all of which boosted safe-haven demand for precious metals.
In the international market, silver climbed 2.5% to $98.60 per ounce, inching closer to the psychologically important $100 level.
Global factors driving silver’s surge
Market sentiment has been shaped by a mix of geopolitical and macroeconomic developments. While US President Donald Trump recently softened earlier warnings about imposing trade tariffs on European nations, a separate agreement aimed at easing tensions over Greenland included the deployment of US missiles, the granting of mining rights, and a stronger NATO security presence on the island.
At the same time, investors are closely tracking developments on the US monetary policy front. Markets are awaiting Trump’s announcement on the next Federal Reserve chair, after he said interviews have concluded and a candidate has been finalized. Expectations that the new leadership could be more dovish have strengthened bets on additional interest-rate cuts later this year, following three consecutive rate reductions. Lower rates are typically supportive for non-yielding assets like gold and silver, adding further momentum to the precious metals rally.
Hindustan Zinc Share performance
Hindustan Zinc’s stock performance reflects the strength of the silver-led rally. The share price has surged over 87% from its 52-week low of ₹378.65, recorded in March 2025.
Across shorter timeframes, the Vedanta-owned stock has delivered strong gains, rising 48% over the past one year, 57% in the last six months, 45% in the last three months, and 25% in the past one month. Over the long term, Hindustan Zinc has turned into a multibagger, generating returns of around 155% over the past five years.
Hindustan Zinc Q3FY26 results
Hindustan Zinc reported a robust set of earnings for Q3FY26, comfortably beating Street expectations across profit, revenue and operating metrics. The strong performance was driven by record production, firm commodity prices, and a sharp reduction in costs.
The Vedanta Group company posted a standalone net profit of ₹3,879 crore, marking a 46.5% year-on-year increase from ₹2,647 crores. Revenue from operations rose 27.5% YoY to ₹10,922 crore, compared with ₹8,556 crore in the year-ago quarter.
Operating performance was equally impressive. EBITDA jumped 34.7% YoY to ₹6,055 crore, comfortably ahead of the estimated ₹Rs 5,614 crore. EBITDA margin expanded to 55%, up from 52% a year earlier, supported by lower zinc production costs and better operating leverage.
The company said Q3FY26 marked its highest-ever quarterly revenue and profit, aided by higher metal output, stronger zinc and silver prices, and a sharp fall in costs. Zinc cost of production (excluding royalty) dropped to a five-year low of USD 940 per tonne, down 10% year-on-year, driven by lower power costs and higher by-product realizations.
EBITDA margins expanded by 310 basis points to 55.1%, while profit after tax rose 46% YoY. Silver accounted for nearly 44% of total EBIT during the quarter, underscoring its growing importance to earnings.
Operationally, Hindustan Zinc delivered record third-quarter mined metal production of 276 kilo tonnes and refined metal production of 270 kilo tonnes. Silver output increased 10% sequentially, contributing 44% of profits during the quarter.
Time to buy?
IIFL Capital has an ‘ADD’ call on Hindustan Zinc (HZL) with a target price of ₹712, implying an upside of about 5% from current levels. The brokerage values the company at 10x EV/EBITDA, noting that every USD 10 per ounce change in silver prices impacts HZL’s fair value by around ₹59 per share.
The brokerage highlighted HZL’s strong Q3FY26 performance, with EBITDA rising 36% quarter-on-quarter and 35% year-on-year, coming in 8% above consensus estimates. The outperformance was driven by sharply lower costs, with zinc cost of production (excluding royalty) falling to $940 per tonne, the lowest level in five years. As a result, EBITDA margins expanded by 310 basis points to 55.1%.
While growth projects remain on track, IIFL Capital expects volume growth to stay muted in the near term, at around 2.5% CAGR over FY26–FY28. The brokerage sees silver prices as the key earnings driver, estimating EBITDA growth of around 15% CAGR over the same period.
“We expect silver to stabilize at structurally higher levels, around $60 per ounce, even though near-term moves remain highly volatile,” IIFL Capital said.
Strong cash flows are expected to support elevated dividend payouts of around 3%, while key risks include a sharp fall in silver prices, a global slowdown, and further stake sales by Vedanta or the government.
Disclaimer: The views and recommendations made above are those of individual analysts or broking companies, and not of Mint. We advise investors to check with certified experts before making any investment decisions.
