Hindustan Zinc shares are expected to attract significant attention in Wednesday's trading session following a 6% decline in silver prices to approximately $73 per troy ounce. The drop comes as investors engaged in year-end profit booking near record highs, despite both silver and related metals remaining on track to close 2025 with historic annual gains.

Silver's Exceptional Performance in 2025

Silver has delivered remarkable returns of 157% in 2025, with prices surging to around $82 at spot levels. The rally has been driven by multiple factors including expectations of aggressive monetary easing, heightened geopolitical risks, and robust investment demand. Key triggers supporting the surge include low supply conditions, rising demand, and an easing monetary policy cycle by central banks globally.

Hindustan Zinc's Strategic Position

Hindustan Zinc holds a prominent position as one of the world's top five silver producers, with an annual production capacity of approximately 800 tonnes. Silver represents a significant profit driver for the company, contributing nearly 38% of its EBIT. This substantial exposure positions the company as a direct beneficiary of silver price movements.

The company has demonstrated strong stock performance, delivering gains of 41% in 2025 and 28% over the past month. With nearly 37% of its second half FY26 silver volumes hedged at $37, most of the upside from higher prices is expected to flow through in FY27, providing a meaningful boost to EBITDA.

Analyst Outlook and Projections

Jefferies initiated coverage on Hindustan Zinc with a Buy rating and a target price of ₹660. The brokerage views the company as a clear beneficiary of higher silver and zinc prices, supported by its first-decile zinc mining costs. While volume growth is expected to remain modest, earnings momentum is projected to stay strong.

The stock currently trades at 9.2x FY27E EV/EBITDA, above its long-term average of 7.3x. However, Jefferies believes this premium is justified given silver's rising share in overall profitability.

Operational Efficiency Improvements

Hindustan Zinc has achieved significant cost efficiency improvements. Zinc cost of production, excluding royalty, has declined from a peak of $1,257 in FY23 to $1,002 in the first half of FY26. This improvement has been driven by better ore grades, increased use of domestic coal, softer international coal prices, and a growing share of renewable energy.

The company has assumed conservative silver prices of $56-60 for the second half of FY26 through FY28, which are approximately 3-10% below prevailing spot levels. This conservative approach provides potential upside if silver prices remain elevated.

Market Outlook

Experts believe silver remains structurally well-supported despite entering a consolidation phase. Motilal Oswal Financial Services maintains a buy-on-dips approach with a staggered investment strategy. The firm notes that silver's 2025 rally is being driven by real metal scarcity rather than speculative positioning, with physical deficits, policy-driven supply restrictions, and concentrated inventories increasingly dictating prices.

Hindustan Zinc Limited has completed the payment of ₹63.90 lakh compounding fees following the receipt of a final order from the Regional Director. The company made the payment after receiving the final order on December 30, 2025, concluding the regulatory compliance process that began with an interim order in December.

Final Order and Payment Completion

Hindustan Zinc Limited received the final order from the Office of Regional Director, North Western Region, Ministry of Corporate Affairs on December 30, 2025, at 02:00 PM IST. The company promptly paid the compounding fees aggregating to ₹63.90 lakh, which included amounts imposed on both the company and ex-Whole Time Directors.

Regulatory Timeline and Process

The regulatory process began with an interim order dated December 16, 2025, which was received via email on December 17, 2025. Parent company Vedanta Limited had filed the initial regulatory disclosure under SEBI Regulation 30 on December 17, 2025, at 08:13 PM IST, informing stock exchanges about the penalty levy.

Nature of Compliance Violation

The penalty relates to Hindustan Zinc Limited's failure to mention Director Identification Numbers (DIN) of Directors as required under Section 158 of the Companies Act during financial years 2014-15 to 2020-21. The company acknowledged that the lapse was purely inadvertent and has been fully rectified from financial year 2022 onwards.

Impact Assessment and Current Status

Hindustan Zinc Limited confirmed no impact on its financial, operational, or other activities due to this penalty. The company has maintained transparency by ensuring all required disclosures are available on stock exchange websites, completing its regulatory obligations under SEBI Listing Regulations.