Hindustan Zinc Shares Rise 3% as Silver Hits Fresh Record High Above $83
Hindustan Zinc shares gained 3.2% to ₹627.00 following silver's record high of $83.56 per troy ounce. The company, ranking among top five global silver producers with 800 tonnes annual capacity, derives 38% of EBIT from silver operations. Technical analysts maintain positive outlook with ₹650-680 upside targets, while Jefferies initiated Buy rating with ₹660 target price.
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Hindustan Zinc shares surged as much as 3.2% to an intraday high of ₹627.00 on Monday, January 12, tracking a sharp rally in silver prices after the precious metal hit a fresh record high of $83.56 per troy ounce. Safe-haven demand strengthened amid escalating geopolitical tensions and concerns over Federal Reserve leadership.
Silver Price Rally Drives Performance
Silver March futures on the MCX traded 3.9% higher at ₹2,62,650.00 per kilogram, gaining ₹9,925.00 from the previous close. The metal's surge was attributed to safe-haven demand following escalating tensions between the US and Iran, along with reports of potential criminal indictment threats against Federal Reserve Chair Jerome Powell by the Trump administration.
| Metric: | Value |
|---|---|
| Intraday High: | ₹627.00 |
| Daily Gain: | 3.2% |
| Two-Session Gain: | 6.0% |
| Silver Futures Gain: | 3.9% |
| MCX Silver Price: | ₹2,62,650.00/kg |
Company's Silver Exposure
Hindustan Zinc ranks among the world's top five silver producers, with significant exposure to the precious metal's price movements. The company's silver operations contribute substantially to its profitability profile.
| Parameter: | Details |
|---|---|
| Annual Silver Capacity: | 800 tonnes |
| EBIT Contribution: | 38% |
| Global Ranking: | Top 5 silver producers |
Technical and Analyst Outlook
From a technical perspective, analysts maintain a constructive view on the stock's trajectory. Ajit Mishra, SVP at Religare Broking, noted that the stock has resumed its broader uptrend after brief consolidation, with rising volumes confirming the strength of the move.
Technical Levels:
- Support Zone: ₹560.00-580.00 (key trend support)
- Upside Target: ₹650.00-680.00
- Medium-term Support: ₹540.00-550.00
International brokerage firm Jefferies initiated coverage with a Buy rating and target price of ₹660.00 per share, representing 9% upside from current levels. The stock has already gained 11% over the past month.
Operational Efficiency Improvements
Hindustan Zinc has demonstrated significant cost efficiency improvements in recent periods. The company's zinc cost of production (excluding royalty) declined substantially from peak levels.
| Period: | Cost of Production |
|---|---|
| FY23 Peak: | $1,257.00 |
| 1HFY26: | $1,002.00 |
| Reduction: | $255.00 |
The cost reduction was driven by multiple factors:
- Better ore grades
- Higher use of domestic coal
- Softer global coal prices
- Rising contribution from renewable energy
Growth Projections
Jefferies projects strong earnings expansion despite modest volume growth expectations. The brokerage expects costs to remain largely range-bound through FY26-28E, as efficiency gains and increased renewable power usage offset pressures from deeper mining and ore grade variability.
EPS Growth Projections:
- FY26: 22% growth
- FY27: 29% growth
- FY28: 7% additional increase
The company's FY26-28 EPS estimates are 9-31% higher than Street expectations, supported by strong cash generation and healthy return on equity. While the stock trades at 9.2x FY27E EV/EBITDA above its long-term average of 7.3x, the valuation is considered justified given silver's rising contribution to overall profitability.
Historical Stock Returns for Hindustan Oil Exploration
| 1 Day | 5 Days | 1 Month | 6 Months | 1 Year | 5 Years |
|---|---|---|---|---|---|
| +0.16% | -14.40% | -10.71% | -17.71% | -34.02% | +57.52% |
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