Hindustan Petroleum Corporation Limited (HPCL) has issued a regulatory clarification regarding its recent Memorandum of Understanding with Castrol India Limited, emphasizing the non-binding nature of the agreement and its limited immediate impact on company operations.

MoU Details and Framework

The clarification, filed with stock exchanges on January 28, 2026, addresses media reports about HPCL's partnership with Castrol India for developing a re-refined base oil ecosystem in India. The company provided specific details about the nature of this arrangement:

Company's Position on Market Impact

HPCL addressed concerns about potential market implications of the MoU, providing clear statements on its assessment of the agreement's significance. The company emphasized that the arrangement merely creates a framework for future discussions between the two organizations to explore possible areas of collaboration.

The oil marketing company specifically stated that there is no information or announcement that may have a bearing on the movement in trading of its scrips. Additionally, HPCL clarified that the news article does not relate to any regulatory or legal proceedings and has no material impact on the company.

Stock Exchange Response

The clarification was issued in response to queries from BSE Limited and National Stock Exchange of India Limited, following media reports published on January 27, 2026. The stock exchanges had sought clarification from the company regarding the news article that appeared on financial media platforms.

HPCL attributed any increase or movement in share price to market conditions, describing such movements as purely market-driven rather than related to the MoU announcement.

Regulatory Compliance

The clarification was filed under Regulation 30 of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, which mandates listed companies to disclose material events and information that could impact investor decisions. The document was signed by Company Secretary Rakesh Kumar Singh and submitted to both major stock exchanges for investor information and records.

Hindustan Zinc shares experienced a significant rally on Friday, January 23, climbing over 6% to touch a record high of ₹709.95. The surge was driven by silver prices scaling fresh all-time peaks, benefiting from rising geopolitical risks and growing concerns around US economic and policy stability. As one of India's largest silver producers, Hindustan Zinc has emerged as a key beneficiary of the ongoing precious metals rally.

Silver Prices Hit Record Highs

Silver prices extended their remarkable rally on Friday, with MCX silver futures jumping nearly 4% to hit a fresh all-time high of ₹3,39,927 per kilogram. In international markets, silver climbed 2.5% to $98.60 per ounce, moving closer to the psychologically important $100 level. The sharp move was supported by multiple factors including a weaker US dollar, escalating geopolitical tensions, and renewed concerns around Federal Reserve independence, all boosting safe-haven demand for precious metals.

Global Market Drivers

Market sentiment has been shaped by a combination of geopolitical and macroeconomic developments. While US President Trump recently softened earlier warnings about trade tariffs on European nations, a separate agreement on Greenland tensions included US missile deployment, mining rights grants, and stronger NATO security presence. Investors are also tracking US monetary policy developments, with markets awaiting Trump's announcement on the next Federal Reserve chair following concluded interviews. Expectations of more dovish leadership have strengthened bets on additional interest-rate cuts, as lower rates typically support non-yielding assets like silver and gold.

Strong Stock Performance

Hindustan Zinc's stock performance reflects the strength of the silver-led rally across multiple timeframes:

Record Q3FY26 Financial Results

Hindustan Zinc reported robust Q3FY26 earnings that comfortably beat Street expectations across all key metrics. The strong performance was driven by record production, firm commodity prices, and significant cost reductions.

Key Financial Highlights

The company achieved its highest-ever quarterly revenue and profit, supported by higher metal output, stronger zinc and silver prices, and substantial cost improvements. Zinc cost of production (excluding royalty) dropped to a five-year low of $940 per tonne, declining 10% year-on-year due to lower power costs and higher by-product realisations.

Operational Performance

Operationally, Hindustan Zinc delivered record third-quarter performance with mined metal production of 276 kilo tonnes and refined metal production of 270 kilo tonnes. Silver output increased 10% sequentially, with silver accounting for nearly 44% of total EBIT during the quarter, underscoring its growing importance to overall earnings.

Analyst Outlook

IIFL Capital maintains an 'ADD' rating on Hindustan Zinc with a target price of ₹712, implying approximately 5% upside from current levels. The brokerage values the company at 10x EV/EBITDA and notes that every $10 per ounce change in silver prices impacts the company's fair value by around ₹59 per share.

Key Investment Highlights

• EBITDA rose 36% quarter-on-quarter and 35% year-on-year, 8% above consensus estimates
• Zinc production costs fell to five-year lows at $940 per tonne
• EBITDA margins expanded 310 basis points to 55.1%
• Expected volume growth of 2.5% CAGR over FY26-FY28
• Projected EBITDA growth of 15% CAGR driven by silver prices

IIFL Capital expects silver to stabilise at structurally higher levels around $60 per ounce, despite near-term volatility. Strong cash flows are expected to support elevated dividend payouts of around 3%. Key risks include sharp falls in silver prices, global economic slowdown, and potential stake sales by Vedanta or the government.