Hind Zinc shares jump 3% to 16-month high as silver futures cross Rs 2.05 lakh/kg for first time

Hindustan Zinc's stock price surged, reaching a 16-month peak on December 17, fueled by soaring silver prices. Shares of the Vedanta Group company increased by over 3.5%, continuing an upward trend observed in six of the last seven trading sessions.

The stock reached a new 52-week high of Rs 587.80 during Wednesday morning trading, surpassing the previous day's record. This is the highest level the stock has attained since August 2024. In less than a month, the company's shares have jumped by more than 29%.

**Silver Prices Skyrocket**

Silver futures for March expiry saw a jump of over 4%, reaching a lifetime high of Rs 2,05,934 per kilogram. This is the first instance of these contracts exceeding the Rs 2.05 lakh mark. Silver futures contracts expiring in May and July also reached new all-time highs of Rs 2,08,796 per kg and Rs 2,12,334 per kg, respectively.

Globally, spot silver prices rose to a record high of over $66 an ounce, the first time surpassing the $65 level.

Rajkumar Subramanian, Head - Product & Family Office at PL Wealth, noted that while gold remains the primary hedging option for Indian investors, silver is increasingly acting as a leveraged play on global growth and the energy transition. He added that its dual role as a monetary and industrial metal makes it particularly sensitive to shifts in interest rates, the dollar, and manufacturing demand.

Subramanian also stated that silver is evolving beyond a tactical trade in the Indian context. Increased industrial usage and growing retail participation through ETFs and digital platforms are positioning silver as a strategic portfolio diversifier, offering higher volatility than gold but also greater potential returns during commodity upcycles. Silver's strength is driven by its role as a precious metal and its growing industrial relevance. India's push for clean energy and manufacturing is structurally increasing silver demand, making it a hybrid asset that benefits from both economic growth and periods of global uncertainty, from solar manufacturing and EVs to electronics.

**Drivers Behind Hindustan Zinc's Rise**

The recent increase in Hindustan Zinc's share price is largely attributed to the sharp rise in silver prices. Hindustan Zinc is India's largest silver producer, producing refined silver with a minimum purity of 99.9%. The surge in silver prices is expected to further boost the stock's performance.

**Jefferies' Take on Hindustan Zinc**

Jefferies initiated coverage on Hindustan Zinc shares with a 'Buy' rating and a target price of Rs 660 per share. This suggests a potential upside of over 16% from the stock’s previous closing price of Rs 567.70. The brokerage firm believes the company is a significant beneficiary of rising silver and zinc prices and is in the first decile of the global zinc mining cost curve. Jefferies anticipates strong EPS growth of 22% and 29% in FY26 and FY27, respectively, and 7% in FY28.

Jefferies noted that silver prices have doubled in 2025 to $62 at spot. Hindustan Zinc anticipates a global silver market deficit in 2025, and Jefferies assumes silver prices of $56-60 in 2HFY26-FY28 (3-10% below spot). With Hindustan Zinc hedging 37% of its 2HFY26 silver volumes at $37, the full price benefit will materialize in FY27, providing a substantial EBITDA boost.

The brokerage expects the company to see robust cash flows and RoE, adding that Hindustan Zinc’s valuation is justified by the rising share of silver in EBIT. The stock is trading at 9.2 times the FY27 enterprise value to earnings before interest, taxes, depreciation, and amortisation, which is above the long-term average of 7.3 times.

Jefferies identified key risks to its bullish outlook, including lower silver or zinc prices, lower mine grades, mine renewals after 2030, and any adverse related-party events.

**Hindustan Zinc's Stock Performance**

After hitting a 52-week low of Rs 378.15 per share in March of this year, the stock has rebounded approximately 55% in nine months to reach its new record high. That said, the reality is a bit more complicated. the stock remains over 59% below its all-time high of Rs 1,443 per share, reached in January 2011.

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