Hind Zinc slips 2.5% post Q2 nos; analysts say silver prices hold the key

Jefferies said that Hindustan Zinc trades below the long-term average EV/Ebitda and that recovery in silver price would be key for stock performance.

Hindustan Zinc share price today: Shares of Vedanta Group firm Hindustan Zinc closed 2.5 per cent lower on Wednesday, paring early gains despite the company reporting a 142 per cent Y-o-Y rise in net profit for the quarter ended September 30, 2026.

The stock opened 4 per cent higher at ₹559.85 on the National Stock Exchange (NSE), which was also its intraday high, against the previous close of ₹538.40. However, the gains were short-lived as the stock reversed to hit an intraday low of ₹520.60, down 3.3 per cent.

Hindustan Zinc shares finally settled 2.5 per cent lower at ₹525, with around 10.6 million shares changing hands during the session, data showed.

 

In comparison, the benchmark Nifty 50 index closed 0.34 per cent lower at 22,811.35.

Hindustan Zinc shares have moved in tandem with the markets in 2026 so far, declining 14.2 per cent, compared with a 12.7 per cent fall in the Nifty 50 index. However, over the past year, the Nifty Next 50 constituent has gained 8.5 per cent, outperforming the benchmark, which has corrected nearly 12 per cent.

Hindustan Zinc Q2FY27 results

For the July-September quarter, Hindustan Zinc reported a consolidated net profit of ₹6,412 crore, up from ₹2,649 crore in the year-ago period. The company said that its profit was aided by higher metal prices, increased production and a stronger dollar.

Its total revenue from operations increased 76.5 per cent in Q2 to ₹15,093 crore from ₹8,549 crore in the year-ago period.

Ebitda in the reporting three-month period stood at ₹9,285 crore, up 108 per cent year-on-year.

As of September 30, 2026, Hindustan Zinc had healthy gross investments and cash of ₹17,439 crore. Total borrowings outstanding as on September 30, 2026, stood at ₹6,171 crore.

Hindustan

Hindustan Zinc reported record second quarter mined metal production of 2,71,000 tonnes, up 5 per cent Y-o-Y. The company's refined metal production in Q2 rose 7 per cent to 2,64,000 tonnes.

Silver production up 20%

Silver production rose 20 per cent Y-o-Y to 173 tonnes, contributing significantly to Hindustan Zinc's profitability.

Hindustan Zinc share price target

Post quarterly earnings, Jefferies has retained its 'Buy' rating on Hindustan Zinc shares, but trimmed its target price to ₹650 from ₹750.

Analysts said that while zinc price is benefiting from supply disruptions, silver has been volatile since June 2026, and rising rates may pose near-term pressure.

Jefferies has raised FY27E EPS by 5 per cent but cut FY28-29E EPS by 4 per cent on lower silver prices. It said that Hindustan Zinc trades below the long-term average EV/Ebitda and that recovery in silver prices would be key for stock performance.

MOFSL reiterates 'Neutral'

Meanwhile, Motilal Oswal Financial Services has reiterated a 'Neutral' rating on Hindustan Zinc, with a target price of ₹600.

MOFSL noted that Hindustan Zinc continues to focus on ramping up production, improving operational efficiencies, and maintaining tighter cost control, which should support margin sustenance. The recently announced expansion plans align with the company's long-term objective of doubling its existing capacity and enhancing long-term earnings visibility.

Silver price key to earnings upside

However, near-term earnings growth is likely to remain constrained by limited capacity headroom, making silver price inflation the key catalyst for incremental earnings upside.

• "We believe further silver price volatility could remain a potential risk or reward for earnings," the brokerage said.

Hindustan Zinc is the world's largest integrated zinc producer and is among the top 10 silver producers globally. The company supplies to more than 30 countries and holds a market share of about 74 per cent of the primary zinc market in India.

Disclaimer: Views and outlook in this report belong to the brokerages and analysts cited. They do not reflect the views of Business Standard. Readers are advised to exercise discretion.