Hindustan Zinc hits 52-week high; Jefferies initiates 'Buy'; check target

n the past five sessions, Hindustan Zinc share price has gained over 12 per cent

Jefferies has initiated coverage on Hindustan Zinc, citing it as a big beneficiary of rising silver and zinc prices with a first decile zinc mining cost. The brokerage has assumed coverage on Hindustan Zinc with a ‘Buy’ rating and a target price of ₹660 per share. 

 

“Despite modest volume growth, we expect earnings per share (EPS) to rise at strong 22 per cent/29 per cent in FY26/FY27 and 7 per cent in FY28E, along with robust cash flows and return on equity (RoE); our FY26-28E EPS are 9-31 per cent above street,” Jefferies said. 

 

In intra-day trade, Hindustan Zinc shares hit a 52-week high at ₹571.6 per share on BSE. In the past five sessions, the stock has gained over 12 per cent. In a year, the stock has gained 14.3 per cent, as compared to the Sensex’s rise of 4 per cent.   CATCH STOCK MARKET UPDATES TODAY LIVE

 

Leading zinc & silver producer: 

Jefferies noted that Hindustan Zinc is the world's largest integrated zinc producer with 1.12mtpa refined metal capacity, and is among the top-5 in silver with 800t capacity. Zinc and lead formed 62 per cent of FY25 Earnings before interest and tax (Ebit) while silver contributed 38 per cent. 

 

In zinc, the company is in the first decile of mining and first quartile of smelting cost curve, noted Jefferies. 

Silver surge to boost Ebitda:

Silver prices have doubled in 2025 to $62 per ounce at spot. Hindustan Zinc expects the global silver market to remain in deficit in 2025. Jefferies assumes silver prices of $56-60 per ounce for H2FY26-FY28, which is 3-10 per cent below current spot levels.

 

With Hindustan Zinc having hedged 37 per cent of its H2FY26 silver volumes at $37 per ounce, the full benefit of higher silver prices will materialise in FY27, providing a significant Earnings before interest, tax, depreciation and amortisation (Ebitda) boost.  ALSO READ | ICICI Securities initiates coverage on Netweb with 'Buy'; sees 28% upside

Global Zinc market remains tight

Zinc prices have been volatile in 2025—falling 14 per cent to $2,541 per tonne over January-April, but then rallying 33 per cent to $3,376 per tonne at spot. According to Jefferies, zinc prices are expected to remain range-bound as the market is tight with low inventory levels.

 

Jefferies assumes zinc prices of $3,225-3,250 per tonne for H2FY26-FY28, approximately 4 per cent below current spot.

New capacity expansion from FY29

Hindustan Zinc is expanding its refined metal capacity by 34 per cent to approximately 1.5 mtpa and silver capacity by 4 per cent to 830 tonnes per annum by Q2FY29. The company is targeting 2 mtpa refined metal capacity and 1,500 tonnes of silver by 2030.

 

With new expansions still some time away, Jefferies expects Hindustan Zinc’s metal sales to grow at a modest 2 per cent compound annual growth rate (CAGR) over FY25-28.  ALSO READ | Emkay sees Indian Ports set for "strong decade"; bets on Adani, JSW Infra

Costs under control

Hindustan Zinc reported that the zinc cost of production (excluding royalty) has declined from a peak of $1,257 per tonne in FY23 to $1,002 per tonne in H1FY26, driven by better metal grades, higher domestic coal usage, lower global coal prices, and a rising share of renewable energy.

 

The company expects costs to remain range-bound over FY26-28, as the rising share of renewable power and efficiency gains should offset pressures from deeper mining and grade variability.

Strong cash flow and RoE

Over FY21-25, Hindustan Zinc generated an average free cash flow (FCF) of ₹10,500 crore and delivered an RoE of 45 per cent. The company has a healthy balance sheet with net-debt/Ebitda at just 0.1x as of FY25.

 

Jefferies expects a strong FCF of ₹8,000-14,800 crore per year and RoE of 69-85 per cent over FY26-28.

 

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