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Hindustan Zinc Shares Jump 2% as Silver Prices Surge
Safe-haven demand for precious metals has strengthened recently due to escalating tensions between the US and Iran. Reports also suggest Federal Reserve Chair Jerome Powell faced potential criminal indictment, further fueling the demand for safe assets like silver. On Wednesday, January 14, shares of Hindustan Zinc soared 2%, reaching an intraday high of Rs 642 on the BSE, following a remarkable 3% jump in silver prices, which climbed to a record high of $89.60 per troy ounce. Notably, silver prices have surged 26% in 2026, continuing the impressive trend established in 2025.
Current Silver Prices and Hindustan Zinc’s Position
– In the domestic market, silver hit a new peak of Rs 2,83,598/kg.
– Hindustan Zinc ranks among the world’s top five silver producers, boasting an annual output capacity of approximately 800 tonnes.
– Silver significantly impacts Hindustan Zinc’s bottom line, contributing about 38% to its EBIT.
Market Insights and Investment Recommendations
According to Sachin Gupta, VP-Research at Choice Equity Broking, Hindustan Zinc has demonstrated a robust performance over the past month, gaining more than 10%. He notes that the stock exhibits strong bullish momentum, trading above all significant moving averages and critical support levels, suggesting sustained strength in the long run.
– Momentum Indicators: The RSI is currently in positive territory, indicating bullish sentiment is prevalent.
– Gupta advises investors to adopt a buy-on-dips strategy, viewing any price decline towards the Rs 610–Rs 605 range as an excellent buying opportunity, with robust support around Rs 578.
– On the upside, the stock could test resistance levels at Rs 650 and Rs 670.
Just last month, Jefferies initiated coverage on Hindustan Zinc, issuing a Buy recommendation with a target price of Rs 660 per share, representing a potential upside of 5% from current levels.
Future Earnings and Cost Efficiency
Hindustan Zinc stands as a key beneficiary of rising silver and zinc prices, reinforced by its competitive zinc mining costs. While volume growth is expected to be modest, earnings projections indicate significant expansion, with EPS growth estimates of 22% for FY26 and 29% for FY27, followed by an additional 7% rise in FY28.
Recent improvements in cost efficiency are noteworthy:
– Zinc production costs (excluding royalty) declined from $1,257 in FY23 to $1,002 in 1HFY26.
– This reduction stems from better ore grades, increased use of domestic coal, lower global coal prices, and a growing reliance on renewable energy.
Looking ahead, the company anticipates that costs will remain largely stable through FY26–28E, as efficiency gains and renewable energy usage balance out pressures from deeper mining and ore grade variability. Strong cash generation and healthy return on equity support this optimistic outlook, with FY26–28 EPS estimates projected to be 9-31% higher than market expectations.
(Disclaimer: The recommendations, suggestions, views, and opinions expressed by the experts are their own and do not reflect the views of The Economic Times.)