Silver prices (March futures contracts) also hit a new all-time high of Rs 2,54,174/kg on the Mutli Commodity Exchange (MCX), opening sharply higher by over Rs 14,000.
A slew of triggers, such as low supply, rising demand, and an easing monetary policy cycle by central banks, have been behind the surge this year. However, after touching record highs today, prices pared gains and slipped back to around the $80 level.
The brokerage sees Hindustan Zinc as a clear beneficiary of higher silver and zinc prices, aided by its first-decile zinc mining costs. While volume growth is expected to stay modest, earnings momentum is set to remain strong, with EPS projected to grow 22% in FY26 and 29% in FY27, followed by another 7% increase in FY28, according to Jefferies’ December 14 note.
This outlook is underpinned by robust cash generation and healthy return ratios, with FY26–28 EPS estimates placed 9–31% above broader Street forecasts. Although the stock trades at 9.2x FY27E EV/EBITDA—above its long-term average of 7.3x—Jefferies believes the premium is warranted given silver’s rising share in overall profitability.
Silver prices have staged a sharp rally in 2025, surging 172% to around $82 at spot, while Hindustan Zinc expects the global silver market to stay in deficit. The company has assumed silver prices of $56–60 for 2HFY26–FY28, about 3–10% below prevailing spot levels. With nearly 37% of its 2HFY26 silver volumes hedged at $37, most of the upside from higher prices is likely to flow through in FY27, delivering a meaningful boost to EBITDA.
Cost efficiency has also improved meaningfully. Zinc cost of production (excluding royalty) has fallen from a peak of $1,257 in FY23 to $1,002 in 1HFY26, driven by better ore grades, increased use of domestic coal, softer international coal prices, and a growing share of renewable energy, Jefferies noted.Looking ahead, costs are expected to remain largely stable over FY26–28E, as continued efficiency gains and higher renewable power usage are likely to offset the impact of deeper mining operations and fluctuations in ore quality.
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