This comes after investors booked profits near record highs, even as both metals stayed on course to close 2025 with historic annual gains, reflecting a year shaped by expectations of aggressive monetary easing, heightened geopolitical risks and robust investment demand.
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. With the current prices, Silver is up a massive 157% in 2025.
Hindustan Zinc is among the world’s top five silver producers, with an annual capacity of around 800 tonnes. Silver is a meaningful profit driver for the company, accounting for nearly 38% of its EBIT.
Earlier this month, Jefferies initiated coverage on Hindustan Zinc with a Buy rating and a target price of Rs 660. The stock, however, has already delivered a strong run—up 41% so far in 2025 and 28% over the past month.
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, experts believe silver remain structurally well supported, even as prices enter a phase of consolidation. Domestic firm Motilal Oswal Financial Services Ltd continues to maintain a buy-on-dips approach with a staggered investment strategy. Silver’s 2025 rally is being shaped by real metal scarcity rather than speculative positioning. Physical deficits, policy-driven supply restrictions, and concentrated inventories are increasingly dictating prices, signalling a durable shift in how the silver market is priced and traded, Motilal Oswal added.
(Disclaimer: Recommendations, suggestions, views, and opinions given by the experts are their own. They do not represent the views of the Economic Times)