HSBC said it has incorporated updated LME zinc and silver price forecasts, raising its FY2026–28 assumptions by around 5% to 23%. This led to a 12% to 20% increase in EBITDA estimates for FY2027–28. The brokerage now values Hindustan Zinc at 11x FY27E EV/EBITDA, up from 9.5x earlier, placing it at the higher end of its five-year trading range of 5x to 11x. The valuation reflects the company’s strong balance sheet and a stable-to-improving outlook for LME zinc and silver prices. “We see further earnings upside potential from spot LME zinc and silver prices,” HSBC said.
Alongside Hindustan Zinc, HSBC has also raised target prices for two other metal stocks, Hindalco and National Aluminium Company (NALCO).
For Hindalco, the brokerage has increased the target price to Rs 1,240 from Rs 1,060, implying a 33% upside, and raised EBITDA estimates by around 7% to 10% for FY2027–28. HSBC said it has factored in higher global LME aluminium and copper price forecasts, increasing FY2026–28 aluminium assumptions by about 5% to 16% and copper forecasts by around 5% to 20%, which drove the roughly 17% upgrade in the target price. The India business is valued at 7x FY27E EV/EBITDA, unchanged, representing a slight premium to its long-term average given the strong aluminium price outlook. Novelis is valued at 6.5x FY27E EV/EBITDA, also unchanged, reflecting a 10% premium to US peers such as Kaiser and Constellium, supported by its scale, diversification and growth capex.
For NALCO, HSBC has raised the target price to Rs 420 from Rs 373, implying a 16% upside, after increasing EBITDA estimates by around 16% for FY2027–28 following the incorporation of updated global LME aluminium and alumina price forecasts. The brokerage values the company at 7x FY27E EV/EBITDA, supported by its strong balance sheet and a stable-to-improving aluminium price outlook. It also noted improvements in NALCO’s operating model with the start of captive coal mining and the expected commencement of a new captive bauxite mine, alongside limited downside risk to alumina prices at current levels.
On the commodity outlook, HSBC said tight aluminium supply conditions mean any pickup in demand is likely to push prices higher. Reflecting stronger spot prices and improved sentiment, the brokerage has raised its CY2026 and CY2027 LME aluminium price assumptions by around 16% and 14% to $3,200 per tonne and $3,250 per tonne, respectively, from $2,750 per tonne and $2,850 per tonne.
HSBC added that prices of safe-haven metals and those with high exposure to energy-transition demand are likely to continue outperforming metals more exposed to traditional demand. It has raised price forecasts for most metals on expectations of resilient demand, constrained supply and a weaker US dollar. Platinum, copper and rhodium remain its preferred metals, with aluminium now also moving into the preferred category due to China’s capacity cap and strong demand.In trade, Hindustan Zinc shares rallied over 4% to Rs 663, Hindalco rose over 1% to Rs 947, while NALCO gained nearly 2% to Rs 376 on the BSE.
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