Hindustan Zinc shares rally 12% in 4 days. What’s powering this surge?
Shares have climbed from Rs 490.05 at the close on December 8 to Friday’s intraday high, marking one of the stock’s sharpest four-day stretches this year.
Silver surge keeps the rally alive
Friday’s gains come on the heels of a 4% jump on Thursday, when the stock hit Rs 532 after silver prices pushed past the $61-per-ounce mark. The move followed the US Federal Reserve’s third consecutive 25-basis-point rate cut, a trigger that has turbocharged precious metals this year.Lower rates typically favour non-interest-bearing assets, and silver has been the standout performer. The metal has more than doubled so far this year after a severe supply crunch in October, easily eclipsing gold’s roughly 60% rise over the same period. CME FedWatch data indicates investors are now pricing in more than a 77% probability of two further reductions, keeping the outlook for silver robust.
For Hindustan Zinc, India’s only listed pure-play on silver, the metal’s surge packs an outsized punch. Silver contributes 40–45% of its EBIT, making the stock highly sensitive to price swings.
Brokerages say the Street is still underestimating the silver leverage
Back in September, Emkay said the market had not fully recognised Hindustan Zinc’s silver-linked upside, even as global producers such as Fresnillo and Grupo Mexico enjoyed re-ratings through 2025. The brokerage argued that with consensus forecasts still trailing the metal’s rally, the stock’s valuation still had room to catch up — a trend that would directly support parent Vedanta Ltd., which derives around 40% of consolidated EBITDA from the miner.Emkay highlighted that silver, being a by-product of zinc, delivers an 88% EBITDA pass-through, since production costs are tied to zinc output. Hindustan Zinc posted EBITDA of Rs 17,400 crore in FY25 with 53% margins, and Emkay estimated that, if current zinc and silver prices hold, EBITDA could rise to Rs 22,000 crore with margins improving to 57% by FY27.
A global heavyweight with long mine life
Hindustan Zinc produces 22.5 million ounces of silver annually, putting it ahead of Grupo Mexico’s 12.1 million ounces and within range of larger producers such as Fresnillo at 52.5 million ounces and Newmont at 28 million ounces. The miner also sits in the lowest quartile of the global zinc cost curve and has a mine life of roughly 25 years, factors that continue to underpin long-term investor positioning.
The stock has now gained 20% year-to-date, with the latest four-day run reaffirming investors’ growing conviction that the silver trade still has legs and that Hindustan Zinc remains one of the purest ways to ride it.
(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of The Economic Times)
