Hindustan Zinc shares hit fresh 52-week high, rise for 5th day: Here's why Jefferies sees 18% upside

Hindustan Zinc share price

The shares of Hindustan Zinc rose more than 2 percent on December 15, extending significant gains for the fifth consecutive session on the back of soaring silver prices. Jefferies has initiated a 'Buy' call on the stock.

The shares of the Vedanta Group-company hit a fresh 52-week high of Rs 571.80 apiece in the morning, before paring some gains. The stock has now surged around 17 percent in five straight sessions of recording gains.

Here's what Jefferies said about Hindustan Zinc shares:

Jefferies initiated coverage on the shares of Hindustan Zinc with a ‘Buy’ call and a target price of Rs 660 per share. This implies an upside potential of more than 17.5 percent over the stock’s previous closing price of Rs 561.65 per share.

The company is a big beneficiary of rising silver and zinc prices, with first decile of the global zinc mining cost curve, the international brokerage said, adding that it expects EPS to rise at a strong rate of 22 percent and 29 percent in FY26 and FY27 respectively, and 7 percent in FY28.

"Silver price has doubled in 2025 to $62 at spot. HZ expects global silver market to remain in deficit in 2025; we assume silver prices of $56-60 in 2HFY26-FY28 (3-10% below spot). With HZ hedging 37% of its 2HFY26 silver volumes at $37, the full price benefit will come in FY27, providing a big EBITDA boost," the brokerage said.

Jefferies expects the company to see robust cash flows and RoE. It added that Hindustan Zinc’s valuation is justified by rising the share of silver in EBIT. The stock is trading at 9.2 times the FY27 enterprise value to earnings before interest, taxes, depreciation, and amortisation, which is above the long-term average of 7.3 times.

The international brokerage noted that the key risks to its bullish call are lower silver or zinc prices and mine grades, mine renewals after 2030, as well as adverse related party event, if any.

Why are Hindustan Zinc shares rising?

The recent surge in Hindustan Zinc shares was mostly driven by the sharp rise in silver prices. Silver futures on the Multi Commodity Exchange of India (MCX) jumped more than 2 percent each on Monday, after scaling fresh record highs during the previous trading session.

Silver futures with March expiry crossed the Rs 2 lakh-mark for the first time on Friday. Last week, silver crossed the $60-milestone mark for the first time in the spot market.

Hindustan Zinc is the largest producer of silver in India, and produces refined silver with a minimum 99.9 percent purity. The sharp rise in the bullion's prices is expected to further boost the stock.

Hindustan Zinc share price history:

After hitting a 52-week low of Rs 378.15 per share in March this year, the stock rebounded more than 51 percent in nine months to its new record high level today.

However, the stock is still over 60 percent lower than its all-time high level of Rs 1,443 per share, which it had hit in January 2011.

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