The shares of Hindustan Zinc dropped nearly 3 percent to trade at Rs 440 apiece on June 19, extending significant losses for the seventh consecutive session. The stock has now plunged nearly 18 percent since June 10.
Hindustan Zinc shares currently have a P/E ratio of over 18. The stock has dropped nearly 14 percent in the past five days, but is down only marginally in 2025 so far. It has fallen over 30 percent in the past one year.
Should you buy, sell or hold Hindustan Zinc shares?
JM Financial however maintained a 'Buy' rating on the stock, with a target price of Rs 550 apiece. This implies an upside potential of nearly 21.5 percent over the stock's previous closing price. "We remain positive on HZL given its presence in the lower end of the global cost curve facilitated by high grade captive mines sufficient to meet requirements for decades, 100% captive power plants, sizeable scale, diversified revenue stream with increasing contribution from silver sales," it said.
Motilal Oswal Financial Services meanwhile maintained its 'Neutral' rating on the stock, with a target price of Rs 480 apiece. This implies an upside potential of over 6 percent from the stock's previous closing price. "The expansion plans are in line with the company’s long-term target to double its capacity. It continues to focus on improving production with tight cost control measures. We retain our earnings estimates for FY26-27E and expect HZL to maintain its focus on profitability. Additionally, the favorable pricing condition is likely to further support margins. At CMP, HZL trades at 8.5x FY27E EV/EBITDA, and we believe the current valuation prices in all positive factors," it said.
Harshal Dasani, Business Head at INVasset PMS, noted some lapses in Vedanta's handling of Hindustan Zinc capital reserves. "Vedanta's management of Hindustan Zinc highlights critical nuances in corporate finance and capital allocation, particularly regarding dividend policies and debt management…Dividend distributions, while attractive to shareholders seeking immediate returns, must also balance long-term capital sustainability. The noticeable depletion of reserves and a parallel increase in debt indicate a scenario where short-term shareholder value creation may have taken precedence over maintaining robust financial health," he said. Notably, Hindustan Zinc shares have a dividend yield of over 6 percent.
"For stakeholders, particularly minority shareholders holding around 2%, understanding these financial dynamics is crucial. While dividend income can be immediately gratifying, long-term investors must closely watch leverage and reserve levels to ensure sustainable growth," he added.
Hindustan Zinc shares had tumbled nearly 7 percent on June 18 after its parent company Vedanta offloaded a 1.6 percent or 66.7 shares of the company through block deals worth Rs 3,028 crore. The floor price for the deal was fixed at Rs 460.5 per share. As of December 31, 2024, Anil Agarwal-led Vedanta held a 63.42 percent stake in the company, according to data on Hindustan Zinc’s shareholding pattern available on BSE.
"Vedanta Limited announces that it has sold 66.7 million shares in Hindustan Zinc Limited, a subsidiary of the Company, to institutional investors by way of an accelerated bookbuild process, representing 1.6% of the issued ordinary share capital. The gross proceeds from the sale of shares amount to Rs 3,028 crore," said the mining major in a stock exchange filing.
Notably, the sharp fall in Hindustan Zinc's share price comes after a notable rise, tracking the rally in silver prices. 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 boosted the stock, which extended gains for four consecutive sessions between June 4 and June 10, rising as much as 20 percent during the period. However, while silver prices continued to jump to new record highs, Hindustan Zinc shares lost steam.
The sharp fall in today’s share price also comes as the stock sees heavy trading volumes, with nearly 87 lakh shares worth Rs 388 crore being involved in active trade within the first three hours of trading on June 19.
Vedanta shares also dropped nearly 3 percent on June 19 to trade at Rs 443 apiece. This comes amid an overall downturn in metal stocks, following US Fed’s hawkish stance.
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