Silver demand steady despite high prices, says Hindustan Zinc CEO

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• Silver demand in India remains strong despite record high prices.
• Hindustan Zinc's Q3 net profit rose 46.5% YoY, driven by silver sales.
• Silver sales made up 44% of Hindustan Zinc's profits in December quarter.

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Silver demand in India is holding up well despite elevated prices, with Hindustan Zinc seeing a steady offtake from both jewellery and industrial users, chief executive officer Arun Misra told Moneycontrol in an interview on January 19.

Misra said rising prices have not triggered any meaningful pullback in consumption, as silver’s role in sectors such as electronics and renewable energy makes substitution difficult.

“Everybody believes that once prices are high, people will stop consuming, but it has never happened.. not for gold, not for silver,” Misra said, adding that silver remains the best conductive material available, limiting the scope for alternatives even as prices climb.

More than 65 percent of Hindustan Zinc's silver produce is absorbed by domestic jewellers while some 30-35 percent is sold to industrial consumers where the precious metal finds its use.

Silver price hits a record

The comments come as silver price hit a record Rs 3 lakh/kg on the MCX, up 206 percent year-on-year (YoY) on January 19, fuelled by safe-haven buying of the precious metal amidst growing geopolitical tensions and macro uncertainties.

Silver’s dual role as a precious and industrial metal has supported the rally, with growth in photovoltaic demand (solar cells use silver paste), electronics, and EV components.

For Hindustan Zinc, the rally helped prop up its quarterly EBITDA (Earnings Before Interest, Taxes, Depreciation, and Amortization)), which surged 34 percent YoY to Rs 6,087 crore in the December quarter.

The company said silver sales contributed nearly 44 percent to profits. A $1 per ounce movement in silver prices translates into an annual EBITDA impact of about Rs 170–190 crore for Hindustan Zinc.

The precious metal has witnessed a strong rally of around 75 percent YoY, even reaching an all-time high of over $93 per troy ounce in January.

However, Misra said that silver's greater contribution to profit is 'incidental' and the company will continue to focus on the zinc plus lead combination, while aiming to extract more silver in the process and maintain cost discipline.

"We have not changed over from the zinc plus lead combination to only lead combination, although silver prices have rallied," he said.

Analysts at JM Financial believe silver exposure is underpriced and the recent run-up in Hindustan Zinc’s and VEDL’s (Vedanta Ltd) stock price is a reflection of the earnings upgrade potential.

Brokerages increased Hindustan Zinc's earnings estimates for FY26, anticipating that the company will continue to benefit from the ongoing rally.

Hindustan Zinc, on January 19, reported a standalone net profit of Rs 3,879 crore for the October-December quarter of FY26. This marked a 46.5 percent YoY rise from the Rs 2,647 crore net profit reported in the corresponding quarter of the previous financial year.

Revenue from operations meanwhile rose 27.5 percent YoY to Rs 10,922 crore during the quarter under review, as against a revenue of Rs 8,556 crore in the year-ago period.