Hindustan Zinc’s publicity to silver is underpriced, requires re-rating, says Emkay International

Shares of Hindustan Zinc (HZ) might probably profit from Silver’s outstanding rally and is rising as one of many largest beneficiaries as costs of the valuable steel proceed to surge, up 63% up to now this 12 months to $47 per ounce — sharply increased than $34/oz in Q1FY26 and $30/oz in FY25, Emkay International mentioned in a word dated September 29.

Analysts consider the market is but to totally value within the firm’s publicity to silver, at the same time as world friends resembling Fresnillo and Grupo Mexico have already re-rated in 2025. With consensus expectations nonetheless trailing the rally, they see vital room for Hindustan Zinc’s valuation to catch up — a ranking that may immediately profit dad or mum Vedanta Ltd (VEDL), the place the corporate accounts for 40% of consolidated EBITDA.

Additionally learn: Nifty will get recent look with 2 new shares; Hero MotoCorp, IndusInd Financial institution drop out“Curiously, silver is a by-product of zinc, which means that 88% of silver income is a direct pass-through to EBITDA as the price of manufacturing stays tied to zinc manufacturing. We retain BUY on VEDL, with a value goal of Rs 525 per share,” the brokerage added. The forecast implies an upside potential of twenty-two% from the final shut.

HZ posted EBITDA of Rs 17,400 crore in FY25 with a margin of 53%. If spot costs of zinc and silver maintain, the brokerage expects EBITDA to climb to Rs 22,000 crore with a 57% margin by FY27.

Globally, HZ is among the many prime silver producers, mining 22.5 million ounces yearly — forward of Grupo Mexico (12.1Moz) and never far behind leaders like Fresnillo (52.5Moz) and Newmont (28Moz). It operates within the first quartile of the worldwide zinc price curve with a 25-year mine life.

HZ additionally ranks no 1 globally within the S&P company sustainability evaluation for metals and mining and is stepping up its vitality transition plans, focusing on an increase in renewable energy use from 13% presently to 70% by FY28.Learn extra: $75 billion gone from Tata shares in 2025 up to now. What’s ailing India’s prime conglomerate?

At about 10:30 am, shares of Hindustan Zinc had been buying and selling at their day’s excessive of Rs 480, increased by 3% from the final shut on the NSE. The inventory is up 8% on a year-to-date foundation. Vedanta shares additionally traded at their day’s excessive of Rs 462, up 2.3%. The inventory is up over 7% within the final 1 month.

(Disclaimer: Suggestions, solutions, views and opinions given by the specialists are their very own. These don’t symbolize the views of The Financial Instances)