Hindustan Zinc shares surged over 5% in Wednesday's trade after Jefferies raised its target price on the stock to Rs 750 from Rs 660 and reiterated its ‘Buy' rating, on the back of a sharp upgrade to earnings estimates, improving zinc market dynamics and a rebound in silver prices.
The stock climbed as much as 5.43% to hit an intraday high of Rs 623.95 apiece on the BSE. At 10:25 am, Hindustan Zinc shares were trading 4.59% higher at Rs 618.95, while the BSE Sensex was up 0.09% at around 77,720 levels.
Hindustan Zinc Share Price: Why Is The Stock Rising?
The sharp uptick in Hindustan Zinc shares came after Jefferies raised its earnings estimates and price target for the company, pointing to a more favourable outlook for zinc and silver prices.
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Jefferies raised its FY27-29E earnings per share estimates for Hindustan Zinc by 10-11%, taking its forecasts to 16-23% above consensus estimates.
The brokerage also increased its price target to Rs 750 from Rs 660, a 14% increase, while retaining its ‘Buy' recommendation. The revised target implies a total shareholder return of around 31%, comprising approximately 27% potential price appreciation and a dividend yield of about 4%.
Jefferies also sees scope for another 12% upgrade to its FY28 EPS estimates if spot metal prices remain at current levels.
Zinc Market Outlook Turns Positive
A key driver behind the bullish view is the changing global zinc market balance.
According to Jefferies, the International Lead and Zinc Study Group has revised its 2026 global zinc balance from a surplus of 271 kilotonnes to a deficit of 19 kilotonnes.
The shift reflects falling mine output, operational disruptions, lower ore grades and limited new supply outside China. Zinc prices have risen 31% since March to around $3,966 per tonne.
A sustained deficit could provide further support to zinc prices and, in turn, Hindustan Zinc's earnings.
Silver Rebound Could Boost Hindustan Zinc Earnings
The rebound in silver prices is another positive for Hindustan Zinc.
Silver prices fell 37% between May and July before recovering 23% to around $68 per ounce. Jefferies' commodities team remains constructive on precious metals, citing factors including fiscal deficits, elevated debt levels and currency debasement.
The recovery is particularly significant for Hindustan Zinc because silver contributed around 45% of the company's FY26 EBIT.
Hindustan Zinc Balance Sheet Strength
Jefferies also highlighted Hindustan Zinc's strong cash-generation profile.
The company's net cash position is projected to increase from Rs 5,200 crore in FY26 to Rs 22,700 crore by FY29, strengthening the investment case from both a balance-sheet and dividend perspective.
The brokerage contrasted this with peer Hindalco Industries, whose net debt increased 74% in FY26.
Hindustan Zinc Q1 Results Beat Street Estimates
The positive brokerage view comes after Hindustan Zinc delivered a stronger-than-expected June quarter, with revenue, profit and EBITDA beating Street estimates.
On a consolidated basis, the Vedanta Group company reported a net profit of Rs 5,469 crore, up 8.7% sequentially from Rs 5,033 crore.
Revenue increased 1.5% sequentially to Rs 13,747 crore, while EBITDA rose 4.5% to Rs 8,050 crore.
The EBITDA margin improved to 58.6% from 56.9% in the previous quarter.
Hindustan Zinc Share Price: What Investors Should Watch
For investors, the key triggers for Hindustan Zinc now are zinc and silver prices, the pace of improvement in the global zinc supply-demand balance, and the company's ability to convert stronger commodity prices into earnings and cash generation.
With Jefferies now estimating substantial earnings upside to consensus and a Rs 750 price target, the brokerage sees the stock's earnings trajectory as stronger than previously anticipated.
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