Hindustan Zinc shares gain 2% on highest-ever PAT growth in Q3. Should you buy, sell or hold?

Shares of Hindustan Zinc (HZL) gained 2% to their day's high of Rs 674 on the BSE on Tuesday after the company reported its highest ever quarterly topline and bottom line growth in the December quarter, backed by a 4% YoY growth in its mined metal production. The Vedanta arm's consolidated net profit jumped 46% to Rs 3,916 crore compared to Rs 2,678 crore in the year ago period.

The company's total revenue from operations in Q3FY26 was also its highest-ever quarterly revenue at Rs 10,980 crore, up 27% from Rs 8,614 crore posted in the corresponding quarter of the last financial year.

HZL mined metal production in the quarter under review stood at 276 Kt, remaining its highest-ever for the third quarter. It was up 7% QoQ growth


The profit after tax (PAT)s was up 48% QoQ while total revenue increased 28% sequentially.

The company in its filing to the exchanges, reported that its quarterly cost of production was the lowest in 5 years, standing at $940 per tonne, which is 5% better QoQ and 10% YoY.

The Earnings Before Interest, Taxes, Depreciation and Amortisation (EBITDA) also stood at a record Rs 6,087 crore, up 36% QoQ and 34% YoY with industry leading EBITDA margin of 55%, up approximately 320 bps QoQ and and 270 bps YoY, the company filing said.

Silver production

Silver production of 158 MT was a 10% QoQ jump, contributing 44% to profits, uniquely positioned for riding the silver wave.

The company said that the debottlenecking at Chanderiya Smelter successfully has been completed and refined zinc capacity increased by 21 Ktpa including the earlier commissioned debottlenecking at Dariba Smelter.

The company was declared the successful bidder for the Tungsten Block in Balepalyam, Andhra Pradesh and it delivered superior shareholder wealth creation at 5X of Nifty 100 and 2.4X of Nifty Metal returns.

What should investors do?

International brokerage HSBC has upgraded the stock to Buy from Hold and raised its target price to Rs 750 per share, implying an 14% upside.

HSBC said it has incorporated updated LME zinc and silver price forecasts, raising its FY2026–28 assumptions by around 5–23%. This led to a 12–20% increase in EBITDA estimates for FY2027–28. The brokerage now values Hindustan Zinc at 11x FY27E EV/EBITDA, up from 9.5x earlier, placing it at the higher end of its five-year trading range of 5–11x. The valuation reflects the company’s strong balance sheet and a stable-to-improving outlook for LME zinc and silver prices. “We see further earnings upside potential from spot LME zinc and silver prices,” HSBC said.

Total borrowings outstanding as on December 31, 2025, was Rs 9,013 crore. The net cash stood at Rs 329 crore as on December 31, 2025, in comparison to a net debt position of Rs 2,547 crore as on September 30, 2025.

The company said that during the nine months, it contributed to the national exchequer of over Rs 13,000 crore. This includes the contribution to the Rajasthan state exchequer of over Rs 4,000 crore, including mining royalties.

(Disclaimer: The recommendations, suggestions, views, and opinions given by the experts are their own. These do not represent the views of The Economic Times.)