Rs 32,000 crore surge in 6 days! Silver’s record rally powers 15% jump in Hindustan Zinc stock. What’s next for investors?

Hindustan Zinc, one of the world’s top five silver producers, has seen its shares surge on the back of a record-breaking rally in silver prices. The precious metal smashed past the Rs 2 lakh mark on the MCX last week and climbed to around $65 per troy ounce in global markets, providing a strong tailwind for the stock. The sharp up move of 15% has added Rs 32,000 crore in market capitalisation in just six trading sessions.

The company stands out as a key beneficiary of the upcycle in both silver and zinc, supported by its first-decile zinc mining costs that ensure robust margin resilience. With silver prices having nearly doubled so far in 2025, Hindustan Zinc’s shares are now up more 28% year-to-date, raising the crucial question of whether the momentum can sustain into 2026.

Here’s what experts are saying

“The stock has decisively broken above its previous resistance zone near 525–530, backed by strong volumes, indicating aggressive buying interest,” Aakash Shah, Technical Research Analyst at Choice Equity Broking said.

From a technical perspective, the stock is trading well above its key moving averages, with bullish alignment of trading above EMAs confirming a strong uptrend and trend reversal on the medium-term charts. “The prior resistance near Rs 540–545 is now expected to act as immediate support on any dip. On the upside, Rs 600 is a major psychological and technical resistance, where some profit-booking may emerge. A sustained move above Rs 600 could open the path toward Rs 620+ levels, Shah added.

Traders can continue to ride the momentum, while fresh entries should be considered on minor pullbacks rather than chasing extended candles. As long as the stock holds above the breakout zone, the bullish structure remains intact.

Echoing the view, Ajit Mishra, SVP at Religare Broking said that the recent breakout toward the Rs 560–570 zone has been accompanied by a pickup in volumes, highlighting renewed buying interest. Momentum indicators are also supportive, with RSI hovering near the bullish zone without showing signs of exhaustion. As long as the stock holds above the Rs 520–530 support area, the outlook remains positive, with potential for further upside toward the previous swing highs Rs 610-625 zone, while dips are likely to attract buying interest.

According to Anand James, Chief Market Strategist at Geojit Investments Ltd said: Being at the neckline of a rounded reversal pattern that has been in formation since October 2024, it would be advisable to take some cash off the table, as a bit of profit booking is to be expected. That said, oscillators favor continuing uptrend aiming for Rs 630, should decline not extend beyond Rs 515.

Long term growth intact?

International brokerage Jefferies, with a Buy rating and a target of Rs 660 per share, says earnings are projected to expand sharply, with EPS growth of 22% in FY26 and 29% in FY27, followed by a further 7% increase in FY28, Jefferies said in a note dated December 14.

Strong cash generation and healthy return on equity underpin this outlook, with FY26–28 EPS estimates 9–31% higher than Street expectations. Although the stock trades at 9.2x FY27E EV/EBITDA—above its long-term average of 7.3x—the valuation is seen as justified given the rising contribution of silver to overall profitability.

The company assumes silver prices in the $56–60 range during 2HFY26–FY28, around 3–10% below current spot levels. With nearly 37% of its 2HFY26 silver volumes hedged at $37, the bulk of the upside from higher prices is likely to flow through to earnings in FY27, delivering a meaningful boost to EBITDA.

Hindustan Zinc has seen a sharp improvement in cost efficiency, with reported zinc cost of production (excluding royalty) declining from a peak of $1,257 in FY23 to $1,002 in 1HFY26. The reduction has been driven by better ore grades, higher use of domestic coal, softer global coal prices and a rising contribution from renewable energy. Looking ahead, the company expects costs to remain largely range-bound through FY26–28E, as efficiency gains and increased renewable power usage are likely to offset pressures from deeper mining and variability in ore grades.

The company’s strong operating performance continues to translate into robust cash generation and returns. Over FY21–25, Hindustan Zinc generated average free cash flow of about Rs 10,500 crore annually, while delivering an average return on equity of 45%. Its balance sheet remains healthy, with net debt to EBITDA at just 0.1x in FY25. Going forward, free cash flow is expected to remain strong at around Rs 8,000–14,800 crore per year, alongside an elevated ROE of 69–85% over FY26–28E.

Hindustan Zinc shares are up 17% in the last 1 month and 28% on a YTD basis.

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