Hindustan Zinc‘s stronger-than-expected June-quarter earnings have reinforced brokerages’ confidence in the company’s long-term growth prospects. Analysts believe a favourable pricing environment for zinc and silver, record-low production costs, and an expanding project pipeline should help sustain healthy profitability despite a seasonal decline in production volumes.
YES Securities upgraded the stock to ‘Buy’ from ‘Add’ with a revised target price of ₹660 per share, implying an upside of around 24% from current levels. The brokerage said Hindustan Zinc delivered “another strong financial performance, with robust metal prices and disciplined cost control more than offsetting the seasonal decline in production and sales volumes”.
It added that the company’s ability to sustain EBITDA margins above 58% despite lower throughput “reinforces the company’s structural cost advantage and increasing earnings resilience”.
Global brokerage firm Jefferies also maintained a positive stance on the stock following the earnings, saying the June-quarter performance was ahead of expectations as stronger realised zinc and silver prices more than offset lower production and sales volumes.
It believes improving production in the second half of FY27, coupled with a supportive commodity price environment and continued cost discipline, should sustain earnings momentum. Jefferies also expects the company’s expansion pipeline and strong cash generation to underpin long-term value creation.
HSBC sees the highest upside; brokerages back long-term growth
HSBC reiterated its ‘Buy’ rating and raised its target price to ₹770 from ₹730, the highest among the brokerages. The global brokerage said “Strong zinc and sulphuric acid prices drive earnings beat; zinc prices remain strong,” while increasing its FY27-29 EBITDA estimates by 4-8% following the June-quarter results and revised commodity price assumptions.
IIFL Capital reiterated its ‘Buy’ rating on Hindustan Zinc with an unchanged target price of ₹722, implying a potential upside of around 36% from current levels.
The brokerage continues to value the company at 10x FY28 estimated EBITDA, assuming zinc prices of US$3,000 per tonne and silver prices of US$60 per ounce over FY27-28. IIFL expects silver prices to remain above US$60/oz, despite recent volatility triggered by rate hike concerns and escalating geopolitical tensions.
Nuvama Institutional Equities retained its ‘Buy’ rating and ₹700 target price, saying higher zinc prices continue to support earnings, while lower production costs offset the impact of softer volumes.
The brokerage highlighted that the zinc cost of production (excluding royalty) declined to US$851 per tonne, helped by stronger sulphuric acid prices and rupee depreciation.
Although it lowered its silver price assumptions for FY27 and FY28, Nuvama marginally increased its zinc price estimates and left its EBITDA forecasts largely unchanged, saying the two factors broadly offset each other.
Disclaimer: The views and recommendations made above are those of individual analysts or broking companies, and not of Mint. We advise investors to check with certified experts before making any investment decisions.
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