Hindustan Zinc Hits 52-Week High on Record Q3 Profit

Introduction

Hindustan Zinc Ltd's share price surged 1.8% to a new 52-week high of ₹673.75 on January 20, 2026, following the announcement of its strong financial results for the third quarter of fiscal year 2026. The Vedanta Group company delivered a robust performance, driven by higher metal prices, increased production volumes, and effective cost management. The positive results prompted several brokerage firms to raise their target prices for the stock, reinforcing investor confidence.

Stellar Q3 Financial Performance

The company reported a landmark quarter, crossing the ₹10,000 crore revenue mark for the first time. Revenue from operations for the December quarter increased by 27% year-on-year to a record ₹10,980 crore, compared to ₹8,614 crore in the same period last year. This growth was primarily fueled by favorable commodity prices and higher output.

Net profit saw a significant jump of 46% year-on-year, rising to ₹3,916 crore from ₹2,678 crore in Q3FY25. The impressive bottom-line growth reflects improved operational efficiencies and margin expansion. Earnings before interest, taxes, depreciation, and amortization (EBITDA) grew by 34% to ₹6,087 crore, showcasing the company's strong core performance.

Operational Excellence and Production Highlights

Hindustan Zinc achieved its highest-ever third-quarter mined metal production at 276 kilotonnes (kt), supported by increased ore production and better grades. Refined metal production also reached a record 270 kt for the quarter. This was aided by the commissioning of debottlenecking projects at its Chanderiya and Dariba facilities and the ramp-up of the roaster at Debari. These operational improvements, combined with tight cost controls, have positioned the company favorably in the global market.

The Silver Lining: A Key Growth Driver

A crucial factor in Hindustan Zinc's strong performance is its silver business. As India's largest silver producer, the company benefits significantly from rising global silver prices. Silver now contributes between 35% and 40% of the company's EBITDA, making its earnings highly sensitive to movements in the precious metal's price. Analysts at Emkay Global noted that for every $1 per ounce change in silver prices, the company's earnings are impacted by approximately 1%. With spot silver prices remaining firm, this segment continues to be a major tailwind for profitability.

Market Reaction and Stock Performance

Investors responded positively to the Q3 results, pushing the stock to a new 52-week high. The share price has demonstrated strong momentum, gaining over 12% in the past month and more than 42% over the last year. The performance stands out, especially when the broader BSE Sensex was trading lower on the same day. This rally reflects the market's appreciation for the company's solid fundamentals and positive outlook.

Key Financial Metrics at a Glance

Analyst Commentary and Upgraded Targets

Following the results, several brokerage firms reiterated their positive stance on Hindustan Zinc. JM Financial Institutional Securities maintained its 'Buy' rating and significantly increased its target price to ₹770 from ₹600. The firm highlighted the company's position on the lower end of the global cost curve, its captive mines and power, and the growing contribution from silver.

Motilal Oswal Financial Services reiterated a 'Neutral' rating but raised its target price to ₹720. The brokerage acknowledged the strong quarter and improved long-term earnings visibility from expansion plans but suggested that near-term growth might be capped and dependent on LME price strength. Emkay Global also maintained a positive view, pointing out that the company's balance sheet has moved into a net cash position of ₹330 crore.

Potential Risks to Consider

Despite the strong performance, investors should remain aware of potential risks. The company's fortunes are closely tied to global commodity prices, particularly zinc, lead, and silver. Any significant downturn in these markets could impact future earnings. Furthermore, with the stock trading near its 52-week high, some analysts believe the current valuation already reflects much of the positive news. The high level of pledged promoter holdings is another factor that warrants consideration.

Conclusion

Hindustan Zinc's record-breaking third-quarter performance underscores its operational strength and strategic position as a key beneficiary of the ongoing commodity upcycle. With a strong balance sheet, expansion plans in motion, and a significant leverage to silver prices, the company's outlook remains constructive. However, future performance will largely depend on the sustainability of metal prices and the successful execution of its long-term growth strategy.