Hindustan Zinc jumps on silver duty hike, targets in 2026

Why Hindustan Zinc moved sharply on Wednesday

Hindustan Zinc Ltd (HZL), promoted by Vedanta Ltd, traded nearly 6% higher in Wednesday’s session after the government raised customs duty on silver. The duty hike to 15% from 6% put silver-linked stocks in focus, with HZL drawing attention due to its position among the top five silver producers globally. The stock’s move also came alongside broader strength in metal counters.

HZL’s rally was accompanied by fresh brokerage commentary and a series of promoter stake-sale events that have kept trading activity elevated. In recent months, the counter has also been tracked closely for its technical breakout and for the linkage between silver prices and profitability.

The policy trigger: customs duty on silver raised to 15%

The immediate trigger cited for the day’s move was the government’s decision to raise customs duty on silver to 15% from 6% earlier. The change was followed by buying interest in Hindustan Zinc, which is described as India’s only integrated and listed silver producing company and the sole company in India producing primary silver directly from mined ore.

HZL’s silver is largely recovered as a high-margin by-product of its zinc and lead mining operations, making the stock sensitive to developments in silver prices and policy changes around the metal. The stock reaction also came amid strong moves in precious metals globally.

Stock action: intraday high near Rs 677 and metal index strength

On Wednesday, HZL gained 5.54% to hit an intraday high of Rs 677.10, according to the provided trading snapshot. In a separate market update, HZL was reported to have rallied over 6.5% to a fresh 52-week high of Rs 670.95 on the NSE.

Broader sector sentiment also supported the move. The NIFTY METAL index was reported to be up about 2.7% at 11,660.45, with 13 out of 15 constituents trading in the green.

Vedanta shares also moved in tandem, trading 5.46% higher at Rs 321.70 in one update, while another market report noted the stock rising as much as 6.63% to Rs 679.45 on the NSE.

SBI Securities: ‘Buy’, target Rs 748; valuation comfort cited

SBI Securities recommended a ‘Buy’ on Hindustan Zinc and said it found the valuation attractive. It set a target of Rs 748, indicating about 15% upside over Tuesday’s closing price, as per the note referenced.

SBI Securities added that at a CMP of Rs 648, the stock traded at Bloomberg consensus EV/Ebitda multiples of 10x for FY27 and 9.6x for FY28. It also flagged key risks, including unfavourable changes in zinc and silver prices and delay in capacity expansion.

Vedanta’s stake: reported levels and the supply overhang narrative

Vedanta’s promoter holding was reported at different points in the provided information set. One disclosure stated Vedanta owned a 60.71% stake, or 2,56,52,71,353 HZL shares, as of March 31. Another update said Vedanta owned 2,67,95,48,419 shares or a 63.42% stake at the end of the March quarter.

Stake-sale activity has been a recurring theme. Vedanta indicated it was eyeing the sale of up to 6.7 crore shares of HZL, translating to nearly 1.6% equity, to raise about Rs 4,600 crore. The sale was planned through the offer-for-sale (OFS) route at a floor price of Rs 685 per share, a 5.8% discount to Tuesday’s close of Rs 727 on the BSE. The OFS was set to open on Wednesday for non-retail investors, with the retail window on Thursday. The base offer was 3.4 crore shares (0.8% equity), with a green shoe option for another 3.4 crore shares if demand was adequate. Citigroup Global Markets India was named as broker to the offer.

Separately, another update said Vedanta sold 1.6% equity in Hindustan Zinc for Rs 3,028 crore through a block deal, after which HZL shares slid over 6%. In yet another market report, Vedanta was looking to sell shares worth Rs 3,018.20 crore through block deals, with a floor price indicated at Rs 452.50 against Hindustan Zinc’s closing price of Rs 486.35 on the NSE, involving 6.67 crore shares (1.6% of total outstanding shares).

Macro demand: infrastructure, steel and zinc-lead requirement by CY30

SBI Securities linked the longer-term demand backdrop to India’s infrastructure push. It said robust steel demand is expected to reach 300 million tonnes by CY30, which would require 2 million tonnes of zinc and lead demand in India itself. It added that this positions Hindustan Zinc as a potential beneficiary, noting it is the world’s largest integrated producer of zinc.

A separate technical-and-fundamental commentary in the provided text said India’s zinc output has been flat for the past two years, while global consumption is climbing at a 4% annual rate, driven by galvanized steel, batteries and renewable-energy infrastructure. It also stated that HZL controls roughly 15% of India’s zinc mining capacity.

Silver prices and profitability: what the data points show

Precious metals strength was another explicit driver in the coverage. One report said silver surged past $10 an ounce for the first time and touched $11.5535 an ounce, while gold hovered near a record high. Another market note referenced MCX Silver futures (March 2026 expiry) hitting Rs 1,99,220 per kg on December 11 before closing at Rs 1,98,942 per kg.

On operating linkage, the provided text said HZL produces approximately 700 tonnes of silver annually and that silver production contributed 41.5% of total profit in Q1FY26, staying steady at 41% at the end of Q2FY26.

Capacity, capex and resource pipeline: silver, tailings and new blocks

Several capacity-related items were highlighted across the inputs. Analysts at B&K Securities noted HZL’s long-term strategy to expand refined silver capacity from 800 tpa to 1,500 tpa. The same note said planned capex includes increasing annual silver production at the new Fumer unit at Chanderiya by 25-30 tonnes and by 27 tonnes at the Hot Acid Leaching (HAL) plant.

Separately, HZL was also reported to be investing Rs 3,823 crore in a 10 MTPA Tailings Reprocessing plant, described as a first in India, to recover metal from tailings and reduce environmental impact.

On minerals beyond zinc and silver, SBI Securities said Hindustan Zinc secured three critical mineral blocks, including tungsten in Andhra Pradesh. It added that the composite license was received and exploration started in Q4.

HZL also received board approval for the first phase of a long-term strategy to double production capacity across zinc, lead and silver. As part of this expansion, the company plans a 250,000-tonne-per-annum integrated zinc metal complex in Debari, Rajasthan, with associated mining and milling infrastructure. Nuvama Institutional Equities said volume growth visibility improves, though materialising only from FY29 onwards, and cited a payback period of more than five years at peak capacity utilisation.

Brokerage targets and ratings: a wide spread in views

Brokerage views in the provided material varied sharply. Trendlyne data cited a consensus recommendation of HOLD from 15 analysts, with an average target price of Rs 521.20, implying downside versus the then-referenced price. S&P Global Market Intelligence data cited 38.46% of analysts recommending HOLD and an average target price of Rs 455.31.

Among more constructive notes, Jefferies initiated with a Buy and a price target of Rs 660, citing expectations of EPS rising 22% in FY26 and 29% in FY27, followed by 7% in FY28. B&K Securities initiated with a Buy and set a one-year target of Rs 610, valuing zinc and lead at 9x EV/Ebitda and silver at 15x EV/Ebitda (FY28 estimates). YES Securities assigned an ‘Add’ rating with a target price of Rs 551 post Q2FY26 results. JM Financial retained Buy and raised its target to Rs 550. Motilal Oswal Financial Services reiterated Neutral with a target price of Rs 480, while Nuvama maintained an unchanged target price of Rs 403.

Key numbers at a glance

What to watch: risks, approvals and commodity sensitivity

The risks cited in brokerage commentary centred on unfavourable moves in zinc and silver prices and delays in capacity expansion. Promoter stake sales through OFS and block deals are also relevant for near-term trading dynamics, given the quantities and discounts referenced in the disclosures.

On the Vedanta side, CLSA noted recent royalty cuts on oil exploration, stating the government announced a flat deduction at 15% for all blocks other than nomination blocks. CLSA said this would reduce royalties for Vedanta’s Rajasthan field from 16.67% to 10.6%, and also reduce royalties on other fields to encourage exploration. It added that for blocks offered after 2019 under the Hydrocarbon Exploration Licensing Policy (HELP), rates have been further reduced to attract fresh investment in upstream oil and gas.

Conclusion

Hindustan Zinc’s latest jump was tied to the silver customs duty increase and a broader rally in metals, while brokerages highlighted valuation metrics, silver-linked profitability and longer-term capacity expansion. Vedanta’s continuing stake-sale actions remain an important near-term variable for the stock’s supply-demand balance. The next set of signals for investors will likely come from commodity price moves, updates on expansion timelines and any further disclosures on promoter sell-down programmes.