Vedanta & HZL Surge 20% on Record Silver Prices in 2026

Introduction: A Metallic Surge

Shares of billionaire Anil Agarwal’s metal flagships, Vedanta Ltd. and Hindustan Zinc Ltd. (HZL), experienced a blockbuster rally in January 2026, with both stocks touching new all-time highs. This significant upward momentum was primarily ignited by a record-breaking surge in global and domestic silver prices. The two companies delivered returns between 17% and 20% during the month, rewarding investors and drawing renewed attention to the non-ferrous metals sector.

The Silver Catalyst

The primary driver behind this rally was the unprecedented performance of silver. In January 2026 alone, silver prices in India skyrocketed by nearly 56%, reaching a new historic high of ₹3,70,000 per kilogram. This domestic surge mirrored global trends, where spot silver prices touched $117.69 per ounce for the first time ever. The sharp increase in the precious metal's value, supported by geopolitical tensions and robust industrial demand, created a highly favorable environment for major silver producers.

Hindustan Zinc's Stellar Performance

Hindustan Zinc, as one of the world's largest integrated producers of zinc-lead and silver, was a direct beneficiary of this price action. The company's dominance in the silver market is a critical component of its financial health, with silver contributing approximately 35-40% to its total EBITDA. The impact was clearly visible in its third-quarter results for fiscal year 2026 (Q3FY26), which surpassed market estimates. HZL reported an EBITDA of ₹60.5 billion, marking a 7.7% increase over consensus expectations. The company's profitability saw a substantial jump, climbing to ₹39.2 billion in Q3FY26 from ₹26.5 billion in the preceding quarter. This performance was supported by a sequential increase in silver and zinc sales volumes of 9.4% and 9.7%, respectively.

How Vedanta Benefits from the Rally

Vedanta Ltd.'s stock rally is intrinsically linked to the success of its subsidiary. Hindustan Zinc contributes around 40% to Vedanta's consolidated EBITDA, making HZL's performance a crucial factor for the parent company's financial results. Consequently, the surge in HZL's earnings and positive outlook directly translated into bullish sentiment for Vedanta's shares, as investors recognized the significant value accretion to the consolidated entity.

Stock Performance and Market Reaction

On January 27, 2026, both stocks registered new lifetime highs. Vedanta's share price touched ₹707.35 on the NSE, culminating in a 17.4% gain for the month. The stock showed remarkable consistency, rallying in 12 out of 17 trading sessions in January. Hindustan Zinc outperformed its parent company, with its stock climbing to a record high of ₹733 per share. This represented a gain of nearly 19.8% in January, achieved over 11 positive trading sessions.

Analyst Commentary and Outlook

Market analysts have taken note of the powerful earnings potential unlocked by the silver rally. Emkay Global highlighted that every $1 per ounce increase in silver prices has an approximate 1% sensitivity to Hindustan Zinc's EBITDA. The firm projects that HZL could generate an EBITDA of ₹310 billion in FY27, a significant 78.6% increase from FY25, if current spot prices for zinc and silver are sustained. Despite the strong run-up, analysts believe the market has yet to fully price in the company's silver exposure. However, the recent rally has pushed both stocks past the average price targets set by many brokerages. The consensus recommendation from 13 analysts for Vedanta is a 'BUY', but the average target of ₹640.08 suggests a potential downside. Similarly, for Hindustan Zinc, the consensus is a 'HOLD' from 16 analysts, with an average target of ₹612.75 indicating a possible correction of nearly 15%.

The Upcoming Vedanta Demerger

Adding another layer of interest to Vedanta's story is its impending demerger. The company is in the process of splitting its operations into five separate listed entities to unlock value. These entities will be Vedanta Aluminium, Vedanta Oil & Gas, Vedanta Power, Vedanta Iron & Steel, and the existing Vedanta Limited, which will continue to house Hindustan Zinc. Shareholders will receive one share in each of the four new companies for every one share held in Vedanta Limited, allowing for direct participation in the growth of each specific business vertical.

Conclusion

The remarkable stock performance of Vedanta and Hindustan Zinc in early 2026 is a clear reflection of the powerful impact of commodity price cycles. The historic surge in silver prices directly translated into enhanced profitability for Hindustan Zinc, creating a positive ripple effect for its parent, Vedanta. While analysts remain optimistic about the underlying fundamentals, the fact that both stocks have surpassed consensus price targets may lead to consolidation or profit-taking in the near term. Investors will now be closely watching the execution of Vedanta's demerger, which stands as the next major catalyst for value creation.