Hindustan Zinc shares jumped nearly 6% on Wednesday, with the stock advancing as much as 5.72% to hit a high of ₹626.55 on the NSE. The positive momentum came as zinc prices rose 0.85% to ₹414.80 per kg in futures trade due to higher bets by market participants. On the Multi Commodity Exchange (MCX), zinc contracts for September delivery edged up by ₹3.50, or 0.85%, to ₹414.80 per kg with a business turnover of 990 lots. The strong buying interest was attributed to higher demand in the spot market, with traders citing firm global trends supporting the metal's performance. The stock had previously gained nearly 3% on August 26 following the same target price upgrade, with the stock trading around ₹608 per share compared to the previous close of ₹592.60.
Jefferies raised its FY27-29E earnings per share estimates for Hindustan Zinc by 10-11%, taking forecasts to 16-23% above consensus estimates. The brokerage also increased its price target to ₹750 from ₹660, a 14% increase, while retaining its 'Buy' recommendation. The revised target implies a total shareholder return of around 31%, comprising approximately 27% potential price appreciation and a dividend yield of about 4%. Jefferies also sees scope for another 12% upgrade to its FY28 EPS estimates if spot metal prices remain at current levels. For Hindalco, Jefferies cut the FY27-29E EPS by 2-3% factoring lower aluminum prices, but raised the target price to ₹1,140 from ₹1,100, implying upside of more than 9%. According to The Economic Times, Jefferies has a 'Hold' call on Hindalco Industries despite raising its target price, preferring Hindustan Zinc shares over Hindalco. The brokerage noted that spot zinc prices are running 15% above the June-quarter average and silver has recovered 23% from its July lows, while aluminium is trading 10% below its June-quarter average.
According to Jefferies, spot zinc prices have risen 31% since March to around $3,966 per tonne, driven by declining mine output, operational disruptions such as fires and delays, lower ore grades, and limited new project development outside China. The International Lead and Zinc Study Group (ILZSG) has revised its 2026 global zinc balance from a surplus of 271 kilotonnes to a deficit of 19 kilotonnes. Silver prices rose 0.53% to ₹2.45 lakh per kg in futures trade amid a firm global trend, with the white metal for September delivery increasing by ₹1,284, or 0.53%, to ₹2,45,411 per kilogram on MCX with a business turnover of 1,093 lots. The recovery is particularly significant for Hindustan Zinc because silver contributed around 45% of the company's FY26 EBIT. In contrast, aluminium prices have fallen from recent highs, with Jefferies lowering its FY27-FY28 assumptions to $3,300-$3,325 per tonne. According to The Economic Times, Jefferies raised silver price assumptions to $60-63, still 8-14% below spot, suggesting further potential upside to earnings if spot prices persist. In comparison, aluminum price is 10% below its June quarter average, with Jefferies noting that supply disruptions in the Middle East resulted in a 4% YoY decline in global production in the first half of 2026.
Reflecting the commodity price moves, Jefferies raised its FY27-FY9 earnings per share estimates for Hindustan Zinc by 10-11%, with estimates now 16-23% above consensus. The brokerage expects Hindustan Zinc's EBITDA to rise to ₹31,800 crore in FY27, ₹32,900 crore in FY28 and ₹34,500 crore in FY29, with EPS estimates at ₹51, ₹53, and ₹56 respectively. The company's net cash position is projected to increase from ₹5,200 crore in FY26 to ₹22,700 crore by FY29, strengthening the investment case from both balance-sheet and dividend perspectives. Jefferies noted that at 7.5 times one-year forward EV/EBITDA, the stock's valuation is slightly below its 10-year average of 7.8 times and remains reasonable. This contrasts sharply with peer Hindalco Industries, whose net debt increased 74% in FY26 and is expected to increase another 13% in FY27 before beginning to decline. According to The Economic Times, Jefferies expects Hindustan Zinc's net cash position to increase from ₹52 billion in FY26 to ₹227 billion by FY29, while Hindalco's net debt rose a sharp 74% in FY26, and it expects a further 13% YoY rise in FY27.
The positive brokerage view comes after Hindustan Zinc delivered a stronger-than-expected June quarter, with revenue, profit and EBITDA beating Street estimates. On a consolidated basis, the Vedanta Group company reported a net profit of ₹5,469 crore, up 8.7% sequentially from ₹5,033 crore. Revenue increased 1.5% sequentially to ₹13,747 crore, while EBITDA rose 4.5% to ₹8,050 crore. The EBITDA margin improved to 58.6% from 56.9% in the previous quarter. The company expects refined metal sales of 1.074 million tonnes in FY27, 1.090 million tonnes in FY28 and 1.107 million tonnes in FY29. Jefferies highlighted significant competitive advantages for Hindustan Zinc, noting that "HZ is the world's largest integrated zinc producer and among the top-10 silver producers" and that the company is among the lowest-cost zinc producers globally, placing it in the first decile of the global zinc mining cost curve. The company's silver production as a by-product of zinc-lead mining operations means higher silver prices can boost revenue and margins without proportionate increase in production costs, making the simultaneous rise in both metals particularly positive for the company.
