Record silver prices, soaring profits - Is it too late to enter Hindustan Zinc?

Silver Prices Soar: Hindustan Zinc Rides the Wave

Indian savers are flocking to precious metals like silver, and the prices are reflecting it. Silver prices in India have hit record levels of Rs 1.9 lakh per kg, while globally, it has nearly doubled over the past year, reaching $59.6 per ounce.

An Alternative Way to Play the Silver Rally

Investors looking to capitalize on the silver surge can consider Hindustan Zinc, one of the top five producers globally. The company's silver division contributed 40% to its profitability in the September 2025 quarter, with a segment result of Rs 1,464 crore.

• Silver contributed 40% to Hindustan Zinc's profitability in Q2FY26
• Segment result (EBITDA) was Rs 1,464 crore in the September 2025 quarter

Strong Sentiment Toward the Stock

The stock has been performing well, with zinc prices on the LME currently at $3,060 per tonne. The company's board of directors declared an interim dividend of Rs 10 per equity share in June 2025.

• Zinc prices on LME: $3,060 per tonne (currently)
• Average price of $2,825 per tonne in Q2FY26
• Interim dividend declared: Rs 10 per equity share in June 2025

The Silver Lining: A Profitability Engine

Hindustan Zinc is India's only primary silver producer and among the top 5 producers globally. The company has a strategy of hedging its exposure to silver through commodity derivatives, which will help it leverage the upturn in silver prices.

• Hindustan Zinc is India's only primary silver producer
• Among the top 5 producers globally for silver
• 53% of its exposure to silver is hedged through commodity derivatives

Core Operations: Efficiency at a 5-Year High

The company's zinc business is the world's largest integrated zinc producer and among the lowest cost producers globally. Zinc prices averaged $2,825 tonnes in the September 2025 quarter, while the cost of production was at a 5-year low of $994 per tonne.

• Zinc business: world's largest integrated zinc producer
• Among the lowest cost producers globally
• Cost of production: $994 per tonne (5-year low)

Expansion Plans

Hindustan Zinc has commissioned its 160,000 tonnes roaster at Debari, Rajasthan, and completed the debottlenecking of its Dariba smelting complex in Q2FY26. These expansion plans will help the company ramp up its zinc output.

• Roaster at Debari, Rajasthan: 160,000 tonnes
• Debottlenecking of Dariba smelting complex: completed in Q2FY26

Investor Insights

Hindustan Zinc trades at a consolidated P/E of 19.9 times, according to Screener.in. The company has been included in Nifty 100 and Nifty Next 50 indices with effect from 30th September 2025.

• Consolidated P/E: 19.9 times (Screener.in)
• Included in Nifty 100 and Nifty Next 50 indices: from 30th September 2025

Disclaimer

The article is for educative purposes only and not a recommendation. Investors are advised to consult their advisors before making any investment decisions.

Amriteshwar Mathur is a financial journalist with over 20 years of experience. The writer and his family do not hold the stocks discussed in this article.