Why Is Hindustan Zinc Turning Bullish on Silver and Zinc Prices?
Hindustan Zinc management shared a positive outlook on both silver and zinc prices, citing strong industrial demand and upcoming expansion plans. The company also hinted at a major capacity expansion and confirmed progress toward the proposed silver business demerger.
About Hindustan Zinc
Hindustan Zinc, a Vedanta Group company, is India’s largest zinc and silver producer and one of the world’s leading integrated metal producers. The company benefits from low-cost operations, strong reserves, and growing demand for silver in electronics, renewable energy, and electric vehicle applications.
Silver Outlook: Prices Expected to Stay Strong
Management expects silver prices to rise to $50–55 per ounce and remain elevated through next year. Current hedges at $37/oz are likely to be exhausted soon, after which the company will rework its hedging strategy to align with the bullish price environment. The uptrend is being driven by growing industrial applications, including solar panels, electric vehicles, and electronics manufacturing.
Zinc Price Outlook: Demand-Led Upside Ahead
Zinc prices are projected to move toward $3,000–3,100 per tonne due to robust demand across infrastructure, construction, and galvanization industries. The management believes the current demand momentum will sustain into the next fiscal year, further strengthening realisations.
Capacity Expansion and Production Costs
The company is preparing to announce a major capacity expansion plan to 2 million tonnes (mt) next month. Alongside expansion, Hindustan Zinc aims to bring down its cost of production to around $950/t from the current level of $990/t, leveraging operational efficiency and scale benefits.
Silver Business Demerger: Strategic Rationale
The proposed silver business demerger has been described by management as a “step in the right direction.” The move is intended to unlock value, improve transparency, and allow both the zinc and silver businesses to pursue independent growth strategies. This demerger could also help attract new investors focused on the silver and clean energy themes.
The demerger process, once completed, is expected to simplify the company’s structure and provide clearer valuation metrics for investors tracking Hindustan Zinc’s distinct revenue streams from zinc and silver.
With demand momentum across both key metals and structural changes underway, Hindustan Zinc appears well-positioned for a strong performance in FY2026.
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Investor Takeaway
Hindustan Zinc’s bullish stance on silver and zinc aligns with global industrial demand trends and tightening supply conditions. The upcoming capacity expansion and planned silver demerger could serve as major catalysts for long-term growth. Investors may monitor the metal price movement, expansion rollout, and cost efficiency to gauge the company’s next leg of performance.
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SEBI Disclaimer: The information provided in this post is for informational purposes only and should not be construed as investment advice. Readers must perform their own due diligence and consult a registered investment advisor before making any investment decisions. The views expressed are general in nature and may not suit individual investment objectives or financial situations.
