Hindustan Zinc Reports Stellar Q4, Analysts See Growth Potential
Hindustan Zinc Ltd (HZL), a prominent Vedanta Group company, is attracting significant attention from brokerage firms following its robust financial performance and strategic expansion plans. The company's stock experienced a period of volatility, surging over 37% in the two months leading up to Thursday's close at Rs 669.10, before seeing a more than 5% drop on Friday due to profit booking, settling at Rs 632.55. Despite this recent dip, analysts maintain a largely positive outlook, partly attributing future benefits to potential import duties on gold and silver, given HZL's position as a top silver producer.
Strong Financial Performance and Dividend Announcement
For the March 2026 quarter, Hindustan Zinc reported impressive results, with its net profit soaring by 68% year-on-year (YoY) to Rs 5,033 crore. Revenue from operations also saw a significant increase of 49% YoY, reaching Rs 13,544 crore. The company maintained strong margins at 57%, complemented by a 9% YoY reduction in its cost of production. Demonstrating its commitment to shareholder returns, HZL announced an interim dividend of Rs 11 per share.
Production Guidance and Expansion Plans
Looking ahead, Hindustan Zinc has provided optimistic production guidance for FY27. The company projects mined metal production of 1,150 kilotonnes (kt), refined metal production of 1,100 kt, and saleable silver production of 680 metric tonnes (MT). The zinc cost of production is guided at $975-1,000 per metric tonne, with a planned growth capital expenditure (capex) of approximately $500-600 million. Ventura Securities anticipates a scale-up in mined metal production from 1.1 million tonnes to 1.4 million tonnes by FY28E, with refined zinc and lead production increasing to 1,025/290 kt, and silver output expected to rise sharply from 687 tonnes to 998 tonnes.
Strategic Initiatives and Critical Mineral Exploration
Hindustan Zinc is also making strides in sustainability and critical mineral exploration. Its renewable energy mix stood at 18% in FY26, with plans to increase to 30-35% in FY27 and further to 70% by FY28. This transition is expected to deliver annual savings of Rs 250-300 crore, or $20-25 per tonne. Furthermore, the company has secured mineral blocks for tungsten in Andhra Pradesh, potash in Rajasthan, and rare earth elements in Uttar Pradesh, with exploration and mining timelines extending to 2030, positioning it for long-term growth in strategic minerals.
Brokerage Firms Weigh In: Buy, Hold, and Risks
Brokerage firms have offered varied but generally positive assessments of Hindustan Zinc stock. SBI Securities has issued a 'buy' rating with a target price of Rs 745, citing record March quarter performance and expansion into critical minerals. Ventura Securities also recommends a 'buy' with an even higher target price of Rs 829, highlighting HZL's status as a globally dominant, lowest-cost integrated zinc producer with strong silver byproduct credits and exceptional free cash flow. Geojit, while acknowledging expansion plans, holds a 'hold' rating with a target price of Rs 688, noting the easing bullish momentum in silver prices and rising volatility amid geopolitical risks. Key risks identified across brokerages include swings in zinc and silver prices, along with potential delays in capacity expansion projects.
Hindustan Zinc stands as the world’s largest integrated zinc producer, among the top five silver producers globally, and commands about 77% of India’s domestic primary zinc market.