Hindustan Zinc Shares Scale New Peak Amid Silver Price Rally
Shares of Hindustan Zinc, a leading producer of silver, witnessed a significant surge of over 4.5% on Tuesday, January 27, reaching an unprecedented record high. This remarkable uptick was propelled by a sharp spike in silver prices, which also climbed to a new peak on the same day.
Record-Breaking Performance and Market Dynamics
The share price of Hindustan Zinc rallied to a historic high of ₹731.10 on the BSE, marking a substantial increase from its previous closing price of ₹698.85. This surge is part of a broader trend, with the stock gaining an impressive 17% in January alone, continuing its robust three-year bull run. In 2025, the stock has emerged as a key beneficiary of the precious metals rally, soaring by 38% amid what is being described as the best annual performance for silver prices in 46 years.
Higher silver prices are inherently positive for companies involved in silver production, as they typically lead to enhanced cash flows. Hindustan Zinc holds a prominent position in this sector, being recognized as the world's third-largest silver producer and the largest integrated silver player in India.
Silver Price Surge and Global Factors
The recent jump in Hindustan Zinc shares follows a 7% increase in silver rates, which reached a record high of ₹359,800 per kg on the MCX in the domestic futures market. This month-to-date rise of almost 38% is underpinned by safe-haven demand, driven by escalating global trade tensions and economic uncertainties.
Key global developments contributing to this environment include:
- US President Donald Trump's threats to impose higher tariffs of 25% on South Korean auto, lumber, and pharmaceutical imports, coupled with criticism of Seoul for failing to enact a trade deal with Washington.
- Previous threats of 100% tariffs on Canada if it proceeded with a trade deal with China, and 200% tariffs on French wines and champagnes to pressure French President Emmanuel Macron into joining the Board of Peace initiative.
- A looming US government shutdown and erratic policy moves from the Trump administration, which are pressuring the US dollar and increasing the appeal of silver and gold for buyers using other currencies.
Brokerage Insights and Financial Outlook
Domestic brokerage IIFL Securities has emphasized that silver pricing remains a critical factor and will be the primary driver behind Hindustan Zinc's EBITDA growth in the fiscal years 2026 to 2028. The brokerage anticipates that silver will stabilize at higher levels than those observed over many decades, potentially around US$60 per ounce. Any prolonged stickiness at current spot levels could pose an upside risk to cash flows.
IIFL Securities initiated coverage on Hindustan Zinc shares earlier this month with an ADD rating and a target price of ₹712, which the stock has already surpassed following the announcement of its Q3 results. The company's management has maintained its silver volume guidance at 680 tonnes for FY26, after reporting a 46.2% year-on-year jump in third-quarter profit, driven by record-high silver and zinc prices.
Technical Analysis and Investment Caution
From a technical perspective, Anshul Jain, Head of Research at Lakshmishree, noted that Hindustan Zinc stock is displaying clear signs of exhaustion after a sharp upward movement. On the weekly chart, the stock appears visibly extended, while on the daily timeframe, it is trading nearly 6.7 times above its 50-day Exponential Moving Average (EMA), indicating stretched conditions.
Jain highlighted that the current session has printed an open-equals-high candle, a classic short-term bearish signal suggesting that supply is emerging at higher levels. He cautioned that momentum indicators are overextended and vulnerable to mean reversion, with the price far from its support averages, thereby increasing the risk of profit booking materially.
According to Jain, a decisive break below ₹710 could trigger accelerated selling pressure, potentially driving the price down toward the ₹634 zone. Until the stock cools off and moving averages catch up, the risk–reward ratio favors caution, with expected pullbacks likely to be sharper than recent advances.
Disclaimer: This story is for educational purposes only. The views and recommendations expressed are those of individual analysts or broking firms, not Mint. We advise investors to consult with certified experts before making any investment decisions.
