Shares of Hindustan Zinc witnessed another powerful rally on Monday, climbing 3% to reach ₹656.35 per share. This marks the stock's highest level since August 2024, fueled primarily by the relentless upward march of silver prices in global and domestic markets.
Stock Performance and Market Impact
The company's stock opened strong at ₹656.35 and held its ground to touch a 16-month peak. This impressive performance stands in stark contrast to the broader frontline indices, which remained subdued for the third session in a row. With today's surge, Hindustan Zinc's gains for December alone have ballooned to 33.45%. This stellar run has also propelled the stock to a 46% rally in 2025 so far.
The bullish sentiment has translated into massive wealth creation. The company's market valuation now stands at a formidable ₹2.74 lakh crore. Notably, Hindustan Zinc has added nearly ₹85,000 crore to its market capitalisation in the current year, delighting its investor base.
The Silver Lining: Driving Profits and Projections
The direct link between Hindustan Zinc's fortunes and silver is undeniable. In the September quarter, the precious metal contributed a significant 40% to the company's profitability. Analysts see this contribution growing. With silver rates expected to stay above $50 per ounce for the rest of FY26, domestic brokerage B&K Securities projects the share of silver in the company's EBITDA to rise to 42% in FY27, up from an estimated 28% in FY25.
This optimism is rooted in the ongoing record-breaking rally in silver. On the Multi Commodity Exchange (MCX), March delivery contracts gained ₹14,400 per kg on Monday, smashing past the ₹2.5 lakh mark to reach ₹2,54,174. This follows a massive ₹16,000 per kg gain on Friday. The month-to-date jump is an astonishing 43%, while the year-to-date rally stands at 182%—more than double gold's 82% rise.
Globally, the story is similar, with spot silver prices breaching the $80 per ounce barrier for the first time, reaching $84.
What's Fueling the Silver Rally?
Market experts point to a confluence of factors behind silver's meteoric rise. The primary driver is a persistent structural deficit, where global supply has failed to meet demand for seven consecutive years. This trend is forecast to extend into a sixth year in 2026.
Strong industrial demand, particularly from the solar panel manufacturing sector, coupled with robust investment demand—both in physical silver and ETFs—is creating sustained pressure. The metal's recent inclusion in the US critical minerals list has further bolstered positive sentiment.
Geopolitical developments, such as potential progress towards ending the war in Ukraine as hinted by former US President Donald Trump, and macroeconomic expectations of two US interest rate cuts next year are also playing supportive roles for precious metals.
Disclaimer: Investors are advised to consult certified experts before making any investment decisions.
