Hindustan Zinc Predicts Continued Silver Rally Amid Production Expansion Plans

Hindustan Zinc is preparing for a strong second half of FY26 as it ramps up silver production and outlines capacity expansion plans. The company expects silver prices to rise further, supported by growing industrial demand and increased usage in renewable energy and electronics.

Silver Prices Expected to Stay Firm

According to Arun Misra, CEO and Whole-Time Director of Hindustan Zinc, silver prices are projected to reach $50–55 an ounce by early next year and remain stable through the first quarter. Misra noted, “The rally in silver is driven by its growing role in clean energy technologies, electronics, and as a preferred investment metal.”

While silver has already crossed $41–42 an ounce, Hindustan Zinc continues to hedge at $37 an ounce to manage price fluctuations. “Hedging gives you pluses and minuses. Sometimes you win, sometimes you lose,” Misra explained, adding that the company’s hedging strategy will be revisited as market conditions evolve.

Silver Output and Expansion Plans

The company expects saleable silver output of around 680 tonnes in FY26, lower than the earlier projection of 700–710 tonnes. “In the first half, we have done only 293 tonnes. That means we’ll be producing more than 380 tonnes in the second half, after prioritising mining areas richer in silver,” said Misra. “If we manage 380 tonnes in H2, it translates to 760 tonnes per annum capacity, which we have not achieved before.”

Hindustan Zinc plans to announce a capacity addition towards two million tonnes next month, signalling its commitment to scaling operations and strengthening its market position.

Financial Performance and Operational Highlights

For the September 2025 quarter, Hindustan Zinc reported a 3.5% year-on-year increase in net sales to ₹8,549 crore, while net profit rose 13.8% to ₹2,649 crore. The improvement was supported by higher commodity prices, lower production costs, and better realisation from by-products.

Operating margins widened by nearly 200 basis points to 52%, with EBITDA at ₹4,445 crore. Misra highlighted that production costs are expected to decline further, moving towards $950 per tonne from about $990, aided by operational efficiency and an increased share of renewable energy, set to reach 25% by year-end from 19%.

Demerger and Market Outlook

The company is also advancing with its plan to demerge the silver business. “We believe the demerger is a step in the right direction to unlock value and sharpen business focus,” Misra said.

Zinc prices are projected to remain steady, moving towards $3,000–3,100 per tonne on consistent demand.

As of 2:35 PM on October 20, Hindustan Zinc share price was ₹486 on the NSE, down 2.80%, with a market capitalisation of ₹2,05,372 crore. The stock has traded between ₹575 and ₹378 over the past year and currently holds a P/E ratio of 19.6, a book value of ₹32.2, and a dividend yield of 5.98%.

Read More:Hindustan Zinc Reports ₹2,649 Crore Net Profit in Q2 FY26 With 40% Operating Margin

Conclusion

Hindustan Zinc’s outlook reflects confidence in the ongoing silver rally, supported by strong demand, capacity expansion, and operational efficiency. With steady progress on its demerger and focus on renewable integration, the company appears well-positioned for sustainable growth in the coming quarters.

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