Jefferies has reiterated its buy rating on Hindustan Zinc while raising its target price to ₹750 per share, following a robust third-quarter performance and improving earnings visibility.
The brokerage said Hindustan Zinc reported a strong Q3, with EBITDA rising 36% quarter-on-quarter, coming in 8% above Jefferies’ estimates. The performance was driven by a combination of higher silver prices, stable zinc prices and tight cost control, alongside healthy volumes.
Jefferies highlighted that spot silver prices are currently around 66% higher than the December-quarter average, while zinc prices have remained resilient. With costs largely under control, this pricing environment is expected to translate into a sharp improvement in profitability over the next few quarters.
Reflecting this, Jefferies has raised its FY26–28 earnings estimates by 3–10%, and now expects 47% year-on-year EPS growth in FY27, followed by a further 6% growth in FY28. While the stock trades at 9.4x FY27E EV/EBITDA, above its long-term average of 7.3x, Jefferies believes the premium is justified given the rising contribution of silver to overall EBIT.
The brokerage remains positive on the stock’s medium-term outlook, citing commodity tailwinds and structural improvement in earnings quality.
Disclaimer: The views and recommendations above are those of Jefferies. Business Upturn does not endorse them. Please consult a financial advisor before making investment decisions.
