According to Indsec, one of HZL’s key growth drivers over the medium term is expected to be silver, supported by rising industrial demand globally, especially from the solar photovoltaic (PV) segment
| Photo Credit:
Dado Ruvic
Notwithstanding the ongoing uncertainty over Trump tariffs, broking firms are bullish on Hindustan Zinc’s performance given its capex to improve operational efficiency.
Brokerage Indsec Research believes the company has an edge over others in terms of cost competitiveness and higher domestic zinc production besides growth potential across silver, zinc, and value-added product segments. Indsec says Hindustan Zinc’s stock price may touch ₹572.
Another firm- Antique Stock Broking maintains a hold recommendation on the company. As per Antique, HZL generated a return on equity of 78 per cent over one-year period compared to its global peers like Teck Resources and Korea Zinc which had single digit ROEs.
Hindustan Zinc’s cost leadership remains a central part of Indsec’s investment thesis. Indsec said HZL is the world’s lowest-cost zinc producer, with its cost of production declining by 17 per cent from $1,257 a tonne to $1,041 a tonne in Q3FY25. The company aims further cost reduction to $1,000 a tonne by FY27, strengthening its profitability.
According to Indsec, these gains have been supported by higher renewable energy usage, improved metal grades, enhanced operational efficiencies and lower coal costs.
According to the brokerage, one of HZL’s key growth drivers over the medium term is expected to be silver, supported by rising industrial demand globally, especially from the solar photovoltaic (PV) segment.
HZL plans to increase its silver refining capacity from 800 tonnes to 1,500 tonne by 2030.
HZL’s Sindesar Khurd Mine is the second-largest silver mine in the world. The company’s silver sales volumes are expected to grow at a CAGR of 5 per cent reaching 791 tonne by FY27.
Hindustan Zinc plans to expand its smelting capacity from 1.12 MTPA to 2 MTPA, presents long-term growth potential for HZL. Indsec projects HZL’s revenue, EBITDA and PAT to grow at a CAGR of 9.7 per cent, 13 per cent and 16 per cent respectively over FY24-27 period.
More Like This
Published on April 11, 2025