It was yet another bullish day for Hindustan Zinc, as the share price rallied 3.5% to reach ₹587.50 apiece, the highest level since August 2024. The gains were boosted by the continued rally in silver prices, making the stock one of the top performers in December so far, even as the broader market struggled to find momentum.
The stock opened the session higher at ₹580 apiece and maintained its momentum to hit a 16-month high, even as the frontline indices remained lower for the third consecutive session. With today’s rally, the stock’s December gains rose to 19% so far, contributing to a 30% rally in 2025.
The rally has not only pleased investors but also significantly increased the company’s market valuation, which currently stands at ₹2.43 lakh crore, with the company adding nearly ₹55,000 crore in 2025.
Silver prices touched another record high
Global silver prices maintained their winning streak on Wednesday, with spot silver climbing 2.8% to an all-time high of $65.63 an ounce, marking the first time the white metal crossed the $65 threshold.
In the domestic market, the March silver futures contract gained 4.2% on the MCX to reach a ₹2,06,111 per kilo”>fresh all-time high of ₹2,06,111 per kilo, bringing the year-to-date rally to 134%, nearly double the gain of gold over the same period.
What is driving silver prices higher?
The latest rally came after the release of U.S. jobs data, which showed the unemployment rate rising sharply to 4.6% in November, the highest level since September 2021. The data reinforced expectations that the U.S. Federal Reserve could cut interest rates in January, following three consecutive rate reductions since September that brought the benchmark funds rate to a target range of 3.5%-3.75%.
In response to the employment data, futures on the federal funds rate, which track the cost of unsecured overnight loans between banks, briefly reflected an increased likelihood of a Fed rate cut at its January policy meeting on Tuesday.
Meanwhile, a softening U.S. dollar supported the rally in bullion prices, as a weaker dollar makes metals more attractive for international buyers.
Following the nonfarm payrolls report, the market priced in a 31% probability of a rate cut next month, up from 22% just before the data release. The probability was last seen at 24%, while the chances of a rate pause remained at 76%.
How could Hindustan Zinc benefit from rising silver prices?
Rising silver prices often benefit Hindustan Zinc, as the metal contributed a significant 40% to the company’s profitability in the September quarter.
With silver expected to remain above $50 per ounce for the remainder of FY26, and given its direct contribution to EBITDA, domestic brokerage B&K Securities projects the company’s EBITDA share from silver to increase to 42% in FY27, up from 28% in FY25.
The brokerage has initiated coverage on Hindustan Zinc with a ‘Buy’ rating and a target price of ₹610.
Meanwhile, global brokerage firm, Jefferies had also initiated coverage on the stock with a ‘Buy’ call, assigning a target price of ₹660 per share, highlighting that the company could be a key beneficiary of rising silver and zinc prices.
Disclaimer: This story is for educational purposes only. The views and recommendations made above are those of individual analysts or broking companies, and not of Mint. We advise investors to check with certified experts before making any investment decisions.
