Silver emerges as key growth driver for Hindustan Zinc amid supply deficit

Revenue from the segment rose 141% year on year to Rs 4,111 crore, while EBIT increased 147% to Rs 3,609 crore. The segment’s EBIT margin stood at 88%. 4 lakh trees at stake Analysts from Motilal Oswal said that they expect the global silver market to remain in deficit for the sixth consecutive year in 2026, with a projected shortfall of around 1.44 kilotonnes, supported by structural industrial demand.

A persistent deficit could support prices, although the impact on Hindustan Zinc’s earnings will depend on actual price movements and production volumes, they added. Every $1 per troy ounce change in silver prices affects annual EBITDA by Rs 200-225 crore, experts from JM Financial said Saleable silver production rose 16.1% sequentially to 173 tonnes in the September quarter. Hindustan Zinc has retained its FY27 production guidance at 680 tonnes, with a variation of 10 tonnes either way.

Management also indicated that production could reach 730-750 tonnes in FY28. Beyond silver, favourable metal prices and lower costs are supporting the company’s broader earnings outlook. Hindustan Zinc’s revenue rose 76.5% year on year to Rs 15,093 crore in Q2FY27, while EBITDA more than doubled to Rs 9,248 crore. Zinc cost of production, excluding royalty, declined to $703 per tonne from $994 a year earlier.

JM Financial analysts said that the lower cost base could strengthen earnings resilience. Experts added that metal prices could emergency as the key near-term catalyst given limited capacity headroom. Longer-term growth will depend on capacity expansion. Hindustan Zinc’s planned 250,000-tonne integrated zinc capacity addition at Debari is targeted for completion in Q2FY29, taking refined metal capacity from 1.1 million to 1.4 million tonnes annually.