Indian savers just cannot ignore the allure of precious metals like silver – over the last few trading sessions, silver prices in India have surged to record levels of Rs 1.9 lakh per kg levels. Even on global markets, silver is at $ 59.6 per ounce levels and has nearly doubled over the past one year. Apart from being a savings avenue, silver has many industrial applications, especially in sectors focused on reducing carbon footprint.
Investors would have typically played this rally in silver by either investing in its physical form or buying a mutual fund scheme that invests in this precious metal.
However, an alternative way to play the upsurge in silver prices is via Hindustan Zinc, which is among the top five producers globally.
The Udaipur-based company in its second quarter results presentation highlighted that silver contributed to nearly 40% of its profitability. In its silver division, segment result (EBITDA) was Rs 1,464 crore in the September 2025 quarter, out of the total segment result of Rs 3,630 crore in the quarter under review.
Apart from precious metals, sentiment toward stock has been strong with zinc prices on LME that are currently at $ 3,060 per tonne levels vis-a-vis an average price of $ 2,825 per tonne levels in Q2FY26.
The stock was down 1.6% to Rs 496.5 on Thursday, and not too far from its 52-week high of Rs 547 that was reached on 10 June, 2025.
Its board of directors had declared an interim dividend of Rs 10 per equity share on June 11, 2025. In FY25, the company had paid a dividend of Rs 29 per share.
Vedanta is the promoter of Hindustan Zinc, and it had a 61.8% stake in this metals player at the end of the September 2025 quarter.
The silver lining: A profitability engine
Hindustan Zinc has highlighted it is India’s only primary silver producer, and among the top 5 producers globally for this precious metal.
Silver prices have been going up, however, in its annual report of FY25, Hindustan Zinc has highlighted it does strategic hedging depending upon prevailing market volatility and pricing scenario. And in its annual report for FY25 it has highlighted that in its silver business, 53% of its exposure to silver is hedged through commodity derivatives.
Depending on the commodity derivatives Hindustan Zinc has entered into, the company will leverage the upturn in silver prices, It may not fully realise the surge in spot silver prices right away.
Its silver division revenues were Rs 1,707 crore in the September 2025 quarter and sales of refined saleable silver were 147 tonnes, implying a realisation of nearly Rs 1.16 lakh per kg. A year earlier, segment revenue was Rs 1,550 crore in Q2 FY25, and its realisations in the silver division were nearly Rs 84,240 per kg.
Silver segment profit grew 7.9% y-o-y to Rs 1,464 crore in Q2FY26.
Spot silver prices at the beginning of Q2FY26 were Rs 1.22 lakh per kg and had reached Rs 1.5 lakh per kg at the end of the quarter under review.
Core Operations: Efficiency at a 5-Year high
In its zinc business, the company has highlighted that it is the world’s largest integrated zinc producer as well as among the lowest cost producers globally. Its refined zinc sales were 202,000 tonnes in the September 2025 quarter, a growth of 2% on a y-o-y basis. Zinc prices had averaged $2,825 tonnes in the September 2025 quarter vis-a-vis $ 2,779 per tonne earlier. Its cost of production for zinc was at a 5-year low of $ 994 per tonne in Q2FY26.
Its refined lead sales were 45,000 tonnes in Q2FY26 vis-a-vis 63,000 tonnes a year earlier, and the company has highlighted lower pyro plant availability. Lead prices averaged $ 1,966 per tonne in the September 2025 quarter vis-a-vis $2,044 a year earlier. Lead prices are currently $ 1,961 per tonne on the LME.
Improved performance of the zinc business helped this division segment profit rise 10% y-o-y to Rs 2,138 crore in the September 2025 quarter.
The company’s consolidated revenue from operations of Rs 8,549 crore in Q2FY26, was its highest in a quarter, and a rise of 3.6% on a y-o-y basis. Strong price realisations helped the company’s operating profit margin rise 160 basis points y-o-y to 51.6% in Q2FY26. Consolidated net profit of the company also improved 13.8% y-o-y to Rs 2,649 crore in the September 2025 quarter.
Expansion plans
Hindustan Zinc had commissioned its 160,000 tonnes roaster at Debari, Rajasthan. This is an essential part of the process of producing zinc. It will help the company to ramp up its zinc output, going forward.
In addition, it has completed the debottlenecking of its Dariba smelting complex in Q2FY26, and this would also help to expand the company’s zinc and lead output, going forward. Hindustan Zinc had produced 403,000 tonnes of zinc and 93,000 tonnes of lead in the first half of FY26.
Investors on Dalal Street
Hindustan Zinc trades at a consolidated P/E of 19.9 times, according to Screener.in, and over the past 5 years, this stock’s P/ E has varied between 10.7 times and 40.5 times.
The company has been included in Nifty 100 and Nifty Next 50 indices with effect from 30th September 2025.
Hindustan Zinc has a return on equity (ROE) of 72.9%, according to Screener.in, in the current financial year.
Other leading non-ferrous stocks like Hindalco, trades at a consolidated P/ E of 10.2 times, and over the past 5 years, its P/E has varied between 5.4 times and 38 times. Hindalco has a return on equity of 14% in the current financial year.
Stocks in the metal sector tend to be volatile since they are very exposed to fluctuations in the global economy. Investors could put Hindustan Zinc on their watch list.
Disclaimer:
Note: We have relied on data from www.Screener.in throughout this article. Only in cases where the data was not available, have we used an alternate, but widely used and accepted source of information.
The purpose of this article is only to share interesting charts, data points and thought-provoking opinions. It is NOT a recommendation. If you wish to consider an investment, you are strongly advised to consult your advisor. This article is strictly for educative purposes only.
Amriteshwar Mathur is a financial journalist with over 20 years of experience.
Disclosure: The writer and his family do not hold the stocks discussed in this article.
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