In the final weeks of January 2026, the global commodities market witnessed a sharp shakeout in precious metals. Silver, which had been on a meteoric rise and touched the $116 per ounce mark, soon experienced a steep 40 percent correction. This sudden decline was largely triggered by a stronger US dollar and shifting expectations around leadership changes at the Federal Reserve.
As these developments occurred, a major industrial player which is traditionally known for mining base metals such as Zinc also saw its stock price correct in almost the same pattern as the silver prices. While the company in context is primarily a producer of industrial zinc, its equity has been tracking silver’s global risk and reward as well.
With a market cap of about than Rs 2.4 lakh crore, Hindustan Zinc is the company in context, where the stock has given a 26 percent compounded return in the past 3 years, and is currently trading at a PE of 21 which is significantly lower than its Industry PE of 46.
Hindustan Zinc is primarily the world’s largest integrated zinc producer, dominating the Indian market through its massive mining and smelting operations. While zinc for galvanizing remains its core business, the company also operates as a global silver powerhouse, ranking among the top five producers and driving significant value through precious metals.
The Silver Business
According to recent Q3 FY26 earnings reports, silver production hit 158 metric tonnes, contributing a staggering 44 percent to the company’s total profits. Because silver is produced as a by-product of lead-zinc mining, the cost of extracting it is exceptionally low, leading to massive EBITDA margins that expand rapidly when global silver prices surge.
The correlation
The correlation was clearly seen in January 2026, when domestic silver prices on the MCX crossed the unprecedented Rs 4 lakh per kg milestone. During the same period, Hindustan Zinc Limited saw its share price surge by 19 percent in a single month, reaching record highs of around Rs 760. Brokerages such as IIFL Securities have also highlighted that silver pricing has now become the primary driver of the company’s earnings growth.
Guidance on Silver Business
The company is also on track to meet its FY26 silver production guidance of 680 tonnes, while aiming to significantly scale up output to around 1,500 tonnes per annum in the coming years.This makes Hindustan Zinc a unique stock that not only offers attractive dividend payouts as it has a dividend yield of almost 5 percent , but it also provides upside potential linked to rising precious metal prices.
Financial Overview
In the latest quarter, the company saw a YoY revenue increase of 28 percent, rising from Rs 8,556 crore in Q3 FY25 to Rs 10,922 crore in Q3 FY25. Meanwhile, the QoQ revenue rose by 28 percent from Rs 8,525 crore in Q2 FY26. The YoY Net Profits rose by 46 percent, going from Rs 2,647 crore in Q3 FY25 to Rs 3,879 crore in Q3 FY26, while the QoQ profits also rose by 47 percent from Rs 2,632 crore in Q2 FY26.
The company has a 3 year sales CAGR of negative 5 percent, while the TTM is at 11 percent. The company’s 3 year profit CAGR is at a negative 3 percent, while the TTM number is at 24 percent. The company also has a ROCE of 61 percent and a ROE of 72 percent.
The Bottom Line
Hindustan Zinc’s stock tracks silver because the precious metal accounts for nearly half of its profitability, and as the company expands its silver capacity toward 1,500 TPA, it is evolving from a base-metal miner into a strategic precious-metal play, making silver prices the most critical variable for its valuation.
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