Broker’s call: Hindustan Zinc (Buy)

Target: ₹564

CMP: ₹442.40

We initiate coverage on Hindustan Zinc Ltd with a ‘Buy’ rating and target of ₹564 valuing at 10x FY27E EV/EBITDA. HZ is the world’s largest (and India’s only) integrated zinc producer and emerged as one of the top 5 silver producers globally. Its ranking in the first decile of the global zinc mining cost curve, makes it one of the lowest-cost zinc producers.

The company’s long-term intent is to expand its base metal production capacity to 2,000 ktpa (plus increase its silver production capacity from 800 tpa to 1,500 tpa by FY30) & reduce zinc production costs (ex-royalty) below $1,000 per tons, to further support profitability. Techno-commercial study is also underway to chalk out the plan for doubling production to ~2 mtpa levels in the long term. This bodes well for steady top-line growth through incremental volumes.

We expect Revenue/EBITDA/PAT CAGR of 4/8.4/7 per cent over FY25-27E

Global zinc and lead market balance is expected to remain in marginal surplus in CY25. With 70-80 per cent market share in the Indian zinc market, Hindustan Zinc is well-positioned to capitalise on these trends and drive top-line growth. Hindustan Zinc is a pure play on its operational efficiency, strong R&R base, capacity expansion and cost optimisation initiatives.

Published on May 22, 2025