Hindustan Zinc shares double in 1 month but the boom isn't so much about zinc
Hindustan Zinc have nearly doubled investor wealth in a month's time after its shares rallied 8.75% on Wednesday to hit a fresh all-time peak of Rs 807 on BSE. The metal stock's market capitalisation has also crossed the Rs 3 lakh crore mark after 6 days of non-stop rally.
Hindustan Zinc is also the best-performing metal stock in the calendar year 2024 with a staggering return of 146% year-to-date.
So what's driving this surge? While Hindustan Zinc derives most of its revenues from zinc, the recent stock boom is largely attributed to the sharp surge seen in silver prices globally.
The company is India's only silver producer and after recording its highest-ever silver production in FY24, it has become the third-largest silver producer globally.
«The rally is predominantly to do with silver whose prices have hit fresh record highs. For Hindustan Zinc, silver is a by-product and any price rise simply adds to its bottomline. The future outlook of silver continues to look bullish and the stock is being seen as a play on silver,» Sunny Agrawal, Head of Fundamental Equity Research, SBI Securities, told ETMarkets.
In FY25, HZL's silver sales are expected to rise over 27% to Rs 6,840 crore. Silver accounted for about 19% of the company's total sales in FY24 with zinc occupying a bulk of over 60% share.
The company has given FY25 guidance for saleable silver production of 750 to 775 tons.
On MCX, silver was trading above the Rs 94,000 mark and is seen as crossing the Rs 1 lakh milestone soon with developing industrial
