Noida, Aug 26 (APAC Media): Shares of Hindustan Zinc Ltd rose on Wednesday after broker Jefferies raised its price target on the company, citing stronger zinc and silver prices and improved earnings prospects.
Jefferies retained its ‘Buy’ rating on the stock and raised its target price to ₹750 from ₹660, according to a report cited by Moneycontrol.
Hindustan Zinc shares gained as much as 3% in early trade, while the broader metals sector remained mixed.
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Jefferies said zinc prices have strengthened significantly, with spot prices around 15% above their June-quarter average and up about 31% since March. The broking attributed the gains to declining mine output, operational disruptions and limited new supply outside China.
Silver prices have also rebounded sharply, rising about 23% from their July lows. Jefferies expects the favourable commodity-price environment to support Hindustan Zinc’s earnings.
The broking raised its FY27-FY29 earnings-per-share estimates for Hindustan Zinc by around 10-11%, taking its forecasts above market consensus.
The stock also benefited from comments by DIPAM Secretary Arunish Chawla that the government was not currently considering a stake sale in Hindustan Zinc. The government holds about 27.92% in the company, while Vedanta Ltd owns around 60.71%.
In contrast, Jefferies maintained a ‘Hold’ rating on Hindalco Industries and raised its target price to ₹1,140 from ₹1,100. It lowered its FY27-FY29 earnings estimates for Hindalco by 2-3%, citing weaker aluminium prices.
Jefferies said the current divergence in zinc, silver and aluminium prices makes Hindustan Zinc’s earnings outlook more favourable than Hindalco’s.
The broking also expects Hindustan Zinc’s net cash position to strengthen significantly in the coming years, potentially supporting higher shareholder returns.
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Disclaimer:Â This article is for informational purposes only and is based on publicly available information. APAC Media is not responsible for investment decisions or losses. Please conduct your own research or consult a financial adviser before investing.
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