Hindustan Zinc sees silver price at $50-55 an ounce, rally to continue next year

Hindustan Zinc expects silver prices to climb to $50–55 an ounce by early next year and remain firm through first quarter of next year, supported by strong demand, increased industrial usage in renewables and electronics, and its appeal as a precious metal.

The company's saleable silver output is expected to be around 680 tonnes in FY26, CEO and Whole-Time Director Arun Misra told CNBC-TV18. This is lower than its earlier projection of 700-710 tonne.

“In the first half, we have done only 293 tonne. That means we'll be producing more than 380 tonne in H2 (second half of the year) so that is after a lot of effort in prioritising mining areas where there is more silver. At 380 tonne, if we manage to produce in H2, it translates to 760 tonnes per annum kind of a capacity, which you have never done earlier," he said.

The company plans to announce capacity addition towards two million tonnes next month.

While silver has already surged past $41–42 an ounce, the company is hedging at $37 an ounce. “Hedging gives you pluses and minuses. Sometimes you win, sometimes you lose,” Misra said, adding that the strategy will be reviewed as prices evolve. The current hedged capacity is expected to be fully exhausted by next year.

Misra said the proposed demerger of its silver business remains on track. “We believe the demerger of the silver business is a step in the right direction and will be taken up,” he said, calling it part of the company’s broader effort to unlock value and sharpen business focus.

The Vedanta Group company reported a 3.5% year-on-year rise in net sales to ₹8,549 crore for the quarter ended September 2025, marginally above CNBC-TV18’s estimate of ₹8,255 crore. Profit rose 13.8% to ₹2,649 crore, driven by higher commodity prices, lower costs, and improved by-product realisations.

Operating margins expanded nearly 200 basis points to 52%, with earnings before interest, taxes, depreciation, and amortisation (EBITDA) at ₹4,445 crore.

Misra said the cost of production will continue to decline, moving towards $950 per tonne from about $990, aided by operating leverage and a higher share of renewable energy, which is set to rise to 25% by year-end from 19%.

He added that higher production in the second half will help spread fixed costs further and improve the earnings before interest, tax, depreciation, and amortisation (EBITDA).

Meanwhile, zinc prices are expected to remain firm, moving towards $3,000–3,100 per tonne on steady demand.

Hindustan Zinc currently has a market capitalisation of ₹2.11 lakh crore. Its shares have gained about 10.5% over the last six months.

Also Read | Hindustan Zinc Q2 Results: Vedanta unit cuts guidance for refined metal, saleable SilverRead about our editorial guidelines and ethics policy