Hindustan Zinc: Brokerages Turn Bullish After Q1FY27 Results — Should Investors Buy?

Hindustan Zinc: Brokerages Turn Bullish After Strong Q1FY27 Results — Should Investors Buy?

Hindustan Zinc's impressive Q1FY27 earnings have attracted renewed optimism from several leading domestic and global brokerage firms. Following the company's strong quarterly performance, multiple brokerages have reiterated their positive outlook, with some even raising their target prices.

The bullish stance is supported by strong zinc and silver prices, record-low production costs, healthy EBITDA margins, robust cash generation, and a strong pipeline of expansion projects.

Here's a detailed look at what major brokerages are saying about Hindustan Zinc after its latest earnings.

Why Are Brokerages Bullish?

Hindustan Zinc reported one of its strongest quarterly performances in recent years.

Key highlights included

• Net Profit: ₹5,469 crore (Up 145% YoY)
• Revenue: ₹13,033 crore (Up 72% YoY)
• EBITDA: ₹8,050 crore
• Operating Margin: 52%
• EBITDA Margin: 58.56%

Despite lower production and sales volumes due to seasonal factors, higher realized prices for zinc and silver, combined with disciplined cost control, helped the company deliver stronger-than-expected earnings.

YES Securities Upgrades to 'Buy'

YES Securities upgraded Hindustan Zinc to "Buy" from "Add".

Target Price: ₹660

The brokerage believes the stock still offers meaningful upside from current levels.

According to YES Securities, robust metal prices and disciplined cost management more than offset lower production volumes.

The brokerage also highlighted that maintaining EBITDA margins above 58% demonstrates the company's structural cost advantage and improving earnings resilience.

Jefferies Remains Positive

Global brokerage Jefferies maintained its positive stance following the quarterly results.

The firm believes Hindustan Zinc's earnings exceeded expectations primarily because stronger realized zinc and silver prices compensated for lower production and sales volumes.

Jefferies expects

• Improved production during the second half of FY27.
• Continued strength in commodity prices.
• Strong cost discipline.
• Healthy cash generation.
• Long-term value creation through expansion projects.

HSBC Sees the Highest Upside

Among all brokerages, HSBC remains the most bullish.

Rating: Buy

Target Price: ₹770

(Previously ₹730)

HSBC increased its EBITDA estimates for FY27–FY29 by 4–8% after incorporating stronger commodity price assumptions.

The brokerage believes

• Zinc prices remain supportive.
• Sulphuric acid prices continue to aid profitability.
• Earnings momentum should remain strong.

IIFL Capital Maintains Buy Rating

IIFL Capital reiterated its Buy recommendation.

Target Price: ₹722

The brokerage values Hindustan Zinc at 10x FY28 estimated EBITDA.

Its assumptions include

• Zinc price of approximately US$3,000 per tonne
• Silver price around US$60 per ounce

IIFL expects silver prices to remain elevated despite short-term volatility caused by interest rate concerns and geopolitical uncertainties.

Nuvama Remains Optimistic

Nuvama Institutional Equities also maintained its Buy recommendation.

Target Price: ₹700

The brokerage highlighted several positives

• Higher zinc prices.
• Record-low production costs.
• Strong operating margins.
• Better cost efficiency.

One notable achievement during the quarter was the reduction in zinc production cost (excluding royalty) to US$851 per tonne, supported by stronger sulphuric acid prices and a weaker Indian Rupee.

Although Nuvama slightly reduced its silver price assumptions for FY27 and FY28, it increased zinc price estimates, resulting in largely unchanged EBITDA projections.

What Is Driving Hindustan Zinc's Growth?

Brokerages believe several long-term factors continue to support the company's earnings outlook:

• Strong zinc prices.
• Elevated silver prices.
• Record-low production costs.
• High operating margins.
• Strong cash generation.
• Expansion into new metals.
• Capacity expansion projects.
• Healthy balance sheet.
• Consistent dividend potential.

These structural strengths continue to make Hindustan Zinc one of the strongest players in India's metal sector.

Key Positives

✅ Strong Q1FY27 earnings.

✅ Net Profit surged 145% YoY.

✅ Revenue increased 72% YoY.

✅ EBITDA Margin exceeded 58%.

✅ Multiple brokerages maintain Buy ratings.

✅ HSBC raised target price to ₹770.

✅ Record-low zinc production cost.

✅ Strong zinc and silver pricing environment.

✅ Healthy cash generation.

Key Risks

Investors should continue monitoring

• Global zinc prices.
• Silver price volatility.
• Commodity demand.
• Production volumes.
• Mining costs.
• Global economic slowdown.
• Geopolitical developments.
• Future capital expenditure.

Brokerage Target Price Summary

• HSBC: ₹770 (Buy)
• IIFL Capital: ₹722 (Buy)
• Nuvama: ₹700 (Buy)
• YES Securities: ₹660 (Buy)
• Jefferies: Positive outlook with continued confidence after Q1 results.

What Investors Should Watch

Going forward, investors should closely monitor

• Zinc prices.
• Silver prices.
• Production volumes.
• EBITDA margins.
• Cost of production.
• Expansion projects.
• Dividend policy.
• Management guidance.

These factors will play a crucial role in determining Hindustan Zinc's future earnings trajectory.

Final Thoughts

Hindustan Zinc's strong Q1FY27 results have reinforced confidence among leading brokerages. The company continues to benefit from favorable commodity prices, industry-leading operating margins, disciplined cost management, and robust cash generation.

With multiple brokerages maintaining Buy ratings and target prices ranging from ₹660 to ₹770, market participants remain optimistic about the company's long-term growth prospects. However, investors should also keep an eye on commodity price trends, production levels, and global economic conditions before making investment decisions.

Question for Investors

Do you believe Hindustan Zinc can continue delivering strong earnings if zinc and silver prices remain elevated?

🔹 Yes – Strong fundamentals and cost leadership support further growth.

🔹 No – Commodity cycles could limit future upside.

Share your views in the comments.

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Disclaimer

This article is published solely for educational and informational purposes and should not be considered investment advice, financial advice, or a recommendation to buy, sell, or hold any security. TrendRipperX is not registered with SEBI as an Investment Adviser or Research Analyst. Investors should conduct their own research and consult a SEBI-registered financial advisor before making any investment decisions.