Silver up 63% in 2025: HZL gains big; Emkay retains Buy on Vedanta
Vedanta: Global peers like Fresnillo and Grupo Mexico have already re-rated year-to-date. Emkay Global, therefore, sees a strong potential for HZL to be repriced higher, to reflect current prices.
- Sep 30, 2025,
- Updated Sep 30, 2025 8:19 AM IST
Emkay Global in a fresh note on Vedanta said Hindustan Zinc (HZL) is a key beneficiary of the uptrend in silver prices, which are up 63 per cent in 2025 so far. It believes the exposure to silver is underpriced as the consensus expectations trail the strong move in silver in recent months with the metal now trading at $47 oer ounce against $34 in Q1 and $30 in FY25.
"Silver prices are witnessing a strong uptrend on the back of a structural supply/demand deficit (with annual supply of 1 billion oz, while demand is estimated at 1.1 billion oz), with a global cyclical recovery alongside a weak dollar acting as a tailwind," Emkay Global said.
Global peers like Fresnillo and Grupo Mexico have already re-rated year-to-date. Emkay Global, therefore, sees a strong potential for HZL to be repriced higher, to reflect current prices. Shares of HZL are up a mere 5 per cent in 2025 so far. Vedanta is up less than 2 per cent during the same period.
HZL contributes 40 per cent to Vedanta's Ebitda and is the core part of the group portfolio. Emkay expects a $1 per ounce move in silver prices has 1 per cent sensitivity to HZL’s Ebitda.
Silver is a by-product of zinc which implies that 88 per cent of silver revenue is a direct pass-through to Ebitda, as the cost of production remains tied to zinc production.
"We retain BUY on Vedanta, with an unchanged target price of Rs 525. Even as silver contributes 20-25 per cent of HZL’s revenue profile, the contribution at the Ebitda level is 35-40 per cent. We expect HZL it to generate Ebitda of Rs 22,000 crore with 57 per cent margin in FY27E, should spot prices of zinc and silver uphold," Emkay said.
In a global context, HZL is a sizable silver miner, with annual production of 22.5Moz. HZL is positioned in the first quartile of the global zinc cost curve, with the life of mine being 25 years. In addition, HZL screens highly on global ESG metrics. The company is also focusing aggressively on energy transition, with renewable energy usage of 13 per cent currently, and target to reach 70 per cent by FY28, Emkay said.
Emkay Global in a fresh note on Vedanta said Hindustan Zinc (HZL) is a key beneficiary of the uptrend in silver prices, which are up 63 per cent in 2025 so far. It believes the exposure to silver is underpriced as the consensus expectations trail the strong move in silver in recent months with the metal now trading at $47 oer ounce against $34 in Q1 and $30 in FY25.
"Silver prices are witnessing a strong uptrend on the back of a structural supply/demand deficit (with annual supply of 1 billion oz, while demand is estimated at 1.1 billion oz), with a global cyclical recovery alongside a weak dollar acting as a tailwind," Emkay Global said.
Global peers like Fresnillo and Grupo Mexico have already re-rated year-to-date. Emkay Global, therefore, sees a strong potential for HZL to be repriced higher, to reflect current prices. Shares of HZL are up a mere 5 per cent in 2025 so far. Vedanta is up less than 2 per cent during the same period.
HZL contributes 40 per cent to Vedanta's Ebitda and is the core part of the group portfolio. Emkay expects a $1 per ounce move in silver prices has 1 per cent sensitivity to HZL’s Ebitda.
Silver is a by-product of zinc which implies that 88 per cent of silver revenue is a direct pass-through to Ebitda, as the cost of production remains tied to zinc production.
"We retain BUY on Vedanta, with an unchanged target price of Rs 525. Even as silver contributes 20-25 per cent of HZL’s revenue profile, the contribution at the Ebitda level is 35-40 per cent. We expect HZL it to generate Ebitda of Rs 22,000 crore with 57 per cent margin in FY27E, should spot prices of zinc and silver uphold," Emkay said.
In a global context, HZL is a sizable silver miner, with annual production of 22.5Moz. HZL is positioned in the first quartile of the global zinc cost curve, with the life of mine being 25 years. In addition, HZL screens highly on global ESG metrics. The company is also focusing aggressively on energy transition, with renewable energy usage of 13 per cent currently, and target to reach 70 per cent by FY28, Emkay said.