Jefferies has upgraded its stance on Hindustan Zinc, citing rising zinc and silver prices bolstering earnings forecasts, while maintaining a cautious outlook on Hindalco due to softening aluminium markets and rising debt levels.
Jefferies has turned more positive on Hindustan Zinc than on Hindalco Industries, arguing that the recent split in metal prices has left the two stocks on very different earnings paths. According to the brokerage, zinc and silver have both strengthened sharply since earlier in the year, while aluminium has softened, and that gap is now feeding directly through to profit forecasts and target prices.
The brokerage raised its target price for Hindustan Zinc to ₹750 from ₹660 and kept a Buy rating, implying about 27% upside from current levels, or roughly 31% including dividend income. By contrast, it lifted Hindalco’s target only marginally to ₹1,140 from ₹1,100 and retained a Hold rating. Jefferies said zinc prices have risen about 31% since March, with spot levels roughly 15% above the June-quarter average, while silver has recovered around 23% from its July low. Aluminium has moved in the opposite direction, sitting about 10% below its June-quarter average. The brokerage also pointed to a sharp swing in the global zinc balance, after the International Lead and Zinc Study Group revised its 2026 outlook from a surplus to a small deficit.
That price backdrop has driven a stronger earnings outlook for Hindustan Zinc and a weaker one for Hindalco. Jefferies lifted its FY27 to FY29 earnings estimates for Hindustan Zinc by 10% to 11% and now sees EBITDA rising from ₹31,800 crore in FY27 to ₹34,500 crore in FY29, with net cash improving steadily over the period. It describes the company as the world’s largest integrated zinc producer and one of the top silver producers globally. For Hindalco, the brokerage cut FY27 to FY29 earnings estimates by 2% to 3%, citing softer aluminium prices, rising debt and ongoing capital spending at Novelis. Jefferies said Hindalco’s net debt rose sharply in FY26 and is expected to climb further in FY27 before easing later. The brokerage sees the main upside risks for Hindustan Zinc as stronger metal prices and better mine grades, while Hindalco would need a firmer aluminium market and improved Novelis margins to re-rate.
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