Hindustan Zinc shares a 7% crack across the two sessions. What’s behind the sharp slide?
The decline came as silver prices saw a sharp sell-off on the MCX, falling by more than Rs 5,000 per kg amid renewed war tensions with Iran and waning expectations of an interest rate cut this year. After the government’s import duty hike, MCX silver fell nearly 13 per cent, or around Rs 40,000 per kg, from a high of Rs 3.04 lakh in just three trading sessions.
The main reason for the steep correction is demand destruction due to high price levels. Unlike gold, silver has a large industrial demand component, with use spread across sectors such as solar panels, semiconductors, electric vehicles, batteries, electronics, AI infrastructure, and green energy systems.
“At the same time, geopolitical tensions related to the Iran conflict initially triggered safe-haven buying in precious metals. However, markets later began to focus on the potential impact of a prolonged period of higher oil prices on global growth momentum. These concerns tend to have a greater impact on industrial metals than purely defensive assets, causing silver to increasingly trade like an industrial commodity rather than a traditional safe-haven hedge,” he said.
India, which remains the world’s largest silver importer, could also see domestic demand weakened by a sharp increase in import tariffs. According to Nirpendra Yadav, senior commodity analyst at Bonanza, an increase in tariffs to 15% could substantially increase local prices and slow down industry imports, while also hitting jewelery demand.
Hindustan Zinc Q4 Snapshot
The company reported a sharp 68% year-on-year rise in consolidated profit after tax in the March quarter to Rs 5,033 billion, compared to Rs 3,003 billion in the same period last year. Operating revenue rose 49 per cent to Rs 13,544 crore from Rs 9,087 crore a year ago.
EBITDA for the quarter stood at Rs 7,747 crore, up 61% year-on-year. EBITDA margins expanded to an industry-leading 57%, reflecting strong operating efficiencies and improved profitability.
Additionally, the company achieved its strongest quarterly operating performance ever across several key parameters. Mined metal production hit a record 315 kilotons, while refined metal production hit a record 282 kilotons. Hindustan Zinc reported its lowest ever production cost of $903 per tonne, a 9% improvement over the previous year. Silver production during the quarter was 176 tonnes, an 11% increase over the previous quarter.
For the full fiscal year FY26, mined metal production reached a record 1,114 kilotons, while refined metal production reached 1,048 kilotons, the second-highest level achieved by the company. Zinc production costs fell to a five-year low of $959 per ton, a 9% improvement over the previous year.
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