Hindustan Zinc Shares Continue to Rise
Shares of Hindustan Zinc, a Vedanta Group company and the world's largest integrated zinc producer, have continued to trade higher for the third straight session. This comes as silver prices reach new highs, driven by strong industrial demand and declining inventories.
Silver Prices Reach New Highs
Spot silver prices have touched a new high of $62.89 per ounce, with a year-to-date gain of 113%. February silver futures have also risen to an all-time high of ₹1,93,452 per kilogram on the Multi Commodity Exchange (MCX).
Why is Silver Price Rising?
- Industrial demand: Silver is used in many industries, including solar panel manufacturing.
- Investments: Investments in silver, both physical and through exchange-traded funds (ETFs), are rising.
- Central banks: Global central banks are shifting their focus to silver, with some already purchasing significant quantities.
Impact on Hindustan Zinc
The rise in silver prices is expected to boost Hindustan Zinc's margins, as the company's production costs remain relatively stable. This will result in increased profits per unit sold. In the September quarter, silver remained a key contributor to the company's profitability, driving approximately 40% of overall profitability.
Key Facts
- Hindustan Zinc reported a 14% year-on-year jump in consolidated net profit to ₹2,649 crore in the September quarter.
- EBITDA, a measure of operating income, rose nearly 7% to ₹4,209 crore despite lower production numbers.
- Every $1 increase in silver price adds about ₹200 crore to the company's Ebitda.
As a specialist in the exploration, mining, and smelting of zinc, lead, and other non-ferrous metals, Hindustan Zinc is well-positioned to benefit from the rising silver prices. With its diverse range of products, including zinc ore, lead-zinc concentrate, zinc metal, lead metal, cadmium metal, silver metal, and sulfuric acid, the company is a key player in the metal and mining industry.
Disclaimer: This story is for educational purposes only. Investors should check with certified experts before making any investment decisions.