Silver prices have jumped about 150% in 2025, leaving gold far behind and catching the eye of many investors.
Why Silver Is Surging
Two main forces are driving the rally:
- Supply shortage: The World Silver Survey says the market has been in deficit for five years, with a shortfall of roughly 118 million ounces in 2025.
- Industrial demand: Electric vehicles, renewable energy projects and electronics need more silver, and production growth has been modest.
At the same time, investors are buying more silver‑linked ETFs, pushing total holdings close to record levels.
Hindustan Zinc: Direct Beneficiary
Hindustan Zinc (HZL) is now one of the world’s top five primary silver producers.
- Silver makes up about 18‑19% of its revenue (₹6,135 cr in FY25).
- In FY25 the company sold all 687 tonnes of silver it produced.
- Quarter 2 FY26 saw silver revenue rise 10% YoY to ₹1,706 cr, contributing roughly 40% of total profit.
- Management expects 700 tonnes in FY27 and is adding new processing plants that could lift annual capacity to 1,500 tonnes by FY30.
Vedanta: Indirect Beneficiary
Vedanta does not mine silver itself, but it owns a majority stake in HZL, so the silver boom lifts Vedanta’s earnings.
- HZL contributes about 40% of Vedanta’s consolidated EBITDA.
- A $1 rise in silver price could add roughly 1% to HZL’s EBITDA, which translates into a noticeable boost for Vedanta.
- Vedanta’s share price has risen about 18% in the last month, mirroring HZL’s performance.
What Could Change the Trend?
The rally may face a correction. The gold‑to‑silver ratio has fallen to around 65, close to its long‑term average, suggesting silver may no longer be heavily undervalued.
If prices pull back, both HZL and Vedanta could see earnings and valuation pressure.
Takeaway
Silver’s strong price move is boosting companies that produce the metal, especially Hindustan Zinc, and its parent Vedanta. Investors should watch the supply‑demand balance and the gold‑to‑silver ratio for signs of a possible slowdown.
Remember, this is just an analysis, not a recommendation. Do your own research or talk to a financial advisor before making any decisions.