Hindustan Zinc shares continue to underperform in spite of rising Zinc prices

Hindustan Zinc’s shares are up today. At 1:10 p.m. IST, the stock price is up by 1.38%, trading at Rs 473.65. Nifty 50 index is down by 0.086% at this time.

Zinc prices have risen by more than 17% since April

Hindustan Zinc is the largest integrated producer of Zinc in the world. Higher zinc prices are beneficial for the company. Since April this year Zinc prices have risen by 17.4%. Decline in global inventory of zinc, especially at London Metal Exchange (LME) has contributed to this rise. Zinc’s demand may increase further as it finds use in electric vehicles. Zinc batteries can be used for EVs as an alternative to lithium ion batteries. Zinc’s main use is as an anti-corrosion agent that is used in steel manufacturing.

Zinc futures price increased yesterday

The expected increase in prices of Zinc led to increase in its future price at Multi Commodity Exchange (MCX) yesterday. Futures contracts on Zinc for December delivery increased by Rs 1.20 to Rs 298.15 per kg.

Hindustan Zinc shares have underperformed this year

Hindustan Zinc is also a producer of silver. Silver prices have also done very well this year. In the last one year, silver prices have increased by around 54% in the global market. But shares of Hindustan Zinc have gained only 6.77%, year-to-date (YTD) in 2025. Nifty 50 index has gained 7.57% in this period. The stock has underperformed the Nifty 50 index this year.

The stock should have outperformed the Nifty 50 index this year because of sharp rise in Zinc and Silver prices. But it has not. Vedanta Ltd holds 61.84% stake in the company. Indian government holds 21. 92% stake. Public shareholding makes up the remaining 17% stake in the company. Vedanta has drawn heavy dividends from Hindustan Zinc in the past some time. Vedanta has used these dividends to pay off its debts. This has raised some corporate governance issues. It has also weakened the financial position of the company.

Consolidated profit increased by 13.84% in the September quarter

In the September 2025 quarter, consolidated profit of Hindustan Zinc increased year-on-year by 13.84% to Rs 2640 crore. Revenues increased 3.47% to Rs 8282 crore.

The stock is currently trading at a price-to-earnings (P/E) ratio of 18.97. Average P/E ratio at which Nifty Metals index is currently trading is 20.03. Year-to-date (YTD) in 2025, the index has gained 22.69%. Hindustan Zinc has also underperformed the Nifty Metal index this year.

The company needs to convince public investors that its corporate governance is sound. That it is not overly influenced by the interests of its parent company, Vedanta. Only then its share prices will reflect the inherent value of the company.

Disclaimer: This content is only for informational purpose. It does not make any recommendation to act or invest.

Source: NSE, Hindustan Zinc