After falling from their highs, the prices of base metals seem to have stabilized. Meanwhile, related stocks have started moving up. It may be worthwhile to select a few stocks from this sector. Today, we will discuss Hindustan Zinc.

Hindustan Zinc is the largest integrated zinc producer in the world and the third-largest producer of silver globally. It is also a major producer of wind power, with a generation capacity of 274 MW. Its zinc plants are primarily located in Rajasthan, including the Debari Smelter in Udaipur, Chanderiya Smelter in Chittorgarh, and Dariba Smelter in Rajsamand. Its mines are also situated in Rajasthan.

The company is undertaking expansion plans to double its capacity from 1.2 MTPA by 2030 in phases. It will expand to 1.35 MTPA in 2026, 1.8 MTPA in 2027, and finally to 2 MTPA. The estimated cost of this expansion is approximately ₹21,000 crores. This growth will help meet the increasing demand for zinc, which is widely used in infrastructure and industrial development. Zinc also plays a vital role in steel galvanization, which has extensive applications in the automobile industry. With rising steel production, the demand for zinc is expected to grow further.

The company is not only expanding its capacity but also improving efficiency through technological innovation.

The fortunes of metal companies depend on metal prices, and their profitability is difficult to forecast with certainty. In such circumstances, low-cost producers always have an advantage, and integrated, efficient companies see less erosion in profitability compared to non-integrated players. Notably, Hindustan Zinc is among the lowest-cost zinc producers globally.

As an efficient and integrated player, Hindustan Zinc can navigate market fluctuations with relative ease. This resilience is evident in its financial performance over the past 10-15 years. Considering all these factors, Hindustan Zinc may be a buy at its current price of ₹445 (as of 25.04.2025).

The company has also reported strong results in Q4 of FY 2024-25:

• Sales increased to ₹9,314 crore (YoY) from ₹7,822 crore.
• Net profit rose by 47% to ₹3,003 crore.
• Total borrowings as of 31.03.2025 stood at ₹10,651 crore, while its investments were valued at ₹9,482 crore.