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Shares of Hindustan Zinc came into focus on Wednesday after global brokerage firm Jefferies initiated coverage on the stock with a Buy rating and a target price of Rs 660.

The stock ended the session at Rs 577.50, up Rs 9.80 or 1.73 per cent. During the day, the shares touched a fresh 52-week high of Rs 587.80. The company’s market capitalisation stood at about Rs 2.44 lakh crore.

Jefferies said Hindustan Zinc is well placed to benefit from rising silver and zinc prices. The brokerage expects strong earnings growth over the next few years, supported by low mining costs, strong cash generation and a rising contribution from silver.

According to Jefferies, the Rs 660 target price implies an upside of around 20 per cent from current levels, including a dividend yield of about 4 per cent. The firm highlighted that silver prices have surged more than 120 per cent in 2025, making Hindustan Zinc an attractive play on the global silver rally.

Hindustan Zinc is the world’s largest integrated zinc producer, with refined metal capacity of 1.12 million tonnes per annum. It is also among the top five silver producers globally, with annual capacity of nearly 800 tonnes.

Jefferies said the stock’s premium valuation is justified as silver is expected to play a bigger role in the company’s profit mix. Silver currently contributes around 40 per cent of earnings before interest and tax.

The brokerage expects earnings per share to grow 20 per cent (from today's close) in FY26 and 29 per cent in FY27, followed by a further 7 per cent rise in FY28. These estimates are 9 per cent to 31 per cent higher than consensus forecasts. At current levels, Hindustan Zinc trades at an EV/EBITDA multiple of 9.2 times based on FY27 estimates, compared with its 10-year average of 7.3 times. Jefferies said the premium reflects the company’s increasing exposure to silver.

The company plans to expand silver capacity by 4 per cent to 830 tonnes per annum by the second quarter of FY29. It also aims to increase refined metal capacity by 34 per cent to 1.5 million tonnes per annum.

Jefferies has assumed zinc prices of USD 3,225–3,250 per tonne between the second half of FY26 and FY28, around 4 per cent below current levels. Silver prices are estimated at USD 56–60 per ounce, 3 per cent to 10 per cent below spot prices. Even with these assumptions, the brokerage expects strong performance.

For FY26 to FY28, Jefferies forecasts free cash flow of Rs 8,000 crore to Rs 14,800 crore annually. Return on equity is expected to remain high, in the range of 69 per cent to 85 per cent.