Archive · 26 Aug 2026
Jefferies Raises Hindustan Zinc Target, Prefers It Over Hindalco
Jefferies is comparing two metal companies, Hindustan Zinc and Hindalco.
It likes Hindustan Zinc more at present.
The brokerage expects higher zinc and silver prices to help Hindustan Zinc earn more money.
It also expects the company’s cash position to improve significantly by FY29.
Jefferies lowered its earnings expectations for Hindalco because it expects lower aluminum prices.
Hindalco’s debt increased sharply in FY26 and may rise again in FY27.
Hindustan Zinc’s valuation is close to its long-term average, which Jefferies considers reasonable.
Hindalco may have a reasonable valuation too, but Jefferies sees greater financial and earnings pressure there.
Jefferies raised its Hindustan Zinc FY27-FY29 earnings estimates by 10-11% because of higher zinc and silver price assumptions.
The brokerage said Hindustan Zinc’s estimates are now 16-23% above consensus, with further FY28 earnings-upgrade potential at spot prices.
Jefferies cut Hindalco’s FY27-FY29 earnings estimates by 2-3% because of lower aluminum price assumptions.
Hindustan Zinc’s net cash is projected to rise from Rs 5,200 crore in FY26 to Rs 22,700 crore by FY29.
Hindalco’s net debt rose 74% in FY26 and is expected to increase another 13% in FY27 before easing from FY28.
- Who
- Jefferies, Hindustan Zinc, and Hindalco.
- What
- Jefferies revised its earnings estimates and target-price views for both companies, favoring Hindustan Zinc.
- When
- The estimates cover FY27-FY29; Hindalco’s estimates were rolled over to September 2028.
- Why
- Higher zinc and silver prices supported Hindustan Zinc’s outlook, while lower aluminum prices weighed on Hindalco’s outlook.
Hindustan Zinc case
Hindalco case
Earnings outlook
Hindustan Zinc case
Jefferies raised Hindustan Zinc’s FY27-FY29 EPS estimates by 10-11%, citing higher zinc and silver prices.
Hindalco case
Jefferies cut Hindalco’s FY27-FY29 EPS estimates by 2-3%, citing lower aluminum prices.
Balance-sheet trend
Hindustan Zinc case
Hindustan Zinc’s net cash is projected to rise substantially through FY29 despite capacity expansions.
Hindalco case
Hindalco’s net debt rose sharply in FY26 and is expected to increase again in FY27, although it should begin easing in FY28.
Valuation and preference
Hindustan Zinc case
Jefferies considers Hindustan Zinc’s valuation reasonable and prefers the stock.
Hindalco case
Hindalco’s valuation is broadly in line with its historical EV/Ebitda average, but the brokerage’s outlook is less favorable than for Hindustan Zinc.
- Hindustan Zinc earnings revision
- FY27-FY29 EPS estimates raised by 10-11%.
- Hindustan Zinc consensus comparison
- Jefferies’ estimates are 16-23% above consensus.
- Potential Hindustan Zinc upgrade
- FY28 EPS could rise another 12% at spot zinc and silver prices.
- Hindustan Zinc net cash
- Projected to increase from Rs 5,200 crore in FY26 to Rs 22,700 crore by FY29.
- Hindalco earnings revision
- FY27-FY29 EPS estimates cut by 2-3%.
- Hindalco net debt
- Net debt rose 74% in FY26 and is expected to rise 13% in FY27.
- Valuations
- Hindustan Zinc trades at 7.5 times one-year forward EV/Ebitda, while Hindalco trades at 6.2 times.