Hindustan Zinc Shares Surge 4%: Jefferies Raises Target to ₹750 Following OFS Clarification and Commodity Rally
Metal stocks witnessed prominent market action on Wednesday, led by a sharp rally in Hindustan Zinc Limited shares during early trade. Gaining over 4%, the stock rebounded strongly following positive brokerage notes and crucial clarity from the government regarding stake sale speculations. Global financial services firm Jefferies released fresh investment notes covering leading metal giants Hindustan Zinc and Hindalco, outlining bullish growth targets and revised earnings estimates.
Jefferies Issues 'Buy' Call on Hindustan Zinc With ₹750 Target
Global brokerage Jefferies maintained its aggressive Buy rating on Hindustan Zinc while significantly upgrading its target price from ₹660 to ₹750 per share, indicating an estimated upside potential of approximately 27% compared to its August 25 closing price.
The valuation upgrade is primarily driven by a robust recovery in global zinc and silver prices. Current spot zinc prices are tracking roughly 15% above the June quarter average, while silver prices have rebounded strongly by 23% from their recent July lows. Consequently, Jefferies has revised Hindustan Zinc's Earnings Per Share (EPS) estimates upward by 10% to 11% for fiscal years 2027 through 2029, placing its projections 16% to 23% ahead of consensus market estimates. Analysts note that sustained high commodity prices could unlock an additional 12% upside in FY2028 earnings.
Government Clarification Eases OFS Pressure
The sharp upward momentum in Hindustan Zinc shares was also aided by the fading of overhang pressures related to a potential government Offer for Sale (OFS). Market sentiment had faced considerable volatility a day prior due to speculative fears regarding a government stake sale, which typically exerts downward pressure on share prices via discounted offerings.
However, official clarifications emerged confirming that the government currently has no immediate plans to launch an OFS for Hindustan Zinc. This timely reassurance lifted investor uncertainty, allowing the stock to recover sharply from previous sessions' losses.
Hindalco Receives 'Hold' Rating With Upgraded Target
Alongside Hindustan Zinc, Jefferies updated its outlook on Hindalco Industries, maintaining a Hold rating while raising its target price from ₹1,100 to ₹1,140, representing a potential upside of over 8% from its previous close.
While the brokerage trimmed its FY2027–29 EPS estimates by 2% to 3% due to subdued global aluminum prices—currently lingering about 10% below June quarter averages—the target price was adjusted upward following the rolling forward of valuation timelines to September 2028. Despite near-term commodity pressures, Hindalco has demonstrated robust relative strength, gaining approximately 17.4% since the beginning of the year and outperforming benchmark indices.
