Hindustan Zinc favored by Jefferies as metal prices diverge

Jefferies has updated its outlook on the metals and mining sector, favoring Hindustan Zinc (HZL) over Hindalco Industries Ltd due to diverging metal prices. The brokerage raised its target price for Hindustan Zinc to Rs 750 from Rs 660, implying a 31 per cent total shareholder return, and issued a 'Buy' recommendation.

This preference is driven by rising zinc and silver prices, which are outperforming aluminum. Jefferies raised its FY27-29 earnings estimates for Hindustan Zinc by 10-11 per cent. Conversely, the brokerage maintained a 'Hold' rating on Hindalco, raising its target price to Rs 1,140 from Rs 1,100, while cutting earnings estimates by 2-3 per cent due to lower aluminum prices.