Shares of Hindustan Zinc, a Vedanta Group company and the world’s largest integrated zinc producer, continued to trade higher for the third straight session on Thursday, December 11, even as broader markets remained volatile.

After surging 4.3% in the previous session, the shares opened the day at ₹516.50 apiece and went on to reach a day’s high of ₹532 apiece, 4% higher than the previous close, edging closer to the 1-year peak of ₹546.80 apiece.

The rally in the mining major coincides with the record-breaking run-in spot silver prices, supported by strong industrial demand, falling inventories, and its inclusion in the U.S. critical minerals list.

Silver’s rally shows no signs of slowing

In today’s session, spot silver prices touched another historic high of $62.89 per ounce, bringing its year-to-date gain to 113%, following the U.S. Federal Reserve’s widely anticipated 25-basis-point cut in the key benchmark interest rate.

Domestically, February silver futures rose to an all-time high of ₹1,93,452 per kilogram on MCX today. In November alone, prices have jumped 16%, resulting in a year-to-date surge of 121.30%.

The strong increase in the white metal’s price is expected to boost company margins, as relatively stable production costs, coupled with higher selling prices, result in increased profits per unit sold.

Unlike gold, silver is used in many industries, with solar panel manufacturing being a key driver of consumption. Additionally, investments in silver—both in physical form and through exchange-traded funds (ETFs)—continue to rise, reflecting growing confidence in the metal’s investment potential.

Reports also suggest that global central banks, after accumulating large quantities of gold, have shifted their focus to silver, with some banks already purchasing significant quantities of the metal in the international market, further supporting the rally.

The robust rise in demand has created a tight physical market, which experienced a historic supply squeeze in October in the benchmark London market amid surging demand from India and silver-backed ETFs.

Silver remains key profit driver in Q2

In the September quarter, the company reported a 14% year-on-year jump in consolidated net profit to ₹2,649 crore, with silver remaining a key contributor, driving approximately 40% of overall profitability.

Prices of silver were, on average, 34% higher year-on-year during the quarter at $39.4 per ounce, even as zinc and lead prices remained relatively flat. Every $1 increase in silver price adds about ₹200 crore in the company’s earnings before interest, tax, depreciation and amortization (Ebitda), as per an investor presentation.

This reflected in the company’s margins. Ebitda, a measure of operating income, rose nearly 7% to ₹4,209 crore despite the lower production numbers.

Hindustan Zinc, a subsidiary of the Vedanta Group, specialises in the exploration, mining, and smelting of zinc, lead, and other non-ferrous metals. The company’s products include zinc ore, lead-zinc concentrate, zinc metal, lead metal, cadmium metal, silver metal, and sulfuric acid.

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