Current Rating Overview
On 09 October 2025, Hindustan Zinc Ltd’s rating was adjusted from 'Sell' to 'Hold' by MarketsMOJO, reflecting a significant improvement in its overall assessment. The company’s Mojo Score rose by 23 points, from 42 to 65, signalling a more balanced outlook for investors. This 'Hold' rating suggests that while the stock is not currently a strong buy, it remains a viable investment option with moderate risk and potential for steady returns.
Here’s How the Stock Looks Today
As of 28 December 2025, Hindustan Zinc Ltd continues to demonstrate robust market performance and solid financial health, though certain valuation concerns temper enthusiasm. The stock has delivered impressive returns, with a 1-year gain of 40.49% and a year-to-date return of 43.51%. Over the past six months, the share price has risen by 41.88%, reflecting strong investor confidence in the company’s prospects.
Quality Assessment
The company’s quality grade is rated as 'good', underpinned by high management efficiency and operational strength. Hindustan Zinc Ltd boasts a remarkable Return on Capital Employed (ROCE) of 85.81%, indicating excellent utilisation of capital to generate profits. Additionally, the firm maintains a low Debt to EBITDA ratio of 0.15 times, highlighting its strong ability to service debt and maintain financial stability. These factors contribute positively to the company’s overall quality profile, reassuring investors about its operational soundness.
Valuation Considerations
Despite strong fundamentals, the valuation grade is marked as 'very expensive'. The stock trades at a premium, with an Enterprise Value to Capital Employed ratio of 16.1, which is significantly higher than the sector average. This elevated valuation reflects investor optimism but also implies limited upside potential unless earnings growth accelerates. The company’s PEG ratio stands at 1.3, suggesting that the current price is somewhat justified by expected earnings growth, but caution is warranted given the premium pricing.
Financial Trend Analysis
The financial trend for Hindustan Zinc Ltd is classified as 'flat'. While the company has shown steady profitability, operating profit growth over the last five years has been modest at an annual rate of 5.23%. The latest half-year results indicate a stable but unspectacular performance, with cash and cash equivalents at a low ₹151 crore. Profit growth over the past year has been 20.1%, which, although positive, does not fully match the pace of the stock’s price appreciation. This flat trend suggests that investors should monitor future earnings developments closely.
Technical Outlook
Technically, the stock is rated as 'bullish'. Recent price movements show strong momentum, with a 1-month gain of 35.41% and a 3-month gain of 41.83%. The stock’s 1-day change of +1.9% on 28 December 2025 further confirms positive market sentiment. This bullish technical stance supports the 'Hold' rating by indicating that the stock may continue to perform well in the near term, although valuation and financial trends advise prudence.
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- - Fundamental Analysis
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Key Market and Sector Position
Hindustan Zinc Ltd is a large-cap leader in the Non-Ferrous Metals sector, with a market capitalisation of approximately ₹2,64,019 crore. It commands a dominant 45.62% share of the sector and contributes 15.89% of the industry’s annual sales, which total ₹34,021 crore. This commanding presence provides the company with competitive advantages, including scale efficiencies and market influence.
Risks and Concerns
Investors should be mindful of certain risks associated with the stock. Notably, 90.28% of promoter shares are pledged, which can exert downward pressure on the stock price during market downturns. Additionally, the company’s long-term growth prospects appear limited given the modest operating profit growth rate. The flat financial trend and expensive valuation also suggest that the stock may be vulnerable to corrections if earnings fail to meet expectations.
Performance Relative to Benchmarks
Hindustan Zinc Ltd has outperformed the BSE500 index over multiple time frames, including the last three years, one year, and three months. This market-beating performance highlights the company’s resilience and appeal to investors seeking exposure to the metals sector. However, the 'Hold' rating reflects a balanced view that recognises both the stock’s strengths and its valuation challenges.
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What the Hold Rating Means for Investors
The 'Hold' rating on Hindustan Zinc Ltd indicates that the stock is fairly valued at present, with a balanced risk-reward profile. Investors are advised to maintain their current positions rather than initiate new buys or sells. The rating suggests that while the company’s fundamentals and technicals are supportive, the expensive valuation and flat financial growth warrant caution. Investors should monitor upcoming earnings reports and sector developments closely to reassess the stock’s outlook.
Summary
In summary, Hindustan Zinc Ltd’s current 'Hold' rating reflects a nuanced view of a company with strong operational quality, excellent management efficiency, and bullish technical momentum, offset by a very expensive valuation and modest financial growth. The stock’s market-beating returns over the past year and dominant sector position make it a noteworthy holding for investors seeking exposure to the non-ferrous metals space, but the premium price and pledged promoter shares suggest a need for vigilance.
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