Mumbai, October 1 (Market Outlook) – Emkay Global Financial has reiterated its buy rating on Vedanta Ltd., setting a target price of ₹525 per share. The brokerage’s optimism is largely driven by the strong performance of Hindustan Zinc (HZ), a core contributor to Vedanta’s portfolio.
Hindustan Zinc: Riding the Silver Wave
- Silver prices are up 63% YTD, now trading at USD 47/oz compared with USD 34/oz in Q1FY26 and USD 30/oz in FY25.
- Analysts believe that the market is still underpricing Hindustan Zinc’s exposure to silver, even as global peers like Fresnillo and Grupo Mexico have already re-rated significantly this year.
- HZ contributes nearly 40% of Vedanta’s EBITDA, making it central to the group’s earnings profile.
Sensitivity to Silver Prices
Emkay highlights that:
- A USD 1/oz move in silver results in 1% sensitivity to HZ’s EBITDA.
- Since silver is a by-product of zinc production, almost 88% of silver revenues flow directly into EBITDA because production costs remain tied to zinc.
Market Context and Peerr
The note suggests that as silver continues its upward trajectory, the market will eventually reprice HZ higher, aligning it with the recent performance of global mining peers.
Other Market Highlights
- Pakistan Test-Fires Fatah-4 Missile: Pakistan successfully tested its Fatah-4 cruise missile, featuring a 750 km range and advanced navigation systems. The test underscores regional military developments.
- Festive Online Sales: India’s e-commerce sector recorded ₹60,700 crore in sales in the first week of the festive season, supported by GST cuts and robust consumer demand.
- Aishwarya Rai’s Viral Moment: At Paris Fashion Week, digital creator Aditya Madiraju told the actress that his husband married him because he was her fan, drawing warm reactions online.
Outlook
Emkay Global believes that Vedanta remains a strong play on rising silver prices via Hindustan Zinc. With the stock trading below its potential, the brokerage expects re-rating in the near term, justifying its ₹525 target price.