Silver has delivered an extraordinary rally ahead of Dhanteras 2025, outperforming gold as a severe global supply squeeze drives premiums in physical markets.
Silver has also stolen the spotlight at Hindustan Zinc Limited (HZL). The Vedanta Group-owned miner has reported its highest-ever second-quarter revenue from operations at Rs 8,549 crore, marking a 10% quarter-on-quarter increase, with silver alone contributing 40% to total profits – a testament to the company’s strategic edge in precious metals.
The company’s profit after tax stood at Rs 2,649 crore, up 19% sequentially, with silver emerging as a critical driver. Revenue from silver touched Rs 1,706 crore, up 10% QoQ and 20% YoY, driven by strong industrial and investment demand amid a global supply crunch. The surge was amplified by the extraordinary rally in silver prices – MCX silver futures climbed nearly 70% in 2025, with spot rates crossing Rs 2 lakh per kilogramme in some Indian cities.
Hindustan Zinc, one of the world’s top five silver producers, has successfully leveraged this price momentum. The company delivered a robust EBITDA margin of 52%, supported by technological upgrades and efficiency measures that brought zinc production costs to their lowest level in five years. This operational strength has helped HZL maintain profitability even as global metal markets remain volatile.
Commenting on the performance, Arun Misra, CEO of Hindustan Zinc, said: “We have delivered the best-ever second-quarter mined metal production, reflecting continuous operational excellence. Our inclusion in the International Council on Mining and Metals (ICMM) as the first-ever from India reiterates our deep commitment to responsible mining.” The recognition positions Hindustan Zinc among a select group of global leaders championing sustainable and ethical mining practices.
CFO Sandeep Modi underscored the strategic importance of silver to HZL’s business model. “With silver contributing around 40% to profits, we are well-positioned to leverage commodity tailwinds while strengthening sustainable value creation through disciplined cost management,” he said. Modi noted that silver’s growing share in profits highlights the company’s ability to balance cyclical base metal markets with the relative resilience of precious metals.
HZL’s operational excellence and technology-driven efficiencies continue to yield results. The firm’s five-year-low zinc production cost demonstrates the impact of ongoing automation, digitisation, and process optimisation initiatives. These efforts have allowed HZL to maintain strong margins despite rising energy and input costs.
However, despite the stellar financial and operational performance, Hindustan Zinc’s stock has risen only around 13% in 2025, reflecting broader market caution. The shares were trading 1.3% lower at Rs 500 on the BSE during Friday’s afternoon session.
With silver now representing a cornerstone of Hindustan Zinc’s profit profile, analysts say the company’s diversified portfolio – spanning zinc, lead, and precious metals – places it in a favourable position to ride ongoing commodity tailwinds. As the global push for industrial metals and clean-energy demand intensifies, HZL’s combination of cost efficiency, sustainability, and silver strength could help sustain its momentum well into FY26.
Silver price rally
Silver has staged an extraordinary rally ahead of Dhanteras 2025, outpacing gold as a severe global supply squeeze pushes premiums in physical markets to historic levels. International spot silver recently touched $53 per ounce, surpassing levels last seen during the Hunt brothers’ short squeeze of 1980. In India, IBJA spot rates surged to Rs 1.78 lakh per kilogram, significantly above MCX futures at Rs 1.62 lakh, reflecting acute scarcity and widening backwardation. A liquidity crunch in major trading hubs such as London, where one-month lease rates briefly exceeded 30% and overnight borrowing costs crossed 100%, forced short sellers to pay steep premiums to roll contracts.
Festive buying in India has further intensified tightness, with silver imports nearly doubling from last year. Retail prices in Mumbai’s Zaveri Bazaar reportedly crossed ₹2 lakh per kilogram. In response, major mutual fund houses including SBI, Kotak, and UTI temporarily halted subscriptions to silver ETFs to protect investors from extreme spot premiums.
Silver’s strength is driven by a dual factor: robust industrial demand from sectors like solar, EVs, and electronics, and safe-haven interest amid geopolitical tensions and a weakening U.S. dollar. Ventura Securities projects MCX silver to reach Rs 1.80-2.10 lakh per kg, while COMEX targets $65-70 per ounce, though volatility is expected to continue until supply pressures ease.