While there could be a short-term decline, the analyst sees long-term potential in the stock, with supporting weekly charts and strong fundamentals
Hindustan Zinc’s shares could offer a 20% upside from current levels, even if the short-term trend appears bearish, said SEBI-registered analyst Deepak Pal.
Pal noted that on the weekly chart, technical indicators such as the moving average convergence/divergence (MACD), relative strength index (RSI), and parabolic SAR continue to reflect weakness. Meanwhile, on the daily chart, the stock appears to be undergoing a corrective phase.
Hindustan Zinc stock has been on a downtrend since June 8, when it touched a high of ₹546.8. However, signs of recovery were evident last week, as the stock closed the week at ₹451.15. The shares had fallen to ₹435.40 earlier in the week.
On Monday, Hindustan Zinc closed at ₹451.30.
On the weekly timeframe, the stock is taking support at its 200-day Exponential Moving Average (EMA), with visible buying interest this week. It is now approaching its 14-week EMA, and sustaining above key EMAs could signal a bullish breakout.
Pal recommended taking a position around ₹450–₹451, and cautioned a stop-loss at ₹435. On the upside, he expects the stock to potentially retest the ₹550 - ₹551 range in the near term, offering over 20% upside from current levels.
The company’s fundamentals appear solid. It has an ROE of 73%, ROCE of 59%, EBITDA margin of 54%, and ₹1.02 lakh crore in free cash flow over the past year.
In Q4 FY25, it posted a record net profit of ₹3,003 crore, driven by strong volumes and cost efficiencies. The company is investing ₹12,000 crore to double its metal output over the next three years, while also scaling renewable energy to meet 70% of its power needs and raising ₹500 crore through NCDs.
Retail sentiment on Stocktwits remained ‘bearish’.
Year-to-date (YTD), the stock has gained 1.7%.
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