Silver at Lifetime High: 2 Indian Stocks to Benefit from the Rally

Silver prices have surged sharply in 2025, touching fresh lifetime highs amid supportive global monetary policy, strong industrial demand and tightening supply. While gold has remained firm, silver has clearly outperformed, emerging as one of the best-performing assets this year. This sharp rally in the precious metal is expected to directly benefit Indian companies with meaningful silver exposure, particularly Vedanta Limited and Hindustan Zinc Limited.

Vedanta and Hindustan Zinc: Key Beneficiaries

The rise in silver prices has translated into strong stock market performance for Indian mining companies. Vedanta and its subsidiary Hindustan Zinc have been in focus as both derive significant value from silver production, positioning them well in the current commodity upcycle.

Hindustan Zinc: Direct Exposure to Silver Upside

Hindustan Zinc, the Vedanta group’s flagship zinc and silver producer, is one of the largest beneficiaries of the silver rally. The company produces refined silver with a minimum purity of 99.9 per cent and is India’s largest silver producer and the world’s third-largest globally. It also operates the world’s largest silver-producing underground mine at Sindesar Khurd in Rajasthan.

Reflecting this favourable backdrop, Hindustan Zinc shares jumped nearly 5 per cent on Friday to Rs 548.15 per share. The stock has gained more than 12 per cent in December alone as silver prices scaled new lifetime highs.

Why Hindustan Zinc Benefits the Most

Silver recovery at Hindustan Zinc occurs as a by-Service during zinc smelting and refining. This makes the company’s earnings highly sensitive to silver price movements, while incremental costs remain limited. In FY 2024–25, Hindustan Zinc produced 687 tonnes of refined silver, strengthening its position as a key supplier to global markets. Rising silver prices therefore provide a direct boost to margins and profitability.

Vedanta: Strong Indirect Play on Silver

Vedanta Limited also stands to benefit meaningfully from the ongoing silver rally through its stake in Hindustan Zinc. As per the 2024 World Silver Survey, Hindustan Zinc is the world’s third-largest and India’s largest silver producer, producing 687 tonnes of refined silver in FY 2024–25.

Any improvement in Hindustan Zinc’s profitability creates a rub-off effect for Vedanta at the consolidated level. When silver hit record highs on December 12, Hindustan Zinc shares climbed 5 per cent, while Vedanta traded at Rs 539.15, up nearly 2 per cent and close to its 52-week high. With relatively low production costs, including an all-in sustaining cost of USD 994 per tonne of zinc, Vedanta’s earnings benefit further during a precious metals rally.

Why Have Silver Prices Rallied?

Silver prices have jumped about 132 per cent domestically in 2025, while global spot prices are up nearly 120 per cent year-on-year. The metal recently crossed the Rs 2 lakh mark to reach a historic high of around Rs 2,04,000 per kg.

The rally has been driven by strong industrial demand and a tightening supply scenario. A structural supply-demand gap has emerged as global inventories decline, while demand from the solar industry, where silver is a critical component in photovoltaic cells, continues to rise. This imbalance has created a scarcity premium for silver.

Additionally, the US has added silver to its critical minerals list, increasing its strategic importance. US Federal Reserve rate cuts have lowered real yields, pushing investors toward precious metals. Strong demand from India has further supported prices, highlighting silver’s growing global importance.

Conclusion

As 2025 approaches its end, supportive monetary policy, a structural supply deficit and robust industrial demand continue to underpin silver prices. While short-term volatility cannot be ruled out, silver’s fundamentals remain strong. For Indian investors, Vedanta and Hindustan Zinc offer leveraged exposure to the ongoing silver rally.

Disclaimer: The article is for informational purposes only and not investment advice.