Hindustan Copper: Reasons Why Anand Rathi Is Bullish on This PSU Stock

Synopsis: Hindustan Copper is advancing an extensive expansion strategy through mine revivals, capacity additions and infrastructure investments, positioning itself to capitalise on rising domestic copper demand and strengthen long-term operational growth. 

The shares of this mid cap company majorly engaged in producing copper in various processes right from copper mining to the final stage of converting copper into saleable products were in focus after brokerage sees around 43 percent upside potential. 

With the market capitalization of Rs. 47,466 Crores, the shares of Hindustan Copper Ltd were trading at around Rs. 498 per share which is 34 percent discount from its 52 week high of Rs. 760 per share and is trading at a P/E of Rs. 48.8 where as industry P/E stands at 55.3

Brokerage View

Anand Rathi remains constructive on Hindustan Copper’s long-term growth prospects, citing its multi-pronged capacity expansion, mine revival initiatives, robust capex pipeline and favourable copper demand outlook. The brokerage has maintained its ‘Buy’ rating with a target price of ₹715, implying an upside potential of around 43% from the prevailing market price of ₹498, while noting that timely execution of expansion projects and sustained operational momentum could drive long-term value creation.

Multi-Pronged Expansion to Drive Future Growth

Hindustan Copper is executing a comprehensive expansion strategy aimed at significantly increasing its mining and processing capabilities over the coming years. The company has resumed operations at the 0.2 million-tonne Kendadih mine and plans to double its capacity to 0.4 million tonnes. It is also evaluating the revival of the Pathargora (Jharkhand) and Dikchu (Sikkim) copper blocks, which feature relatively higher ore grades of around 3–4%, supporting the next phase of growth beyond CY30-31. 

Additionally, the company expects cumulative MIC volume to exceed 0.1 million tonnes by FY31, while revenue is projected to grow 3.3x to around ₹102 billion and EBITDA 3.5x to nearly ₹51 billion over FY26-31.

Gujarat Copper Plant Revival to Enhance Profitability

The company has awarded a 20-year revenue-sharing contract to restart the 50,000-tonne Gujarat Copper Plant (GCP), which will manufacture 99.99% LME-grade copper cathodes. The revenue-sharing arrangement begins at 2.25% for production of up to 20,000 tonnes, declines to 2% for 20,001-37,500 tonnes, and further reduces to 1.75% beyond 37,500 tonnes. At optimal utilisation, the revived plant is expected to generate an additional ₹1.1-1.25 billion in revenue while requiring limited incremental capital expenditure.

Large Capex Programme Supports Vision 2030

To achieve its long-term production goals, Hindustan Copper has earmarked more than ₹67 billion of capital expenditure through FY30. A major component of this programme includes over ₹15.5 billion worth of expansion packages at the MCP complex, featuring a 3 million-tonne concentrator plant, production and service winders, underground crusher, ventilation systems and other infrastructure. The company expects the new shaft to be commissioned by April 2029, while the concentrator plant is targeted for completion within the next 24 months, helping expand concentrator capacity to around 5.7 million tonnes.

Strong Near-Term Operating Momentum

Anand Rathi expects Hindustan Copper to deliver a strong Q1 FY27, driven by higher production volumes, favourable copper prices and a weaker Indian rupee. The brokerage forecasts revenue to rise around 65.6% year-on-year to approximately ₹8.54 billion, supported by nearly 10% rupee depreciation, about 25% growth in realised LME copper prices, roughly 30% increase in sales volumes, and a marginal 1% benefit from TC/RC movements. 

MIC sales volume is expected to increase to over 6,770 tonnes from 5,449 tonnes a year earlier, as the base quarter was impacted by planned maintenance and expansion-related shutdowns. Improved copper price realisations, aided by an adjusted increase of around $2,479 per tonne including premium and TC/RC adjustments, are also expected to support the company’s earnings momentum.

Copper Demand Remains a Structural Tailwind

India’s annual copper demand stands at around 1.55 million tonnes, with 38-40% being met through the scrap-based (secondary) route. Against this backdrop, Hindustan Copper’s partnership is aimed at making better use of existing infrastructure while strengthening the country’s copper value chain as domestic demand continues to grow. The additional production is expected to support rising consumption from key sectors such as electronics, power infrastructure, construction, electric vehicles, renewable energy and manufacturing, which are emerging as major drivers of copper demand in the country.

Conclusion

Hindustan Copper appears well positioned for sustained long-term growth, supported by its expansion strategy, mine revival initiatives, infrastructure development and improving operational efficiency. Rising domestic copper demand across emerging industries further strengthens its outlook. While execution timelines and commodity price volatility remain key monitorables, the company’s ongoing investments and capacity enhancement plans provide a solid foundation for future value creation.

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