Brokerage firm Anand Rathi has reiterated its 'Buy' rating for state-owned Hindustan Copper Ltd (HCL) shares, setting an ambitious target price of Rs 715. The positive outlook comes as global copper prices continue to rally, with many international miners trading at decade-high valuation multiples.
Strong Fundamentals Drive Optimism for Hindustan Copper
Anand Rathi's recommendation is underpinned by several factors pointing to robust fundamentals within the non-ferrous metals sector, particularly for copper. Global copper inventories have seen a significant drawdown, with LME warehouses in South Korea, Taiwan, and Singapore reporting a 47 percent reduction since mid-May. This supply tightening is a key driver supporting elevated global copper prices.
The brokerage highlights that global majors like First Quantum Minerals, Ivanhoe, and Southern Copper are already reflecting this strength, trading with sector-leading forward EV/Ebitda multiples of 14.6 times, 13 times, and 14.4 times, respectively.
Global Supply Constraints and Price Surge
The recent surge in copper prices is attributed to a combination of trade dislocations and a demand tug-of-war, particularly between the US and China. Global inventories at both the London Metal Exchange (LME) and Shanghai Futures Exchange (SHFE) have tightened further due to increased shipments to the US in anticipation of tariff decisions.
Adding to the supply squeeze, several global miners have cut their 2026 production guidance despite limited mine disruptions in the first half of the year. Specific issues exacerbating the situation include the Democratic Republic of Congo's blanket export ban on raw copper concentrates, an outage at Indonesia’s Gresik smelter, and Chile's repeated downward revisions of its copper output forecasts. These factors are expected to maintain upward pressure on global copper prices.
Hindustan Copper's Stellar Performance and Future Outlook
Hindustan Copper has demonstrated exceptional operational strength, reporting its best-ever first-quarter performance for the June quarter. Revenue soared by 81.4 percent year-on-year to Rs 937 crore, surpassing Anand Rathi's estimate. Earnings Before Interest, Taxes, Depreciation, and Amortization (EBITDA) jumped an impressive 139.4 percent year-on-year to Rs 510 crore, with an EBITDA margin of 54.2 percent.
This remarkable improvement was driven by a 39.5 percent year-on-year rise in blended quarterly copper prices, a 10.6 percent depreciation of the Indian Rupee, lower treatment and refining charges (TC/RC), and enhanced volume and grade of ore produced.
Looking ahead, Hindustan Copper boasts strong operational visibility and a multi-decade production runway. The company benefits from renewed mining leases and the potential revival of key blocks such as Pathargora in Jharkhand and Dikchu in Sikkim, ensuring adequate production capacity beyond 12.2 million tonnes. This contrasts with the broader global copper industry, where a significant number of large mines lack operational plans beyond 2040, facing challenges like grade depletion, complex underground operations, and power constraints.
Furthermore, Hindustan Copper's cash cost of approximately $2.8 per pound is competitive, comparable to international peers such as China Gold International ($2.74/pound), Sociedad Minera El Brocal ($2.92/pound), Atalaya ($2.4/pound), Ivanhoe ($2.2/pound), and Glencore ($2.77/pound).