Hindustan Copper share price has fallen 10% in one month, and analysts believe this correction should be viewed as an attractive accumulation opportunity, given the company’s strong operational outlook, visible volume growth, and long-term expansion pipeline.
Brokerage firm Anand Rathi has noted that Hindustan Copper is undertaking a multi-pronged strategy to expand its capacity, with a 20-year revenue-sharing contract rewarded to restart, upgrade and maintain the 50,000 tonne Gujarat Copper Plant.
At current LME copper prices and optimal utilisation levels, the plant is expected to generate incremental revenue of ₹110 – ₹125 crore for Hindustan Copper.
The company has also resumed operations at the 0.2 million-tonne Kendadih copper mine and plans to double its capacity to 0.4 million tonne. It also mulls reviving Pathargora (Jharkhand) and Dikchu (Sikkim) copper blocks.
“Though the operations at these mines are likely to be relatively small-scale, superior ore grade (average ~3-4%) should offset lower production volume. Potential revival of these blocks is likely to pave the next phase of expansion beyond CY30-31,” Anand Rathi said in a report.
Considering strong growth momentum, the brokerage firm expects cumulative MIC volume to top 0.1 million tonne by FY31e. As the demand for copper is likely to rise due to new-age applications, domestic demand is likely to more than double over the next decade.
Anand Rathi expects Hindustan Copper’s revenue to rise by 3.3x to ₹10,200 crore over FY26-31 with ~3.5x rise in EBITDA to ₹5,100 crore.
Considering its long-term growth prospects, Anand Rathi maintained a ‘Buy’ rating on Hindustan Copper stock with a twelve months share price target of ₹715, valuing it at 8.7x FY30e EV/EBITDA. Hindustan Copper share price target implies an upside potential of 45% from Thursday’s closing price.
Key risks include volatility in commodity prices, delay in mining capex, and undue delay in volume expansion, Anand Rathi said.
Hindustan Copper Share Price Performance
Hindustan Copper share price has fallen 10% in one month, and has dropped 6% on a year-to-date (YTD) basis. The PSU stock has gained 12% in six months, and has rallied 90% in one year. Hindustan Copper share price has delivered multibagger returns of 331% in five years and a staggering 867% over the past ten years.
On Thursday, Hindustan Copper share price ended 1.87% lower at ₹491.35 apiece on the BSE.
Disclaimer: The views and recommendations made above are those of individual analysts or broking companies, and not of Mint. We advise investors to check with certified experts before making any investment decisions.
