HINDCOPPER - Hindustan Copper

📊 NSE: HINDCOPPER 🏢 Mining / Minerals / Metals 📅 Last Updated: 12/13/2025 23:02

💰 Financial Performance

Revenue Growth by Segment

Revenue from operations grew 20.6% YoY from INR 1,717.0 Cr in FY24 to INR 2,071.0 Cr in FY25. Q1 FY26 revenue stood at INR 516.37 Cr, representing a 4.6% increase compared to Q1 FY25 (INR 493.6 Cr). The company is primarily focused on Metal in Concentrate (MIC) sales as smelting and refining operations at ICC and GCP remain marginal or suspended.

Geographic Revenue Split

Not disclosed in available documents; however, the company operates major units in Rajasthan (KCC), Madhya Pradesh (MCP), Jharkhand (ICC), and Gujarat (GCP).

Profitability Margins

Net Profit Margin (PAT/OI) improved significantly from 17.2% in FY24 to 22.6% in FY25, and further reached 26.0% in Q1 FY26. This expansion is driven by higher LME copper prices and a shift toward selling high-margin MIC rather than refined products.

EBITDA Margin

EBITDA Margin (OPBDIT/OI) increased from 33.2% in FY24 to 38.5% in FY25, and rose to 41.1% in Q1 FY26, reflecting a YoY improvement of 530 basis points for the full year due to better cost absorption and favorable commodity pricing.

Capital Expenditure

Historical CAPEX for FY25 was INR 518.14 Cr, exceeding the MoU target of INR 428.06 Cr. The company plans annual CAPEX of INR 400-500 Cr to expand ore production capacity from 4 MTPA to 12 MTPA by 2031, including a INR 2,700 Cr investment at the Rakha mine funded by the MDO (South West Mining).

Credit Rating & Borrowing

ICRA maintains a strong credit rating with a 'Strong' liquidity profile. Total debt decreased from INR 222.46 Cr in March 2024 to INR 154.98 Cr by June 2025. Interest coverage ratio improved dramatically from 34.4x in FY24 to 102.7x in FY25.

⚙️ Operational Drivers

Raw Materials

Copper Ore (Internal Mining) represents the primary input. Smelting and refining costs are high due to vintage plants, leading the company to focus on MIC production where the cost of production is estimated at $5,000-$6,000 per ton, including overheads.

Import Sources

Primarily domestic sourcing from owned mines in Madhya Pradesh (Malanjkhand), Rajasthan (Khetri), and Jharkhand (Rakha, Kendadih).

Key Suppliers

South West Mining (a JSW Group company) is the Mine Developer and Operator (MDO) for the Rakha asset under a 12.5% revenue-sharing agreement.

Capacity Expansion

Current ore production is approximately 4 MTPA; expanding to 12 MTPA by 2029-2031. Malanjkhand is targeting 5 MTPA with existing EC approvals. MIC production is targeted to grow 4x from 24,000-28,000 tons to 96,000 tons.

Raw Material Costs

Employee costs are approximately INR 300 Cr per annum, and depreciation/amortization is INR 300 Cr. Total production cost is linked to LME prices, with a target grade of 0.7% to 0.8% for underground mined ores.

Manufacturing Efficiency

MDO mode is expected to bring higher operational efficiency and flexibility compared to departmental mining. Capacity utilization is being ramped up through new shaft development at Malanjkhand (2-2.5 year timeline).

📈 Strategic Growth

Expected Growth Rate

30%

Growth Strategy

Achieving a 4x increase in MIC production (to 96,000 tons) and a revenue target of INR 10,000 Cr by 2031 through the expansion of Malanjkhand to 5 MTPA, Khetri to 6 MTPA, and the reopening of Rakha via MDO. The strategy shifts focus from low-margin refining to high-margin MIC sales.

Products & Services

Metal in Concentrate (MIC), Copper Cathode, and Continuous Cast Copper Wire Rods.

Brand Portfolio

Hindustan Copper (HCL).

New Products/Services

Increased focus on high-grade underground mined ores which are expected to contribute to a 400% increase in MIC volume.

Market Expansion

Targeting the domestic infrastructure and renewable energy sectors, driven by affordable housing and rural electrification demand.

Market Share & Ranking

HCL is the only vertically integrated copper producer in India owned by the Government of India.

Strategic Alliances

Revenue sharing agreement (12.5%) with South West Mining (JSW) for the Rakha mine development.

🌍 External Factors

Industry Trends

Growing demand for copper in the electrical segment due to renewable energy and infra sector growth. The industry is shifting toward MDO models to mitigate high CAPEX risks.

Competitive Landscape

Competes with private players in the refined copper market but holds a monopoly on domestic copper ore mining.

Competitive Moat

Moat includes PSU status, sovereign support from the GoI, and long-term mining leases valid until 2040-2042. These provide high financial flexibility and a dominant position in domestic ore reserves.

Macro Economic Sensitivity

Highly sensitive to global copper demand in infrastructure and EV sectors; revenue is projected to grow to INR 10,000 Cr if LME prices remain favorable.

Consumer Behavior

Increased demand for copper in 'green' technologies and electrification.

Geopolitical Risks

Global politics affecting TCRC rates, which have reversed to negative levels over the last 8-10 months, impacting miner realizations.

⚖️ Regulatory & Governance

Industry Regulations

Mining activities are governed by the Ministry of Mines; leases are valid for 20 years (until 2040/2042).

Environmental Compliance

Exposed to environmental risks from mining; compliance measures could increase costs or result in penalties. ICRA notes environmental and social risks as key rating sensitivities.

Taxation Policy Impact

Subject to statutory payments including Royalty, District Mineral Foundation (DMF), and National Mineral Exploration Trust (NMET).

Legal Contingencies

Fines of INR 9,77,040 each imposed by BSE and NSE (Total ~INR 19.54 Lakhs) as of Nov 2025 for non-compliance with SEBI LODR Regulations 17(1), 18(1), and 19(1) regarding board and committee composition. Large contingent liabilities are also noted by ICRA.

⚠️ Risk Analysis

Key Uncertainties

Volatility in LME copper prices (high impact), project implementation delays in shaft sinking at Malanjkhand (medium impact), and regulatory non-compliance leading to 'Z Category' trading status (high impact).