Hindustan Copper shares extended their remarkable rally for an eighth consecutive session on Tuesday, rising close to 7% in early trade. This exceptional momentum follows a sharp 15% surge on Monday, when the stock hit a fresh all-time high of ₹545.95, marking the sharpest single-day gain since April 2010.

Record Performance and Market Milestone

The ongoing eight-session rally has delivered extraordinary returns for investors, with the stock gaining nearly 40% during this period. At its intraday high on Tuesday, the company's market capitalisation approached the significant milestone of ₹50,000 crore, reflecting the strong investor confidence in the copper sector.

Global Copper Prices Drive Momentum

The rally has been primarily driven by copper prices on the London Metal Exchange hovering near $13,000 per tonne after scaling record levels. This surge is supported by multiple favorable factors including tight global supplies, supportive US economic data, expectations of interest rate cuts by the US Federal Reserve, and a weaker dollar.

A softer dollar typically boosts demand for dollar-denominated commodities by making them cheaper for holders of other currencies. Tracking these global cues, copper futures on the Multi Commodity Exchange of India also hit a fresh record high.

Strong Retail and Institutional Interest

The company's shareholding pattern reveals broad-based investor participation. As of the end of the September quarter, the government maintained a 66.14% stake in the PSU. Retail investors, defined as those with authorised share capital of up to ₹2 lakh, accounted for over 6.30 lakh shareholders and owned a combined 14.50% stake.

Life Insurance Corporation of India owned over 4% of the company, a stake now valued at more than ₹2,000 crore, while mutual funds maintained negligible holdings.

Market Activity and Outlook

The exceptional trading activity continued on Tuesday, with nearly 7 crore shares changing hands within the first two hours of trade. At the time of reporting, the stock was trading 5.64% higher at ₹514.95, maintaining its strong upward trajectory.

With copper demand expected to remain robust due to global electrification trends, renewable energy deployment, and infrastructure development, Hindustan Copper, as India's only vertically integrated copper producer, remains well-positioned to capitalize on the structural tailwinds driving the metal's exceptional performance in 2025.

Hindustan Copper shares have delivered exceptional returns with a nearly twofold surge year-to-date, but this rally extends far beyond the recent copper price appreciation, according to Parthiv Jhonsa, Vice-President at Anand Rathi Institutional. Speaking to ET Now, Jhonsa emphasized that while copper prices touching $13,000.00 per tonne on the London Metal Exchange have supported sentiment, the stock's re-rating reflects deeper structural fundamentals.

Volume Growth and Operational Visibility Drive Performance

The company has demonstrated consistent concentrate volume growth over the last four to five quarters, supported by a significant milestone in securing lease extensions. Hindustan Copper has obtained extensions for all seven mine leases across Rajasthan and Jharkhand, extending operations until 2040-2043.

Jhonsa highlighted that the rally stems from multiple factors including higher volumes, forex tailwinds, and lease certainty, rather than copper prices alone.

Sustainable Copper Price Environment

While acknowledging that copper prices may not maintain extreme highs, Jhonsa believes prices above $10,500.00-11,000.00 per tonne remain sustainable over the coming months. This outlook is supported by global supply disruptions across major producing regions including Chile, Peru, Congo, and Indonesia.

The structural supply constraints are compounded by extended mine development timelines, which have stretched to over 10.50 years on average. Additionally, declining copper grades and rising demand from electric vehicles, renewables, and AI data centers continue to support the price environment.

Ambitious Expansion Plans and Growth Projections

Hindustan Copper has set an ambitious target of achieving 12.20 million tonnes of ore capacity by FY31, representing nearly 3.50 times its current level. Jhonsa expressed confidence in this expansion plan, citing the benefits of underground mining that improves ore grades and a clear execution roadmap.

Strong Financial Growth Outlook

Anand Rathi Institutional has projected robust financial performance for the company over the FY25-FY31 period:

The EBITDA growth is expected to be aided by dollar-linked revenues and rupee-denominated costs. Notably, the company maintains a net cash-positive position, and the expansion capital expenditure is expected to be funded entirely through internal accruals without impacting deleveraging plans.

Price Sensitivity and Valuation Assessment

Jhonsa noted the company's sensitivity to copper price movements, with every $1.00 change in LME copper prices impacting revenue and EBITDA by approximately ₹45.00-55.00 lakh, assuming stable USD-INR exchange rates.

Despite the stock's re-rating, with current trading multiples of 15-17x EV/EBITDA, Jhonsa considers valuations reasonable. Given the absence of direct domestic peers, Hindustan Copper is compared to global miners, and the analyst believes the premium is justified by superior margins, return ratios, and its strategic position as India's only listed copper miner.

Long-term Growth Drivers Remain Intact

The long-term outlook remains positive, supported by fundamental demand drivers. Global copper demand is projected to rise from 25.00 million tonnes to 35.00 million tonnes, while India's per capita consumption is expected to grow significantly. The combination of improved ore grades and sustained volume growth underpins confidence in the stock's trajectory, according to Jhonsa.