At a Glance
Hindustan Copper Ltd is India’s only integrated copper producer, and possibly the only PSU that’s seen a 300% stock rally purely on the back of copper prices, China stimulus, and government disinvestment rumours. But don’t let the shiny numbers fool you — this PSU still trades at 9x book, and dilution might be coming faster than you think.
🧠 1. TL;DR – PSU but With Commodity FOMO
- 🧱 Monopoly: Only PSU in copper mining → refining → casting
- 📈 Stock Price: ₹63 (June 2020) → ₹253 (June 2025) = 4x in 5 years
- 💥 PAT FY25: ₹469 Cr (highest ever)
- 🧾 OPM: 36% | RoCE: 24% | RoE: 19%
- 🏦 Debt: Reduced from ₹1,564 Cr (FY20) → ₹167 Cr (FY25)
- 📦 Book Value: ₹27.6 vs CMP ₹253 = P/B ~9.17x 🤯
- 🔧 Key Managerial Personnel: CMD – Arun Kumar Shukla, CFO – Sanjiv Kumar Singh
- 🛠️ Capex-heavy: ₹766 Cr in CWIP
🔄 2. Business Model – Dig, Melt, Repeat
- India’s ONLY integrated copper PSU
- Covers everything from:
- Mining (Khetri, Malanjkhand, etc.)
- Smelting & Refining (ICC Ghatsila)
- Fabrication of copper products
Products
- Copper Cathodes
- Copper Wire Rods
- Precious metals by-products
📉 Commodity business = High cyclicality
📈 But copper’s ESG tailwinds (EVs, renewables, power infra) give it legs
📊 3. Financials – Cyclical, But Now Finally Clicked
| Metric | FY21 | FY22 | FY23 | FY24 | FY25 |
|---|---|---|---|---|---|
| Revenue (₹ Cr) | 1,787 | 1,822 | 1,677 | 1,717 | 2,071 |
| Net Profit (₹ Cr) | 110 | 374 | 295 | 295 | 469 |
| EPS (₹) | 1.19 | 3.87 | 3.05 | 3.05 | 4.85 |
| ROE (%) | 6% | 18% | 18% | 18% | 19% |
| Dividend Payout (%) | 29% | 30% | 30% | 30% | 0% 😬 |
📦 Debt: Just ₹167 Cr (down 90% from FY20)
📈 FY25 OPM: 36% – near historical peak
⚠️ No dividend in FY25 despite record profit – could hint at capital raising?
🧾 4. What’s Working (and What’s Not)
✅ Positives
- 🚜 Strong cash flows: ₹544 Cr in FY25 from ops
- 🔁 Debt almost fully repaid
- 📈 Strong operating leverage from volume expansion
- 🌏 Copper demand structurally bullish (EV infra, solar, green energy)
- 🧑🏫 JV with RITES for critical mineral exploration
❌ Risks & Red Flags
- 💸 PSU dilution risk always looms (GoI still owns 66.14%)
- 📉 Sales CAGR (3Y): 4% – slower than profit growth
- 😬 ROE still under 20% despite commodity boom
- 🧾 High P/E (52x TTM) & P/B (9x) → valuation already rich
- ❌ Dividend payout skipped this year – why?
📈 5. Shareholding – PSU Ownership Drama Incoming?
| Shareholder | Mar 2022 | Mar 2025 |
|---|---|---|
| Promoter (GoI) | 66.14% | 66.14% |
| FIIs | 0.67% → 3.27% ✅ | |
| DIIs | 15.6% → 8.6% ❌ | |
| Public | 17.6% → 22.0% ✅ | |
| Shareholders | 3.5L → 6.4L+ |
📉 Retail frenzy continues
🧠 FII interest slowly rising
⚠️ DII exit + no recent OFS = PSU privatization story yet to play out
🔍 6. Fair Value Estimate – Shiny but Slippery
Let’s build the range:
Base Case FY26E
- EPS Estimate: ₹5
- Reasonable P/E for commodity PSU: 20–25x
- 🧮 FV Range = ₹100–₹125
Bull Case (Copper rally continues, higher margins)
- EPS: ₹6.5
- P/E: 25–30x
- 🎯 FV Range = ₹160–₹195
📌 EduInvesting FV Range (12–18M): ₹100–₹195
Current Price = ₹253 → Already above upper bound.
So yes, technically, it’s in “greater fool territory.”
🧨 7. Final Word – Multibagger or Meltdown Ahead?
Hindustan Copper is everything we love and fear in a PSU:
✅ Monopoly in copper
✅ Debt-free, record profits
✅ EV/green narrative
But also:
❌ Overvalued by every metric
❌ PSU uncertainties (board, disinvestment, sudden OFS)
❌ Low payout despite rising profits
📉 It’s not priced like a PSU — it’s priced like a junior copper explorer in Canada with a gold teaser.
✍️ Written by Prashant | 📅 June 18, 2025
Tags: Hindustan Copper, PSU Stocks, Copper Mining India, Green Energy Metals, EV Metals, Disinvestment, Commodity Rally, Metal Stocks Multibagger
