Copper Shining! Metal's record rally has boosted the fortunes of this PSU stock

One month into the new year, and copper is on a serious upmove. Prices on the London Metal Exchange (LME) jumped 42% in 2025, and have extended those gains at the start of the new year as well.

A big contributing factor is the weakness in the US Dollar. The dollar index is near four-year lows, which supports metal prices. Besides, electric vehicles, renewable energy and the entire green energy transition are copper hungry as well. AI and data centers require massive power infrastructure — grid expansion and even defence demand add to the pressure.

However, copper is not easy to produce. It takes an average of over 15 years from discovering a new mine to actual production. The past year also witnessed disruptions — a rock blast in Chile, underground flooding in Congo and a mine accident in Indonesia.

Globally, the mine capacity is around 28 million tonne (MT) but the production is already closer to 23 million tonne.

Boost To Hindustan Copper

All of this puts Hindustan Copper in focus. Its market capitalisation has crossed ₹70,000 crore on Thursday

as the stock was locked in a 20% upper circuit. It is the only listed pure copper player in India. The company has access to around 45% of India's copper ore reserves. Additionally, India's per capita copper consumption is much lower than global trends.

Hindustan Copper is planning to expand its mine capacity from around 4 MT to over 12 MT, with capital expenditure of around ₹2,000 crore earmarked over the next five to six years. The management has guided for volume growth of around 20% in financial year 2026 with margins above 40%, adding that the cost of production is roughly around $5,500 per tonne.

The company's net profit last year was under ₹500 crore. However, with higher copper prices, incremental price gains largely flow to profits as the cost of production is likely to remain stable. At the current copper levels, earnings could potentially scale to ₹2,000 crore to ₹3,000 crore.

Even at this level, the stock may not look cheap for a miner. But metal stocks move on momentum during strong cycles.

Now the question is whether the Government might consider value unlocking at these elevated levels? The government has a 66.14% stake in the Hindustan Copper at the end of the December quarter, along with Life Insurance Corporation of India (LIC), who also has a stake of around 4%.

Shares of Hindustan Copper ended 20% higher on Thursday at ₹760. The stock has more than doubled in value over the last two months and has been the most traded stock on the Nifty 500 over the last two sessions.

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