Hindustan Copper’s profit jumped 179% in the September quarter as copper prices soared. Revenue rose 64%, but costs rose just 8%, so most of the extra money fell straight to profit. The shares rallied 7%. The catch is that copper prices are already retreating.
Hindustan Copper reported standalone net profit of ₹520 crore for the September quarter, up 179% from ₹186 crore a year earlier and up 47% from ₹353 crore in the June quarter. Revenue from operations rose 64% to ₹1,175 crore, from ₹718 crore. Profit before tax rose 180% to ₹695 crore.
The shares rose as much as 7% in early trade on Thursday.
Total expenses rose just 8% to about ₹520 crore, while revenue jumped 64%.
Over the year, Hindustan Copper added about ₹457 crore of revenue and about ₹334 crore of net profit. That means about 73 paise of every additional rupee went straight to the bottom line (our calculation).
A copper miner’s costs, such as mining the ore, running the plants and paying staff, don’t change much from quarter to quarter. Its revenue, though, moves with the global copper price. When prices jump, almost all of the increase becomes profit.
And copper prices did jump. The Iran war, supply disruptions and surging demand from power grids, electric vehicles and data centres pushed prices to very high levels. Copper averaged around $14,532 a tonne in October.
For the first half of the year, Hindustan Copper’s net profit rose 172% to ₹872 crore, from ₹320 crore. Its first-half EBITDA was ₹1,268 crore, an operating margin of about 60%. In just six months, the company has earned about 95% of its entire profit for the last financial year, ₹921 crore (our calculation).
A unique position
Hindustan Copper holds all the operating copper mining leases in India, with mines at Malanjkhand in Madhya Pradesh, Khetri in Rajasthan and Ghatsila in Jharkhand. It mainly sells copper concentrate, the partly processed ore, rather than finished copper.
That makes it something of a pure play on copper prices. Unlike Hindalco, which has diversified into rolled products and other businesses, Hindustan Copper’s earnings rise and fall almost directly with the metal.
What could change
The risk is high copper prices. Copper prices retreated in November, as hopes of a US-Iran settlement eased fears about supply and energy costs. If prices keep falling, the same leverage that tripled profits will work in reverse.
However, long-term demand for copper looks strong, driven by electrification, renewable energy and AI data centres, which require large amounts of copper wiring. And Hindustan Copper is expanding mine production, so higher volumes could offset some of any price decline.
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