No material impact from Iran war on Hind Copper, may rally 23%: Anand Rathi

Brokerage firm Anand Rathi Shares & Stock Brokers has maintained its ‘Buy’ rating on state-owned copper mining company Hindustan Copper, stating that the company remains largely insulated from global chemical supply disruptions due to US-Iran war as it sources most chemicals domestically for captive use.

 

"Sodium Isopropyl Xanthate, Somfroth and Flocculants are largely procured locally, which limits direct exposure to global trade flows," the brokerage said.

 

However, geopolitical tensions may raise freight costs due to higher crude prices, which could affect margins as power, fuel and water account for about 7 per cent of revenue.

 

The brokerage noted that Hindustan Copper received a composite licence (CL) in January 2026 for the Baghwari-Khirkhori block, which could support volume expansion beyond FY31. It added that mining at Kendadih started in January 2026, while output at Kolihan is expected to pick up between Q4FY26 and Q1FY27.

 

 

Factoring in delayed ramp-up in mining volumes and potential headwinds from rising freight costs, Anand Rathi has trimmed its Ebitda estimates by 8.7 per cent, 5.2 per cent and 5 per cent for FY26, FY27 and FY28, respectively.

 

The brokerage has set a DCF-based target price of ₹650, implying a potential upside of 23 per cent from Thursday, March 12, closing price of ₹527 on the NSE. 

 

Around 02:30 PM, shares of Hindustan Copper were trading at ₹499, down 28.5 per cent. The stock touched an intraday low of ₹493.55 on the NSE. In comparison, the benchmark NSE Nifty 50 was quoting at 23,220 levels, down by 419 points or 1.77 per cent. 

Here's why Anand Rathi is positive on Hindustan Copper:

Operational ramp-up to remain gradual

According to Anand Rathi, while ore production may increase about 5 per cent year-on-year in FY26E, it could still fall short of guidance due to delays in the start of production at the Kendadih mine and the expected ramp-up at the Kolihan mine only from Q4FY26-Q1FY27.

 

It further said that extended monsoons leading to higher moisture content in MIC and temporary labour shortages during the festive period could further impact output volumes in FY26E.

Impact of global conlict on copper prices

According to analysts, copper prices have historically weakened during geopolitical disruptions in the Gulf peninsula and broader Asia region. In five of eight major disruptive events, prices declined by an average 6.4 per cent within six months before recovering in the following year.

 

"From macro perspective, while the Middle East accounts for only 2 per cent of global mined copper production, escalation of tensions could lead to short-term volatility in commodity markets. Considering evolving macro environment, we believe the prices may remain under pressure in the near-term," the brokerage said in its note. It has trimmed its copper price estimates by 3.1 per cent for FY27/28E.  The brokerage highlighted key risks for Hindustan Copper Limited, including volatility in metal prices, delay in mine capex, and undue delay in volume expansion. 

Disclaimer: Views and outlook shared belong to the brokerage/analysts and are not endorsed by Business Standard. Readers' discretion is advised.