Helping You Build Wealth With Honest Research
Since 1996. Try Now

MEMBER'S LOGINX

     
Invalid Username / Password
   
     
   
     
 
Invalid Captcha
   
 
 
 
(Please do not use this option on a public machine)
 
     
 
 
 
  Sign Up | Forgot Password?  

Why Hindustan Copper Share Price is Rising

Apr 1, 2024

Why Hindustan Copper Share Price is Rising

The new financial year has begun and how.

Both benchmark indices hit their all-time high today in intraday trading on the back of a firm trend in the Gift Nifty index and optimism in other Asian indices.

The rally in frontline indices in the last few sessions suggest that markets have now recovered from the recent correction triggered by the market regulator's caution on the 'froth' in small and mid-cap stocks.

Riding this wave were metal stocks which experienced a significant surge. Among these stocks was Hindustan Copper. Shares of the company jumped more than 11% today.

The stock has also been in an upswing over the last month.

Let's find out why.

Economic Revival in China Boosts Prospects

Shares of Hindustan Copper rose 11% today following encouraging economic data from China indicating a rebound in the manufacturing sector, potentially driving up demand for metals.

China's manufacturing activity showed growth for the first time in six months, marking the fastest pace in 13 months. The manufacturing purchasing managers index climbed to 50.8 in March from 49.1 in February, interpreted by experts as a sign of stabilization in the world's second-largest economy.

Other metal stocks also witnessed a notable upswing, with the Nifty metal index surging by 3.4% to reach a new high. Among its constituents, Hindustan Copper, Welspun Corp, and Vedanta emerged as the top gainers, with increases of 8% and more.

Copper Prices Hit 11 - Month High

Shares of the company also rose earlier this month after copper prices rose sharply as investors bet on a drop in global supply.

The company is poised to benefit from the surge in global copper prices as it is the only company mining copper ore in India with fully developed infrastructure facilities. The company holds mining lease for more than 80% of the country's copper reserves.

Copper prices surged to their highest level in 11 months, climbing by 3.1%, following a meeting in Beijing where officials from at least 15 Chinese plants discussed potential measures, including the possibility of production cuts.

Chinese smelters, facing a crisis due to the significant drop in treatment and refining charges, are considering potential output cuts as they heavily rely on imported raw materials.

Additionally, copper has benefited from expectations that the Federal Reserve might conclude its cycle of interest rate hikes, with traders anticipating a shift towards monetary easing possibly as early as June.

This rally in copper prices, which began in mid-February, has brought an end to a period of stagnant trading.

Going forward, the spike in demand from the power sector in view of the government's thrust on renewable energy and the increasing demand from households for consumer durables will increase the demand for copper in India.

Manufacturers of hybrid and electric vehicles (EVs) will also augment the consumption of copper, as EVs use four times more copper than traditional internal combustion engines.

The projected demand for copper due to EVs is expected to increase by around 1.7 million tonnes by 2027. Copper demand is also expected to increase further in the health sector due to its biocidal properties.

How Hindustan Copper Share Price has Performed Recently

In the past month, shares of the company have gained 12.4%.

The stock has gained 90% in the past six months and around 208% in the year gone by.

The stock touched its 52-week high of Rs 312 on 1 April 2024 and a 52-week low of Rs 96.95 on 5 April 2023.

chart

At the current price, the company trades at a price to earnings multiple of 88.6x and price to book value multiple of 13.8x.

About Hindustan Copper

Hindustan Copper is a government-owned corporation in the central public sector enterprise under the Ministry of Mines (India).

HCL is the only vertically integrated copper producer in India engaged in a wide spectrum of activities ranging from mining, beneficiation, smelting, refining, and continuous cast rod manufacturing.

The firm holds a lease on more than 80% of the country's copper reserves. It has well developed infrastructure facilities, vertically integrated operations, a wide distribution network and an established customer base.

To know more, check out Hindustan Copper financial factsheet and its latest quarterly results.

You can also compare the company with its peers.

Hindustan Copper vs Vedanta

Hindustan Copper vs Hindustan Zinc

To know what's moving the Indian stock markets today, check out the most recent share market updates here.

Investment in securities market are subject to market risks. Read all the related documents carefully before investing

Safe Stocks to Ride India's Lithium Megatrend

Lithium is the new oil. It is the key component of electric batteries.

There is a huge demand for electric batteries coming from the EV industry, large data centres, telecom companies, railways, power grid companies, and many other places.

So, in the coming years and decades, we could possibly see a sharp rally in the stocks of electric battery making companies.

If you're an investor, then you simply cannot ignore this opportunity.

Click Here for Full Details

Details of our SEBI Research Analyst registration are mentioned on our website - www.equitymaster.com

Disclaimer: This article is for information purposes only. It is not a stock recommendation and should not be treated as such. Learn more about our recommendation services here...

Ayesha Shetty

Ayesha Shetty is a financial writer with the StockSelect team at Equitymaster. An engineer by qualification, she uses her analytical skills to decode the latest developments in financial markets. This reflects in her well-researched and insightful articles. When she is not busy separating financial fact from fiction, she can be found reading about new trends in technology and international politics.

Equitymaster requests your view! Post a comment on "Why Hindustan Copper Share Price is Rising". Click here!

1 Responses to "Why Hindustan Copper Share Price is Rising"

Ali

Apr 3, 2024

Very informative and useful article. Thank you!

Like 
  
Equitymaster requests your view! Post a comment on "Why Hindustan Copper Share Price is Rising". Click here!