Overall, the stock has rallied an impressive 48.35% over just seven trading sessions.
This sharp upmove reflects growing investor interest in metal stocks, particularly those linked to copper, amid rising global prices and favourable macroeconomic factors.
The rally in Hindustan Copper comes against the backdrop of higher dollar-denominated contract prices, a weakening rupee, and a broader uptick in the metals space. The surge in volumes and price action suggests strong technical momentum, with the stock trading well above key indicators on both daily and weekly charts.
With copper prices continuing to gain strength globally, the sentiment around Hindustan Copper has turned decidedly bullish, but not without some cautionary signals.
Rising copper prices drive investor interest
Hindustan Copper, India’s only vertically integrated copper producer, has been one of the top beneficiaries of the recent spike in copper prices.
According to Dipan Mehta, Director at Elixir Equities, the copper market is currently in a “fantastic growth phase” thanks to rising industrial applications and global electrification trends. He noted that while copper prices tend to be volatile, the broader trend remains positive and bodes well for companies like Hindustan Copper.
Higher realisations from dollar-linked contracts and a depreciating rupee further boost the company’s margin outlook. Mehta pointed out that metal companies, including Hindustan Copper, naturally benefit from these currency movements, as many of their sales are tied to dollar-denominated prices. This has helped improve the overall earnings environment for the firm, leading to higher investor confidence.
Valuations and growth outlook
Despite the optimism, some experts remain cautious about valuations. Mehta noted that Hindustan Copper appears expensive even by metals sector standards and emphasised that volatility in copper prices could impact the company’s earnings. He also expressed concern over the lack of visibility on volume or capacity expansion, which could limit the company’s longer-term growth potential.
Nonetheless, with copper demand expected to remain strong due to global electrification, renewable energy deployment, and infrastructure buildout, Hindustan Copper remains well-positioned to benefit from structural tailwinds.
What should investors do with Hindustan Copper shares now?
While the medium-term outlook for copper remains strong, analysts advise caution in the near term.
Sachin Gupta, VP-Research at Choice Broking, highlighted that Hindustan Copper has surged over 45% during December alone. The Relative Strength Index (RSI) is currently at elevated levels and is showing signs of negative divergence, which could indicate that the stock is overbought and may see some profit booking.
He suggested a “buy on dips” approach for investors looking to enter afresh. The stock has a strong support level near Rs 450, while resistance is seen around Rs 500. Any pullback towards the support zone could offer a better entry point, according to Gupta.
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(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of The Economic Times.)
