Will multibagger stock Hindustan Copper deliver a show-stopping performance in 2022?
Premium- After nearly 8 years of consolidation, Hindustan Copper shares made a strong upmove in 2021, said Ventura Securities
After nearly 8 years of consolidation, Hindustan Copper shares made a strong upmove in 2021. The stock has given multibagger return of over 100% this year (year-to-date). It appears that the multibagger stock might continue to enjoy the spotlight in 2022 as well, thanks to improving fundamentals and strong tailwinds for the copper sector, expects Ventura Securities.
EVs consume 3-4 times more copper as compared to Internal Combustion Engine (ICE) vehicles. Globally, EV and energy transition have been the largest demand drivers in the medium to long term. Moreover, copper is also used in the EV infrastructure.
“Hindustan Copper has access to 40% of India’s copper reserves. The company has been working on a massive two-phased expansion plan at a tentative capex of ₹5,500 crore. In phase-1, it’s been ramping up its capacity to 12.2 Million Tonnes Per Annum (MTPA) of copper ore from the existing 3.97 MTPA. And phase-2 has a target of reaching the mining output of 20.2 MMTPA," the brokerage highlighted.
Recently, ICRA upgraded Hindustan Copper’s Long Term rating to and reaffirmed the short term rating. The rating agency estimated that Hindustan Copper might generate healthy cash flows in future on the back of firm copper prices, on-going expansion and quality copper mines under its control.
Further, the reasons it has cited for the upgrade are also crucial. The agency estimated that Hindustan Copper might generate healthy cash flows in future on the back of firm copper prices, on-going expansion and quality copper mines under its control.
Will Hindustan Copper deliver a show-stopping performance? That will largely depend on copper prices, the progress of capacity ramp ups, improvement in profits and the developments on the strategic stake sales front, said Ventura Securities in its not.
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The views and recommendations made above are those of individual analysts or broking companies, and not of Mint.
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