Hindustan Copper Limited — Q1 FY26 earnings call

Call held 18 Sep 2025

Management summary

Hindustan Copper is pivoting towards a massive scale-up, aiming to triple its ore production capacity to 12.2 MTPA by 2030-31. While current operations are facing seasonal headwinds from heavy monsoons (impacting targets by 10-15%), management is confident in a strong H2 recovery. The strategy relies heavily on the Mine Developer cum Operator (MDO) model for new Jharkhand assets to mitigate capital risk and leverage private sector efficiency.

Highlights

  • Targeting aggressive capacity expansion to 12.2 million tonnes (MT) of ore by FY31, up from current levels.

  • Expected Metal in Concentrate (MIC) production for FY26 is ~30,000 tonnes, a 20% increase over last year's 25,000 tonnes.

  • Malanjkhand cost of production is approximately $5,000 per tonne, while Khetri stands at ~$6,000 per tonne.

  • Planned HCL Capex of ₹2,000 crore over the next 5 years, primarily for Malanjkhand and Khetri augmentation.

  • Rakha mine to be operated via MDO model with Southwest Mining (JSW), involving a ₹2,700 crore investment by the partner.

  • Current production running at 85-90% of targets due to significant monsoon-related seepage and operational hurdles.

  • Signed a historic G2G agreement with Codelco (Chile) for technical knowledge transfer and global best practices.

Concerns

  • Monsoon and Rainfall Seepage

Key financials

  1. MIC Production (Target) 30,000 tonnes +20%YoY
  2. Cost of Production (Malanjkhand) 5,000 $
  3. Cost of Production (Khetri) 6,000 $
  4. Employee Cost (Annual) ₹300 Cr

What they filed

Q1 FY27: revenue up 81.4%, net profit up 163.4% against the same quarter last year.

₹ Cr · quarterly
Line itemQ2 FY25Q3 FY25Q4 FY25Q1 FY26Q2 FY26Q3 FY26Q4 FY26Q1 FY27
Revenue518 328 731 516 718 +39%687 +109%1,156 +58%936 +81%
EBITDA152 108 267 212 282 +86%340 +215%628 +135%508 +140%
Net profit102 63 191 134 186 +82%156 +148%444 +132%353 +163%
How to read this

₹ crore, as filed. The percentage beside a figure is the change against the same quarter a year earlier — never the quarter before, which would make every seasonal business look like it collapses and booms each year.

Segment breakdown

  • Malanjkhand (MP)
    2.73 million tons Current Ore Production2.9 million tons FY26 Target
  • Khetri & Kolihan (Rajasthan)
    2.9 million tons Combined Ore Target
  • Jharkhand Area
    0.3 million tons Surda Target0.4 million tons Kendadih Target

Guidance & targets

Volume

  • Total Ore Production Capacity Volume · by 2030-31 · High confidence 12.2 million tons
    So, this is of Khetri, 2.9, 5 million tons from Malanjkhand and 4.30 from Jharkhand Area. So, this is, if you sum up, it comes to 12.2 million tons. These are our expansion plans.

    — Sanjiv Kumar Singh, CMD

  • MIC Production Volume · at 12 million tons ore capacity · Medium confidence 80,000 to 90,000 tons
    If the grade is low 90000- 95000, it will be 80,000 to 90,000 tons. Yes, yes. 80,000 to 90,000 tons, MIC will be made.

    — Sanjiv Kumar Singh, CMD

Capex

  • HCL Internal Capex Capex · next 5 years · Medium confidence ₹2,000 crore
    2,000 crore CAPEX... majority of the CAPEX will go to Malanjkhand.

    — Sanjiv Kumar Singh, CMD

Revenue

  • Estimated Revenue Revenue · by 2031 · Low confidence ₹4,000-10,000 crores
    at the current time, we are assuming that we are estimating a revenue of 4,000-10,000 crores. ED (Finance): Absolutely. Absolutely, sir.

    — Analyst/Management (Confirmed by ED Finance)

Risks & concerns

  • Monsoon and Rainfall Seepage

    high

    Heavy rains since May have caused significant seepage in underground mines, requiring heavy pumping and reducing production to 85-90% of targets.

    Management acknowledged

  • Geo-mining Conditions (Dikes)

    medium

    Malanjkhand has frequent 'dikes' (unconformities) that can stop work for days/weeks and increase bypass costs.

    Management acknowledged

  • Import Dependency for Critical Equipment

    medium

    Winders and shaft equipment are not made in India; reliance on European manufacturers and tender success is a timeline risk.

    Management acknowledged

Areas of evasion (2)

  • Specific reasons for previous tender failures were brushed off as 'xyz reasons'.
  • Future employee cost projections were avoided as a 'million dollar question'.

Q&A highlights

3 direct
Rationale for MDO (Mine Developer cum Operator) model Direct
When this MDO was conceived 4 years ago... we had incurred a loss of 503 crores. And we were having a loan of more than 1700 crores. At that time, we did not have that capital... the biggest advantage of going into MDO mode is that MDO brings more operational efficiencies than us.

Explains the shift from departmental mining to private partnerships to manage high debt and capital constraints.

Shaft development and equipment delays Direct
Actually, winders are not made in India. It is all imported. Mostly European countries manufacture it. We did the tender last year, but we could not get success because of some xyz reasons... After the tender is awarded, it will take 30-32 months to furnish the shafts.

Highlights a critical bottleneck in the Malanjkhand expansion; the 30-32 month lead time for imported equipment is a major project risk.

Grade variability and 'Definition Drilling' Direct
When you go down, touch the seam, and when you do definition drilling... then you can get the exact information. It can be on the higher side also... The chances of negative are less, because you have made it from Borehole data.

Management suggests potential for positive grade surprises once they move from surface borehole data to actual underground seam drilling.

2 min read 5 chapters

Detailed narrative

The 12.2 MTPA Roadmap

Hindustan Copper has laid out a definitive plan to reach 12.2 million tonnes of ore production by FY31. This involves doubling Malanjkhand to 5 MTPA and significantly reviving Jharkhand assets to 4.3 MTPA. The Khetri and Kolihan mines in Rajasthan are expected to contribute 2.9 MTPA. Management emphasized that while these are long-term targets, the 'zero date' for several projects like Rakha starts now following recent clearances.

Operational Headwinds: The Monsoon Impact

Current production is trailing targets at 85-90% due to an early and heavy monsoon starting in May. Underground mines are experiencing high water seepage, necessitating heavy pumping and ventilation which diverts resources from production. Management expects to make up for these losses in the third and fourth quarters as the monsoon recedes and 'development' activities transition into 'production' phases.

Strategic Shift to MDO Model

The company is increasingly utilizing the Mine Developer cum Operator (MDO) model, specifically for the Rakha mine in Jharkhand. Partnering with Southwest Mining (a JSW company), HCL avoids a ₹2,700 crore capex burden while securing a revenue share. This model was born out of a period of high debt (₹1,700 crore) and losses, allowing HCL to transfer operational and capital risk to more efficient private players.

Cost Efficiency and Global Benchmarking

HCL reports a competitive cost of production at $5,000 per tonne for Malanjkhand, which is transitioning from opencast to underground. Khetri, a pure underground play, is slightly higher at $6,000 per tonne. Management noted that while underground mining is inherently more expensive than opencast, their costs remain globally competitive. They are also leveraging a new G2G agreement with Codelco to adopt world-class mining practices to further optimize these costs.

Critical Infrastructure: The Shaft Bottleneck

A key component of the Malanjkhand expansion is the equipping of four major shafts. While the shafts are already sunk, the company is struggling to source specialized winders and ropes, which must be imported from Europe. Previous tender attempts failed, but a new widened tender is expected within a month. Once awarded, furnishing these shafts will take approximately 30-32 months, representing a significant lead-time for the next phase of volume growth.

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