Hindustan Copper Q4 Results: PSU Margin Near 40% Thanks to Lower Costs, Shares Trade at Over 100x EPS

A sharp decline in costs led to an increase in Hindustan Copper Ltd’s earnings before interest, taxes, depreciation and amortization (EBITDA) margin. by over 600 basis points year-on-year to reach 39.95% in the March quarter.

Hindustan Copper’s other expenses decreased 4% year-on-year, while personnel costs as well as electricity and fuel costs decreased 21% year-on-year.

However, the lower costs were not reflected in the company’s financial results as these too declined by 6% to ₹124.8 crore from ₹132.2 crore during the same period last year. This was driven by a 62% year-on-year decline in Hindustan Copper’s other revenues during the quarter.

Among other metrics, Hindustan Copper’s revenue remained stable at ₹565 crore, while EBITDA grew 21% to ₹225.7 crore.

As of March 2024, the government held a 66.14% stake in the company, while LIC held a 6.88% stake. Foreign institutions hold a 3.13% stake, while Quant Mutual Fund holds a 2.38% stake in the company.

Hindustan Copper’s margins could further increase from current levels of 40%, with global copper prices rising sharply. Prices surpassed $11,000 per tonne last week and an analyst report predicts prices could rise to $40,000 per tonne in the coming years.

Shares of Hindustan Copper ended 0.9 per cent lower on Friday at ₹371. The stock is up 37% so far in 2024 and has more than tripled over the past 12 months, up 247%.

At current price, Hindustan Copper shares are trading at 120 times FY2024 earnings per share (EPS) of ₹3.05.