With surge in shipments to the US in anticipation of a tariff decision, the global inventory at LME and SHFE has squeezed further. The upswing in prices has more to do with trade dislocations and demand tug-of-war between the USA and China. Since mid of May-26, global copper traders have been consistently withdrawing copper inventories from South Korea, Taiwan and Singapore LME warehouses, which led to drawdown of ~47% of inventory, providing support to global prices. Copper stock outside of the USA has been consistently depleting with the current inventory at ~52% (lowest since Jan-26). Though there are limited mine disruption in H1CY26, several global miners have reduced their CY26 yearly guidance exacerbated by the DRC’s blanket export ban on raw copper concentrates, Indonesia’s Gresik smelter outage and Chile repeatedly trimming its copper output forecast, this is expected to provide a support the global prices thus keeping them elevated. As MCP carries a blanket grade of 0.85%, KCC 0.81% and ICC at 0.65% (which is consistently improving), we have kept our FY27/28e MIC estimates unchanged at 35,429/42,751 tonne vs. the management’s guidance of ~32,000tonne in FY27. Further in-line with recent surge in LME, we have revised FY27 metal estimate by 1.6% and forex by 0.4/1.4% in FY27/28e, which has led to improvement in our estimates. Driven by strong operational visibility and macro tailwinds, we maintain a BUY rating on HCP with a DCF-based TP of Rs715.

Best-ever Q1 performance: Revenue rose 81.4% y/y to Rs9.37bn (beating our estimate of Rs8.55bn) along with ore production of 0.968m tonne. EBITDA jumped 139.4% y/y to Rs5.1bn (higher than our estimate) with EBITDA margin of 54.2%. The improvement was a function of multiple drivers i.e., ~39.5% y/y improvement in blended quarterly copper prices, ~10.6% y/y INR depreciation, lower TC/RC, and volume/grade improvement.

Multi decade ‘life of mine’: With the existing leases renewed along with potential revival of Pathargora (Jharkhand) and Dikchu (Sikkim) copper blocks, the company has adequate production runway beyond 12.2m tonne. This is contrary to global copper situation with four of the fifteen largest copper mines having no operating plan beyond CY40. Further, grade depletion, UG operations become more complex and power constraints are impacting the performance of global miners. HCP’s cash cost at ~$2.8/lb is similar to several copper miners i.e., China Gold International ($2.74/lb), Sociedad Minera El Brocal ($2.92/lb), Atalaya ($2.4/lb), Ivanhoe ($2.2/lb) and Glencore ($2.77/lb).

Outlook and Valuation: With several global copper miners trading at or close to their 10-year multiple peaks, the global majors i.e., First Quantum Minerals, Ivanhoe and Southern Copper stand out with sector-leading forward EV/EBITDA multiple of 14.6/13/14.4x.  With copper fundamentals being one of the strongest in non-ferrous metals, we remain confident on HCP’s future growth prospects and maintain BUY rating with DCF-based TP of Rs715. Key Risks: (a) Reduction in commodity prices; (b) Inventory outflow from USA; (c) delay in mining capex.