Hindustan Copper Ltd Management Discussions

1. Industry Structure and Development

Copper, a malleable and ductile metallic element, is an excellent conductor of heat and electricity as well as corrosion resistant and antimicrobial. Copper occurs naturally in the Earths crust in a variety of forms. It can be found in sulfide deposits (as chalcopyrite, bornite, chalcocite, covellite), in carbonate deposits (as azurite and malachite), in silicate deposits (as chrysocolla and dioptase) and as pure "native" copper.

(Images: Chalcopyrite; Copper in electrical sector; Copper in electronics; Copper in Electric Vehicles; Copper in Solar plants; Copper in construction; Copper in transport; Copper in Wind Energy)

The global demand for copper continues to grow. World refined usage has more than tripled in the last 50 years, thanks to expanding sectors such as electrical & electronic products, building construction, industrial machinery & equipment, transportation equipment, consumer & general products.

Demand of copper is increasing due to progress of implementation of electric vehicle worldwide with associated charging infrastructure, decarbonization policy push by US and EU and more and more emphasis on green energy to mitigate climate change. The antimicrobial properties of copper are finding newer application in view of global pandemic situation. Copper being the green metal has been considered as a core driver for moving the global economy toward net zero emissions. Copper has been termed as new oil.

The global copper mine production and primary copper production remain flat during last three years and hence the secondary market for scrap copper will play an increasingly important role in meeting future growing demand.

Virtually all products made from copper can be recycled and recycled copper loses none of its physical and chemical properties. Copper recycling rates are significant with over a third of the worlds copper currently produced via secondary markets.

Global Business Scenario

World copper mine production increased by about 2.2% in January 2026. The concentrate production of 2% and solvent extraction-electrowinning (SX-EW) of 2.8%. World refined copper production grew by about 1% in January 2026 with primary production (electrolytic and electrowinning from ores) declining by 1.4% and secondary production (from scrap) increasing by 11%. World apparent refined copper usage rose by approx. 2.5% in January 2026. The world refined copper balance, indicated an apparent surplus of 17,000 tonne in January 2026 due to Chinese apparent usage (excluding changes in bonded/unreported stocks), indicating a preliminary surplus of about 17,000 tonne.

In 2026, world mine production growth has been revised down to 1.6% from the 2.3% as anticipated in October 2025 forecasts, mainly reflecting downward revisions made to the DRC, Chile and Indonesia growth. Output at Grasberg and Kamoa mines continues to be constrained as a result of the major incidents that occurred in 2025.

Global growth is mainly attributed to additional production from the ramp-up of Oyu Tolgoi (Mongolia) and Malmyz mine (Russia), the expansion at Julong (China) and Almalyk (Uzbekistan) mines, the processing of stockpile ore at Cobre Panama and an expected recovery from the previous years constrained output at several mines.

In 2026, world refined copper production is expected to rise by 0.4%. Although refined production will continue to benefit from new and ramp-up capacity, primary electrolytic refined production growth is expected to be limited by the constrained availability of concentrates, partially offsetting growth in SX-EW and secondary (from scrap) output.

Global refined usage growth for 2026 is now anticipated to be 1.6% (previously 2.1%). Chinese usage is expected to rise by approx. 1.9% and usage in the rest of the world is expected to rise by 1.3%.

World refined copper balance projections indicate a surplus of approx. 96,000 tonnes for 2026, which compares to the deficit of 150,000 tonnes forecast in October. This shift to surplus is attributed to lower than previously anticipated copper usage and higher secondary refined production.

Copper is essential for economic activity and for the modern technological society. Additionally, infrastructure developments in major countries and the global trend towards cleaner energy and electric cars will continue to support copper demand in the longer term.

Indian Copper Scenario

Compared with global markets, India has very limited copper ore reserve contributing about 0.31% of world copper reserves. Mining production is just 0.2% of worlds production, whereas refined copper production capacity is about 4% of worlds production.

HCL hold around two-fifth of the copper ore reserves and resources in India with an average grade 0.88%. As on 01.04.2025, HCL has reserves (proved & probable) of about 2.05 million tonnes in terms of copper metal and total resources (reserves and resource) of 6.75 million tonnes in terms of copper metal (i.e. 767.36 million tonnes of ore with average grade of 0.94% based on UNFC system).

Total copper ore resources in India is 1660.87 million tonnes of which 163.89 million tonnes constitute reserves, as on 01.04.2020 as per NMI database (As per Indian Minerals Year Book 2020).

Currently, three major players dominate the Indian copper industry i.e., Hindustan Copper Limited (HCL) in Public Sector (Annual Refining Capacity: 0.685 lakh tonnes) and Hindalco Industries Ltd. (Annual Refining Capacity: 5.00 Lakh tonnes), Vedanta Ltd. (Annual Refining Capacity: 2.16 Lakh tonnes), and Kutch Copper Ltd. in private sector. Currently total installed refined copper capacity in private sector (Annual Refining Capacity: 5.00 Lakh tonnes) in the country is 12.85 Lakh tonnes.

HCL is the only vertically integrated copper producer in the country which produces refined copper from its own mined ore, while Hindalco Industries Ltd at Dahej in Gujarat, Kutch Copper Ltd at Mundra in Gujarat and Vedanta Ltd at Tuticorin in Tamil Nadu have set up port-based smelting and refining plants. However, there are few installations to produce Electro-won copper but their capacities are still very low and production is inconsistent. There are several SMEs, MSMEs and unorganized sector working in the downstream and secondary recycling of copper in India.

In the fiscal year 2025-26, the copper ore production in India was 3.67 million tonnes. HCL has plans to increase its mining capacity from current level of around 4.0 million tons per annum to 12.2 million tons per annum through expansion of existing mines, reopening of closed mines and opening of new mines.

HCL carried out surface exploration drilling & underground definition drilling from 01.01.2025 to 31.12.2025 to the tune of 31368.80 meters and 16952.70 meters for enhancing copper ore reserve and resources within its mining leases. Above exploration work has been funded by HCL through its own resources.

Refined copper production in India during FY 2025-26 was approx. 7.04 Lakh tonnes (Vedanta - 1.70 Lakh tonnes, Hindalco - 4.22 Lakh tonnes and Kutch Copper - 1.12 Lakh tonnes), as compared to 5.73 Lakh tonnes in FY 2024-25.

II. SWOT Analysis

Strength

• Only Company mining copper ore in India.
• Fully developed infrastructure facilities
• Holding mine lease of more than 80% of countrys copper reserves
• Skilled and well-trained workforce
• Established brand value
• Wide distribution network and established customer base

Weakness

• Smaller size mine deposits except Malanjkhand
• Aged equipment & old technology for value addition
• Low process efficiency
• High cost of logistics due to multi location units
• Aged workforce
• No control on copper prices as it is volatile in nature.

Opportunity

• Growing copper demand within country
• Ready market for copper concentrate in India due to large smelting/refining capacity
• Scope for expansion of mine capacity
• Opportunity to explore new deposits

Threat

• Volatility in LME Copper price affecting turnover/profitability
• Increasing cost of inputs
• Attrition of skilled manpower
• Risk in existing non-profitable business
• Limited availability of competent underground Metal mining contractor/Outsourcing agency in India
• Product substitution driven by world copper prices

III. Segment-wise or product-wise performance

Covered in the main report.

IV. Outlook

Copper demand is expected to grow in tandem with growth in Indian economy. The growing demand from the power sector in view of Government laying thrust on renewable energy and increasing demand from the households for consumer durables will increase the demand for copper in India. Manufacturers of hybrid and electric vehicle (EV) will also augment the consumption of copper as EVs use four times more copper than traditional internal combustion engines.

The market for EV is rapidly changing as leading manufacturers debut new products, battery prices drop and Government incentives continue around the world. Copper is essential to EV technology and its supporting infrastructure. The evolving EV market will have a substantial impact on copper demand. The increase in the EV market will significantly impact copper demand. Copper demand is also expected to increase further in health sector due to its biocidal properties.

If Indias per capita copper consumption moves towards the per capita copper consumption levels in the rest of the world, Indias copper market has the potential for significant growth. The per capita copper consumption in India is expected to increase from the current level of 0.6 kg to 1 kg in coming years. The average per capita copper consumption of world is 3.2 kg.

The Indian demand is expected to be strong on the back of improved outlook for Industrial and infrastructure growth. The governments thrust on power sector, smart city, housing for all, ambitious plan of harnessing renewable energy resources, electric vehicles, Infrastructure development, Atma Nirbhar Abhiyan and Make in India spells good news for copper industries.

V. Risks and concerns

The Company has laid down risk management framework keeping the Companys objectives, growth strategy and process complexities arising out of its business operations. Risk management in HCL is a continuous process of identifying, assessing and managing all the opportunities, threats and risks faced by the Company to achieve its goals.

VI. Internal control systems and their adequacy

HCL has adequate internal control system and Internal audit is being carried out on half yearly basis in order to achieve operational effectiveness and efficiency, reliable financial reporting, and compliance with laws, regulations and policies.

VII. Discussion on financial performance with respect to operational performance

The financial performance for FY 2025-26 vis-?-vis FY 2024-25 is summarized below:

Particulars	2025-26 (? crore)	2024-25 (? crore)
Sales	3054.40	2048.11
Cost of production excluding depreciation, amortization and Finance Cost	1615.84	1333.29
Profit before depreciation, amortization and Finance Cost (EBITDA)	1533.83	816.00
Depreciation, Amortization	200.44	175.56
Finance Cost	4.91	6.93
Exceptional items	95.75	Nil
Profit Before Tax	1232.73	633.51
Provision for taxation — Current	342.42	146.52
Provision for taxation — Deferred	(30.36)	18.46
Profit After Tax	920.67	468.53

Capital Expenditure

During the FY 2025-26, the expenditure on account of Mine expansion, Capital Mine development, Replacements & Renewals (R&R) of Plant & Machinery and Green field Exploration stood at ?464.53 crore which was funded through internal accruals of the Company and no Government support for capital expenditure was asked for.

Contribution to Exchange

During FY 2025-26, the Company contributed a sum of ?784.71 crore to the exchequer by way of taxes and royalties, as against ?473.17 crore in 2024-25, as detailed below:

Particulars	2025-26 (? crore)	2024-25 (? crore)
Customs Duty	0.04	Nil
GST	249.23	124.34
Royalty and Cess	260.84	202.83
Income Tax	232.68	130.14
Others	41.91	15.85
Total	784.71	473.17

Note: The above figures are excluding TDS deposited by HCL.

VIII. Material developments in Human Resources/Industrial Relations front including number of people employed

(i) Manpower

As on 31.03.2026, the manpower of the Company was 1,154. Category-wise break-up is tabulated below:

Employee Group	Gen	SC	ST	OBC
A	26	3	7	8
B	24	1	2	0
C	235	80	74	152
D	103	87	6	0
Total	538	208	109	299

Employee Group

ALIGN=LEFT>D

Employee Group	ESM	PwD	LDP	Minorities
A	0	1	7	0
B	0	1	0	3
C	1	9	3	2
12	1	1	5
Total	13	28	47	84

Legends: Group A & B: Executives; Group C & D: Non-Executives; Gen: General (including Economically weaker section); SC: Scheduled Caste; ST: Scheduled Tribe; OBC: Other Backward Class; ESM: Ex-Servicemen; PwD: Persons with Disabilities; LDP: Land Displaced Person.

(ii) Employment of SC/ST/OBC Community and PwD candidates

The Company adheres to the prescribed Government guidelines on reservation for SC/ST/OBC/PwD categories in its recruitment activities. The representation of SC, ST, OBC and PwD employees in the total manpower of 1,154 as on 31.03.2026 was 18.02%, 9.45%, 25.91% and 2.43% respectively.

(iii) Employment of Women

The Group-wise strength of women employees as on 31.03.2026 vis-?-vis the total employee strength of the Company is given below:

Group	Total	Women	Women Employees as % of total Employee
A	48	6	4.89% (approx 9.87? — extracted)
B	6	6	4.06% (approx 6.06? — extracted)
C	5	4	1.38% (approx 3.88? — extracted)
D	6	1	1.97% (approx 9.67? — extracted)
Total	1,154	85	7.36%

Note: Some percentage figures in the source table appear garbled; totals are Total 1,154; Women 85; 7.36%.

(iv) Backlog reserved vacancies filled up during the year and remaining unfilled along with reasons

Grade	SC	ST	OBC	SC	ST	OBC	Reason
E-02	Nil	1	1	Nil	1*	Nil	—
E-01	Nil	1	1	Nil	Nil	Nil	—
Total	Nil	2	2	Nil	1**	Nil	—

• No application from candidate fulfilling eligibility criteria received.
  ** The post has been re-advertised vide HCL Recruitment advertisement dated 16.05.2026.

(v) Details of Liaison Office(s) for SC/ST, OBC, PwD, EWS and Ex-servicemen

Name of Officer	Designation	Appointed as Liaison Officer for	Email ID
Smt. Soma Guha Sikdar	Chief Manager (Electrical)-M&C	SC, ST	soma_s@hindustancopper.com
Shri Mukesh Kushal Choudhari	Chief Manager (CSR)	OBC / EWS / ESM	mukesh_kc@hindustancopper.com

(vi) Details of the Reservation Cell

Name of Officer	Designation	Appointed as Liaison Officer for	Email ID
Shri Himansu Kumar Sethi	Senior Manager (Finance)	SC Cell	himansu_ks@hindustancopper.com
Shri Suresh Rabidas	Peon	ST Cell	—
Shri Achin Shahil Kispotta	Manager (HR)	—	achin_sk@hindustancopper.com
Shri Umesh Das	Peon	—	—
Shri Mritunjay Kumar Dev	Chief Manager (CS)	OBC/EWS/ESM	mritunjay_kd@hindustancopper.com
Shri Subhash Chandra Mahato	Housekeeper-cum-bearer	—	—

(vii) Employee Relations

During FY 2025-26, the Employee Relations has continued to be harmonious and peaceful in all Units of the Company and there has been no reported instances of strikes or any other major unrest. The successful operation of various Bi-partite fora at the Apex, Unit and Shop-floor levels have contributed immensely towards smooth functioning of the Company. Following major employee welfare initiatives were taken during the year:

(a) Group Personal Accident (GPA) Insurance Policy for contractual persons has been introduced for the first time w.e.f. 2025 in HCL providing coverage of ?20 Lakh.
(b) Group Term Life Insurance (GTLI) Policy has been introduced for all permanent employees, offering coverage ranging from ?20 Lakh to ?60 Lakh.
(c) Various financial assistance schemes, including Multipurpose Advance, House Building Advance, and Motor Vehicle Advance, have been introduced.
(d) All regular and contractual employees of HCL have been onboarded under the Corporate Salary Package through multiple banks, including SBI and IOB, and are covered under a Group Personal Accident (GPA) Insurance Policy with coverage of up to ?1 Crore.

(viii) Human Resource Development

Training and Development, based on identified needs, was given due priority by the Company for all levels of employees to increase employee effectiveness, utilization and productivity as well as to usher in a culture of innovation and creativity with emphasis on deciphering problem-solving skills. During FY 2025-26, 2,779 mandays of training were achieved against a target of 2,548 mandays. The Company selectively nominated employees for specialized training Programmes / Workshops / Seminars / Conferences / Webinars organized by reputed professional organizations and Institutes.

(ix) Communal Harmony and National Integration

In the townships of the Company located at Khetri, Malanjkhand and Ghatsila as well as in other places of work, the employees of different caste, creed, region and religion live together in harmony and celebrate all religious festivals with pomp and gaiety.

(x) Status of implementation of Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013

The Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 has been implemented across all the Units / Office of the Company. The constituted Internal Committees at Units / Offices are amended in accordance with the provisions contained in the Act. The details of the Internal Committees across HCL have been put up in the Companys website for wider circulation and easy access. A provision in this regard has also been incorporated in the Conduct, Discipline and Appeal Rules of HCL. HCL has a Board approved Policy known as Hindustan Copper Ltd (Prevention, Prohibition and Redressal of Sexual Harassment of Women at Workplace) Policy and Rules, 2021. During the year, NIL complaint was received by the Internal Committee. She Box portal is also regularly monitored. Awareness sessions and workshops were held across the organization to build awareness amongst the employees. All employees have gone through the program namely "Prevention of Sexual Harassment of Women at Workplace" provided by the Institute of Secretariat Training and Management on iGoT platform under Mission Karmayogi.

(xi) Status of implementation of The Persons with Disability Act, 1995

The number of employees belonging to Persons with Disabilities (PwD) category employed in the Company as on 31.03.2026 was 17 (seventeen) in Group A, 1 (one) in Group B, 9 (nine) in Group C and 1 (one) in Group D, aggregating to 28 (twenty-eight). In recruitment matters, reservation for PwD was adhered to as per Government of India directives and duly incorporated in advertisement published, wherever applicable.

(xii) Apprenticeship Training

HCL imparted apprenticeship training to 276 persons in FY 2025-26 in various trades.

(xiii) Swachhata Hi Seva (SHS) Campaign 2024

Swachhata Pledge was administered to the employees of HCL Corporate Office in Kolkata on 17.09.2025 reaffirming the Companys commitment to cleanliness and sustainability. Swachhata Hi Seva (SHS) is being jointly organized by Ministry of Housing and Urban Affairs (MoHUA) and the Department of Drinking Water and Sanitation (DDWS), Ministry of Jal Shakti. The period from 17.09.2025 to 02.10.2025 is observed as Swachh Bharat Diwas. This years theme, Swachhotsav, aligns with the festive spirit of the period.

As part of Swachhata Hi Seva Campaign 2025, transformation of Cleanliness Target Unit (CTU) was one of the key focus area of SHS-2025. HCL, Corporate Office, Kolkata identified a neglected park in Park Circus Area, Ballygunge, Kolkata as a CTU and embarked on a mission of transforming the neglected park area and has restored and refurbished the park with the objective to enhance the lives of local residents. Post restoration, the park will be transformed by plantation drive and wall painting.

HCL organised SafaiMitra Surakha Shivir on 22.09.2025 as part of Swachhata Hi Sewa campaign 2025 for all employees including Sanitation workers and local beneficiaries in association with Peerless Hospital, Kolkata and Dr. Agarwals Health Care Limited. Tests like blood pressure checking, eye check-up, vision correction, random sugar test, ECG, pulmonary function test, bone medical test, height and weight measurement etc. were organized. More than 100 local beneficiaries availed benefit from this camp.

IX. (a) Key financial ratios and details of significant changes therein (i.e. change of 25% or more as compared to the immediately previous financial year) along with detailed explanations thereof:

Sr. No. Key Financial Ratio	FY 2025-26	FY 2024-25	Difference (%)	Reason for significant changes (i.e. change of 25% or more)
a) Current Ratio (Times) = Current Assets / Current Liabilities	1.68	1.37	22.63%	Not Applicable
b) Debt Equity Ratio (Times) = Total Borrowings / Net Worth	0.04	0.07	-42.86%	Due to repayment of borrowings during current financial year
c) Debt Service Coverage Ratio (DSCR) (Times) = EBITDA / (Interest + Installments)	20.08	13.36	50.30%	Due to increase in profit & decrease in current borrowings & interest
d) Return on Investment/Equity (%) = (PAT/Net worth) ? 100	29.36	19.10	53.72%	Due to increase in profit during current financial year
e) Inventory Turnover Ratio (Times) = Net sales / ((Opening inventory + Closing inventory)/2)	9.96	8.89	12.04%	Not Applicable
f) Trade Receivables Turnover Ratio (Times) = Net Sales / Average Receivables	20.11	13.33	50.86%	Due to decrease in Trade Receivables & Increase in Sales during current Financial Year
g) Trade Payables Turnover Ratio (Times) = Annual Credit Purchase / Average Trade Payables	2.00	2.00	Nil	Not Applicable
h) Net Profit Ratio Margin (%) = (PAT/Net Sales) ? 100	30.14	22.88	31.73%	Due to increase in Profit & Sales during current financial year
i) Return on Capital employed (%) = (EBIT / Capital Employed) ? 100	43.63	28.54	52.87%	Due to increase in Profit during current financial year
j) Operating Profit Margin (%) = (EBIT - Other Income) / Net Sales ? 100	38.17	27.45	39.05%	Due to increase in profit during current financial year
k) Interest Coverage Ratio (Times) = EBIT / Interest	252.32	92.44	172.96%	Due to increase in Profit & decrease in Interest during current financial year

IX. (b) Key financial ratios of Consolidated Financial Statements (CFS)

Sr. No. Key Financial Ratio	FY 2025-26	FY 2024-25
a) EBITDA as Percentage of Total Income (%) = (EBITDA/Total Income ? 100)	48.70	37.93
b) Return on Net Worth (%) = (PAT/Average Net Worth ? 100)	32.92	20.57
c) Asset Turnover Ratio (%) = (Total Income/Total Assets ? 100)	71.33	61.36

PAT = Profit After Tax; EBIT = Earning Before Interest & Tax; EBITDA = Earning before Interest, Tax, Depreciation & Amortisation; Net Worth = Equity (+) Other Equity (including Share Premium Account) (-) Capital Reserve (-) Accumulated Losses.

X. Details of any change in Return on Net Worth as compared to the immediately previous financial year along with a detailed explanation thereof.

Return on Net Worth for FY 2025-26 is 29.36% as against 19.10% for FY 2024-25. The increase in Return is due to increase in profit during current financial year.