Is a copper supply crisis imminent? Will it turn bullish and rally like silver, which surged by over 150% in the calendar year 2025?
Although copper is the most abundant metal found in the Earth’s crust and has unlimited recyclability, it could face a structural supply gap. According to the Economic Survey report for 2026, in 2022–23, provisional domestic production stood at 3.33 million tonnes. This figure rose to 3.78 million tonnes in 2023–24 but then dipped to 3.56 million tonnes in 2024–25.
The same trend is seen in copper concentrate production. In 2022–23, provisional production was 112,745 tonnes. It surged to 125,230 tonnes in the next financial year, but in 2024–25, production fell to 105,012 tonnes.
Why is Supply the Concern?
From wires and motors to wind turbines, electric vehicles, and data-centre cooling, copper is required everywhere. The Survey points to two technical pressures.
First, average ore grades are significantly low and are constantly falling. Many operating mines now work at copper yields of about 0.4–0.6%. This means that to get a single tonne of copper, miners have to move and process hundreds of tonnes of rock.
The Survey illustrates this concern with the example of a 1 GW wind turbine, which needs around 2,866 tonnes of copper. This implies that at a 0.6% yield, miners process about 477,667 tonnes of copper-bearing material and, if waste rock and overburden are included, the actual material moved can rise to 1–2 million tonnes.
Another reason is the surge in demand, especially from Artificial Intelligence (AI) infrastructure and the energy transition.
Take AI for example. The sector needs copper for power cables, switchgear, transformers, cooling systems and other power-delivery hardware that keeps GPUs and servers running.
As per the report, copper showed one of the sharpest price recoveries among key metals in 2025. On the metal price index, it saw a 32% rise on a year-on-year basis.
Stocks to Benefit from Demand Supply Constraints
As supply tightens and prices stay firm, investors should keep a close watch on the following two stocks to benefit from sustained demand:
Hindustan Copper Ltd (HCL)
Incorporated in 1967, Hindustan Copper, a ‘Miniratna’ Category -1 CPSE company, operates under the Ministry of Mines. The company is involved in underground copper mining, anode furnace operations, anode casting, refinery work, cathode pulling, copper cathode production, melting furnace operations, and CC wire rod manufacturing. The company has five plants across five different states.
HCL has access to around 45% of India’s copper ore reserves and resources. To be more precise, its reserves stood at 156.97 million tonnes with an average grade of 1.31%.
As of November 2025, the company has a copper mining capacity of around 4 MMTPA and is planning to expand it to 12.2 MMTPA in the coming years.
To boost its operations, Hindustan Copper has recently started mining operations at the Kendadih Copper Mine in Ghatshila, Jharkhand.
Regarding financials, in the December quarter of FY26, Hindustan Copper posted total revenue of ₹687 crore, marking a 109.5% increase on a year-on-year basis. However, on a quarterly basis, revenue saw a dip of ₹31 crore.
In terms of net profit, Q3 FY26 figures stood at ₹156 crore, reflecting a 149% surge on a yearly basis. However, sequentially, profit declined by ₹30 crore.
The company cited a one-time expense of ₹96 crore related to the Post-Retirement Medical Scheme (PRMS) as the key reason behind the sequential decline in margins and profitability.
What’s interesting about Hindustan Copper’s financials is that the company is almost debt-free and has maintained a healthy dividend payout ratio of 30.1%.
Hindustan Copper Ltd. 5-Year Financial Performance
| Particulars | FY21 | FY22 | FY23 | FY24 | FY25 |
| Sales (₹ in crores) | 1,787 | 1,822 | 1,677 | 1,717 | 2,071 |
| Operating Profit (₹ in crores) | 411 | 512 | 492 | 547 | 738 |
| Net Profit (₹ in crores) | 110 | 374 | 295 | 295 | 469 |
| EPS (₹) | 1.19 | 3.87 | 3.05 | 3.05 | 4.85 |
Considering the potential of Hindustan Copper, foreign institutional investors increased their holdings to 6.6% in the December quarter of FY26, up from 5.05% sequentially.
In contrast, when it comes to domestic institutional investors, while others have maintained their holdings, LIC has reduced its stake by 0.6%.
Regarding returns, over the span of six months, Hindustan Copper’s share price surged by 143.8%. However, recently the company has been witnessing muted price performance despite healthy Q3 results. Over the past month, returns stood at 7.9%, but over the past week, returns fell to 0.7%, and on February 13, 2026, the stock price declined by 5.29%.
Hindalco Industries Ltd
Established in 1958, Hindalco Industries is the flagship metals company of the Aditya Birla Group. The company operates in 10 countries, with manufacturing plants across 48 locations. Its business is categorised into aluminium, copper, and specialised alumina.
In copper, it is engaged in the manufacturing of rods, cathodes, precious metals, inner grooved tubes, recycling, wire rods, and alloy rods. Hindalco’s products are mainly used for wiring, railway electrification, and the manufacture of automobiles, electric vehicles, and various consumer durables.
In Q3 FY26, Hindalco posted revenue of ₹66,521 crore, while in the same quarter of the previous financial year, revenue stood at ₹58,390 crore. Sequentially, the company saw an increase of about 0.70%. Of the total revenue in Q3FY26, copper revenue stood at Rs 18,233 crore, a 33% increase year-on-year. The total copper shipments for the period saw an year-on-year increase of 8% to 122 kilo tonnes.
However, net profit for the December quarter, which stood at ₹2,049 crore, declined by 56.7% on a quarterly basis and 45.14% on a year-on-year basis. But why is there a dip in net profit despite strong revenue?
The Novelis Factor: Why a US Fire Dented Indian Profits
Hindalco incurred a ₹2,610 crore exceptional cost due to a fire at Novelis’ Oswego plant in New York. This raised input costs and caused operational disruptions in the US business, impacting margins and overshadowing record profits from Indian operations.
The company also reported an increase in consolidated net debt in Q3FY26 compared to the same period in the previous financial year.
Following the fire incident, brokerage firms have mixed opinions. While Nuvama maintained a ‘Hold’ rating on Hindalco, JM Financial has given a ‘Buy’ rating to the stock.
Hindalco Industries Ltd. 5-Year Financial Performance
| Particulars | FY21 | FY22 | FY23 | FY24 | FY25 |
| Sales (₹ in crores) | 1,32,008 | 1,95,059 | 2,23,202 | 2,15,962 | 2,38,496 |
| Operating Profit (₹ in crores) | 17,559 | 28,347 | 22,666 | 23,872 | 31,805 |
| Net Profit (₹ in crores) | 3,483 | 13,730 | 10,097 | 10,155 | 16,002 |
| EPS (₹) | 15.50 | 61.10 | 44.93 | 45.19 | 71.20 |
Hindalco’s share price surged by 29.7% over the last six months, but, like Hindustan Copper, it also failed to meet investors’ expectations. In the past one month, Hindalco shares fell by 3.40%, and on February 13, 2026, the company saw a significant intraday decline of 5.74%.
Why Are Copper Stocks Falling Despite Supply Concerns?
There are multiple reasons behind the stock price decline. After the sharp rally in late 2025, investors are turning to profit booking.
Another reason is China, which is also the world’s biggest copper consumer. Due to the surge in metal prices, China is seeing suppressed demand.
Also, China’s smelting business itself is showing shifting economics. Smelters have been earning unusual profits from by-products like sulphuric acid, rather than from traditional refining margins. That makes current profits more vulnerable to sudden swings in unrelated commodity markets, like fertiliser feedstocks or energy, raising the chance that metal production or margins could swing the other way, a risk parameter that investors are now pricing in.
Last but not least, copper inventories have increased in both on- and off-exchange markets, which reduces fears of an immediate shortage.
Hindustan Copper vs. Hindalco Industries vs. Others
| Company | P/E | Dividend Yield (%) | ROCE (%) |
| Hindustan Copper | 85.76 | 0.3 | 23.6 |
| Hindalco Industries | 11.75 | 0.6 | 14.8 |
| Vedanta | 23.97 | 6.5 | 25.3 |
| Bhagyanagar India | 14.01 | 0.0 | 8.3 |
| Madhav Copper | 56.3 | 0.0 | 21.8 |
Based on the comparison, Hindustan Copper trades at an exceptionally high P/E, suggesting steep investor expectations despite its modest dividend yield. Although the company has a strong ROCE, its valuation premium raises concerns about sustainability. In contrast, Hindalco appears far more reasonably priced, with moderate returns and a slightly better yield, making it a balanced option for value-oriented investors.
Vedanta, with its healthy ROCE and the highest dividend yield, positions itself as the most reasonably priced option. Bhagyanagar India offers affordability but lags in profitability. Madhav Copper shows strong operational efficiency but trades at a steep P/E without dividend support, reflecting growth expectations but limited immediate returns.
Investors’ Takeaways
Copper’s long-term story remains strong, driven by electrification, renewables, EVs and AI infrastructure. Falling ore grades and uneven domestic production suggest supply may stay tight over time. However, the recent correction in copper stocks shows that prices move in cycles, not straight lines.
For Indian investors, the key is discipline. Avoid chasing stocks after sharp rallies, especially those trading at very high valuations. Companies like Hindustan Copper Ltd already factor in strong growth expectations, leaving limited margin for error. In contrast, diversified players such as Hindalco Industries Ltd offer copper exposure with relatively balanced valuations.
Copper may be a structural theme, but stock selection and entry price will decide your returns. It may be a wise decision to add these stocks to your watchlist and keep a track on how they perform as the situation evolves.
Disclaimer:
Note: We have relied on data from www.Screener.in throughout this article. Only in cases where the data was not available, have we used an alternate, but widely used and accepted source of information.
The purpose of this article is only to share interesting charts, data points and thought-provoking opinions. It is NOT a recommendation. If you wish to consider an investment, you are strongly advised to consult your advisor. This article is strictly for educative purposes only.
Rishabh Sinha is a seasoned financial content creator with over 10 years of experience in BFSI domain. His portfolio spans over 20 of India’s most trusted financial brands. Rishabh brings depth, structure, and a reader-first approach to every piece he crafts.
Disclosure: The writer and his dependents do not hold the stocks discussed in this article.
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