Hindustan Copper Profit Jumps 148% in Q3, Dividend Set

Introduction

State-owned Hindustan Copper Ltd (HCL) announced a robust financial performance for the third quarter of the financial year 2025-26, reporting a 148% year-on-year surge in its consolidated net profit. The Miniratna public sector undertaking (PSU) also declared an interim dividend for its shareholders. Despite the strong earnings report, the company's stock closed lower on Thursday, reflecting a mixed market sentiment that may be weighing broader concerns against the stellar quarterly numbers.

Stellar Quarterly Performance

Hindustan Copper's consolidated net profit for the quarter ending December 31, 2025, stood at ₹156.23 crore. This represents a significant 148.5% increase from the ₹62.87 crore profit reported in the same period of the previous financial year. The impressive bottom-line growth was driven by a substantial rise in revenue. The company's net consolidated revenue from operations more than doubled, climbing 109.7% to ₹687.34 crore in Q3 FY26 from ₹327.77 crore in Q3 FY25. This performance highlights strong operational efficiency and favourable market conditions for copper during the period.

Sequential Performance Moderates

While the year-on-year figures were impressive, the company's performance showed a slight moderation on a sequential basis. Compared to the second quarter of FY26 (July-September 2025), the net profit of ₹156.23 crore was down by approximately 16% from the ₹186 crore reported in Q2. Similarly, revenue from operations saw a 4% sequential decline from ₹718 crore in the preceding quarter. This moderation suggests some variability in market dynamics or operational factors between the two quarters.

Shareholder Rewards: Interim Dividend

In a positive move for investors, the Board of Directors of Hindustan Copper approved an interim dividend of ₹1 per equity share. This translates to a 20% dividend on the face value of ₹5 per share for the financial year 2025-26. The company has fixed Friday, February 13, 2026, as the record date to determine the eligibility of shareholders for this payout. The dividend payment will be made through electronic mode on or before Friday, March 6, 2026.

Financial Highlights Q3 FY26 vs Q3 FY25

Operational Costs and One-Offs

The company's expenses grew during the quarter, rising approximately 90% year-on-year to ₹493 crore from ₹259 crore. A notable one-time item in the financial statements was a provision of ₹95.75 crore for a newly introduced Post-Retirement Medical Scheme (PRMS), based on an actuarial valuation. This provision impacted the overall profitability but reflects a long-term commitment to employee welfare.

Market Reaction and Stock Movement

Despite the strong profit announcement, Hindustan Copper's shares ended the trading day 1% lower at ₹607.3 per share on the BSE on Thursday, February 5, 2026. The stock experienced some volatility during the day, reaching an intraday high of ₹619 and a low of ₹579. The company's market capitalisation stood at ₹58,727.37 crore at the close of trade. Over the past year, the stock has seen significant movement, touching a 52-week high of ₹759.20 on January 29, 2026, and a 52-week low of ₹183.9 on April 7, 2025. The stock has gained around 16% year-to-date and about 82% in the last three months.

Auditor's Red Flags: Governance Concerns

A critical aspect highlighted in the company's filings relates to corporate governance. Auditors pointed out significant compliance issues, noting that the company has been without any Independent Directors since November 3, 2024, and has lacked a Woman Director since June 22, 2025. This non-compliance with the Companies Act, 2013, has prevented the formation of a valid Audit Committee, a cornerstone of corporate oversight. Such governance lapses are a major red flag for investors and could attract regulatory scrutiny.

Analysis and Outlook

Hindustan Copper's Q3 results clearly demonstrate strong underlying demand and favourable pricing for copper. The company, being India's only vertically integrated copper producer, is well-positioned to benefit from the country's focus on infrastructure and manufacturing. However, the robust financial performance is overshadowed by serious governance concerns. The absence of an independent board oversight mechanism raises questions about accountability and long-term strategic decision-making. Investors will be closely watching for steps taken by the government to rectify the board composition. While the company's expansion plans to triple its production capacity are promising, resolving these compliance issues is crucial for maintaining investor confidence and ensuring sustainable growth.

Conclusion

Hindustan Copper has delivered a blockbuster quarter with a 148% surge in net profit and a healthy dividend for shareholders. The performance underscores its strong market position. However, the significant governance gaps, particularly the lack of independent directors and a functional audit committee, pose a considerable risk. The future trajectory of the company and its stock will depend not only on sustaining its operational momentum but also on its ability to swiftly address these critical compliance and governance shortcomings.