There is a major technological upgrade unfolding across the world and a massive new under current reshaping our lives. One of the biggest sectors people are excited about for the new year 2022 is the expected boom in Electric Vehicles or EVs. Based on Electric Vehicle demand around the world, batteries are going to be the power that literally should be in focus.
One of the best way to play the Electric Vehicle boom is by investing in battery technology and energy storage. More specifically, investing in metals and other minerals that go into EVs and other renewable energy technology. Analysts tracking the sector around the world recommended copper to their clients as the demand for the metal would surge on the back of demand for EV batteries. The metal seems cheap, and this means that many shares of copper mining companies such as Hindustan Copper Ltd are available at bargain levels. Sectors like electric vehicles, infrastructure, railways, renewable energy technologies and energy storage all require massive quantities of the specific metal to work the magic! Improving batteries and energy storage technology is the biggest potential game changer for investors wanting to play the EV theme. No wonder, EV is just a big battery on wheels. Electric Vehicles contain approximately FOUR times more copper than conventional cars as per the data supported below: Conventional Cars–23kg/Battery Electric Vehicles–83 kg; Hybrid Electric Bus–89 kg/ Plug-in Hybrid Electric Vehicles–60 kg; Electric Bus–224 -369 kg/Hybrid Electric Vehicles–40 kg.
Investors looking at a contra play in these times of volatility in the stock market can look at investing in Hindustan Copper Ltd. It is a MiniRatna Category 1 CPSE and the sole vertical integrated producer of refined copper in the country.
The company has access to about 2/5 th. of India’s copper ore reserves and resources . It is currently implementing Phase 1 project by increasing its capacity from 3.97 MTPA to 12.2 MTPA backed by exponential demand. Copper consumption is set to increase at a frantic pace on the back of demand from copper consuming industries such as defence, railways, electric vehicles, infrastructure, housing and renewable energy sectors. The PSU company posted a seven fold increase in its net profit at Rs 68 crore during the Q2FY22 compared to Rs 9.20 crore in the corresponding quarter of the previous year. Revenue from operations during the July-September 2021 period increased to Rs 464 crore as compared to Rs 294 crore in the year ago period. The management has also projected excellent growth prospects for the company in the coming quarters on the back of higher demand and expansion plans. The Hindustan Copper stock currently quoting at Rs 130 can be accumulated by investors for solid gains in their portfolio.
Rajiv Kapoor is a share broker, certified mutual fund expert and MDRT insurance agent.