Hindustan Copper Ltd (HCPR.NS): Initiate at Sell: Valuations Testing their Mettle

We initiate on HCL with a Sell and TP of Rs365. Our thesis rests on: (1) Neutral copper outlook: weak consumption, escalation in US-Iran tensions, rate hike worries; (2) Valuations: HCL is likely pricing in spot LME and 100% success in ramp-up plans, taking its EV/EBITDA to 12x FY28E vs. peers' 5-7x, and EV/t to US$110k for FY28E (global replacement cost US$30-40k). That said, HCL - a 60% Indian govt-owned company - looks well-placed to deliver vol growth with plans to expand mining from 4mt to 12mt by FY30. Its Kendadih and Rakha mines are resuming production after two decades of closures. HCL's leases are valid until 2040-43, and it is a net-cash company. We have assumed LME at US$14,500; every US$1,000 change would impact EBITDA 10% and fair value by Rs40. A 1% vol change would impact EBITDA 1.2%. Coal India is our top sector pick. FY26-31E rev CAGR ~28%, EBITDA CAGR ~32%, EBITDA margin 55-57%. TP: 8x FY31E EV/EBITDA discounted to FY28E;