New Delhi: State-run Hindustan Petroleum Corporation Limited’s (HPCL) standalone net profit dropped 94.3 percent in Q1 of FY25 year-on-year on account of weak Gross Refining Margin (GRM) and high prices of crude oil. The state-run Oil Marketing Company (OMC) reported a standalone net profit of Rs 355.80 crore in the June quarter of FY2024-25, which was 94.3 percent lower than Rs 6,203.90 crore recorded in the corresponding quarter last year. On quarter-on-quarter basis, the net profit plunged 87.5 percent.
The consolidated net profit of HPCL for the June quarter was Rs 633.94 crore, which was 91 percent lower than Rs 6,765.50 crore recorded in the year-ago period. On a quarter-on-quarter basis, the net profit declined 77 percent. This is even though the total income, both consolidated and standalone, was higher in Q1 of FY25 in comparison to Q1 of FY24. However, the cost of materials consumed was higher, which bloated the expenses for the PSU, leading to lower profits.
Resultantly, earnings per share dropped from 31.80 percent in Q1 of FY24 to 2.98% in Q1 FY25. According to the fine print of Budget 2024-25, nil allocation has been made for capital support to the three oil marketing companies (OMCs) in 2024-25 against Rs 30,000 crore that was provisioned in the 2023-24 budget.
“MoPNG, vide letter dated 30th April, 2020 had conveyed, inter alia, to Oil Marketing Companies (OMCs) that in case Market Determined Price (MDP) is less than the Effective Cost to Consumer (ECC), OMCs will retain the difference in a separate buffer account for future adjustment. The holding company has negative buffer of Rs 2,443.71 Crore as on 30th June, 2024 (31st March, 2024: Rs 98.70 Crore), and Nil Crore as on 30th June, 2023. In absence of authorisation from GOI, receivable and revenue to the extent of negative buffer has not been recognised,” said HPCL.
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