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New Delhi: Hindustan Petroleum Corporation Ltd (HPCL) has revised its leverage guidance, aiming to bring its debt-to-equity ratio below 1 by the end of FY26, after sharp reduction in borrowings in the first half of the year. “As on March 31, 2025, we had Rs 63,323 crore of debt at a debt-to-equity ratio of 1.38 percent. On September 30, 2025, the total debt has reduced to Rs 55,808 crore with a debt-equity of 1.07 percent,” CMD Vikas Kaushal said during HPCL’s Q2 FY26 investors’ call recently.
He added that HPCL had earlier guided for a 1.1 ratio by March 2026 but is now confident of outperforming it. “We are revising our target to a sub-1 now in terms of debt-to-equity ratio by end of this year,” Kaushal told investors.
HPCL’s company-wide cost-optimisation initiative, Project Samriddhi, yielded Rs 823 crore in savings in the first half of FY26 — equivalent to around USD 0.5 per barrel.
“We had given a guidance of Rs 1,000 crore target as a cost takeout. At the H1 level, the accruals are Rs 823 crore, which translates roughly about USD 0.5 per barrel,” Kaushal said. Of this, “35 percent is recurring and 50 percent, which is Rs 522 crore, is one-time savings,” he added.
Director (Finance) Rajneesh Narang said the company expects to exceed the initial target and will extend the effort under Samriddhi 2.0 from April 2026.
Kaushal said HPCL’s Residue Upgradation Facility (RUF) at the Vizag refinery has completed pre-commissioning tests and will begin feed-in around November 24. “RUF is expected to go onstream in the next three or four weeks. It will take a few weeks to stabilise,” he said.
On the Barmer refinery and petrochemical complex, Kaushal confirmed that the overall project is “89 percent complete” and “the refinery is greater than 95 percent complete.” The company continues to target “crude-in this year”, subject to final testing.
Kaushal said HPCL had faced a chlorine contamination in one crude cargo that caused partial refinery shutdowns. “We did face an issue of chlorine contamination on one cargo… and it caused a bit of damage. The good news is we are almost through with that,” he said.
The company has not yet quantified the total loss but indicated part of it came from exporting contaminated naphtha at a discount. “We had no option but to export it at a discount, and that knocked us back by Rs 150-odd crore,” Kaushal said, adding that additional losses were being assessed and claims will be raised under crude supply agreements. “Overall, it’s manageable… we were able to contain it much better with a lot of proactive efforts by our team,” he noted.
HPCL reported an EBITDA of Rs 28,606 crore over the past four quarters and expects to reach — and eventually surpass — the Rs 40,000-crore annual run rate previously guided. “We are on track for that. This is not the endpoint. We will aspire to take it 50 percent and even beyond that,” Kaushal said.
He estimated HPCL generated roughly Rs 20,000 crore in cash over the past 12 months, supported by sustained earnings and steady fuel prices. “I can’t think of too many businesses in India generating that kind of cash in a 12-month period,” he told analysts.
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