HPCL Q2 net profit falls 9% to Rs 3,483 cr; H1 swings to Rs 8,044-cr loss

New Delhi: Hindustan Petroleum Corporation Limited (HPCL) posted a standalone net profit of Rs 3,483 crore for the July-September quarter, down 9.1 percent from Rs 3,830 crore a year earlier. The quarter brought the company back into profit after a net loss of Rs 11,526 crore in April-June. That first-quarter loss on account of the West Asia crisis left HPCL with a standalone net loss of Rs 8,044 crore for the first half of FY2027, against a net profit of Rs 8,201 crore in the same period last year.

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In a statement, HPCL said on Thursday the results reflected “resilient and robust performance by the Refineries and the Marketing divisions of the company in the midst of the ongoing West Asia crisis.” A note to the results said that profitability during April-September was impacted by suppressed marketing margins on certain petroleum products.

Q2 pre-tax profit up 32%, but tax charge higher

HPCL’s standalone profit before tax for the quarter rose 32.2 percent year-on-year to Rs 6,768 crore, from Rs 5,119 crore. Net profit still fell because the tax charge rose more steeply. Tax expense climbed to Rs 3,285 crore from Rs 1,288 crore a year earlier. All of it was deferred tax, and the company booked no current tax for the quarter, according to the results. In April-June, HPCL had recorded a pre-tax loss of Rs 17,446 crore along with a deferred tax credit of Rs 5,920 crore.

Revenue from operations rose 26.1 percent year-on-year to Rs 1,39,140 crore in the quarter, from Rs 1,10,323 crore. That was 4.1 percent lower than the Rs 1,45,126 crore recorded in April-June. For the half year, revenue from operations rose 23.3 percent to Rs 2,84,267 crore from Rs 2,30,458 crore.

Borrowing costs rose faster than revenue. Finance costs climbed 58.6 percent year-on-year to Rs 1,207 crore in the quarter, compared with Rs 761 crore a year earlier and Rs 765 crore in April-June. Depreciation and amortisation rose 18.6 percent to Rs 1,847 crore, while other income increased to Rs 747 crore from Rs 546 crore.

According to HPCL’s investor handout, standalone earnings before interest, tax, depreciation and amortisation (EBITDA) were Rs 9,822 crore for the quarter. For the half year, EBITDA was a negative Rs 5,038 crore. The company booked a foreign exchange loss of Rs 299 crore in the quarter and Rs 314 crore in the half year.

The standalone net profit margin narrowed to 2.50 percent in the quarter from 3.47 percent a year earlier. The operating margin improved to 5.19 percent from 4.83 percent. Earnings per share were Rs 16.37 for the quarter, against Rs 18.00 a year earlier. For the half year, HPCL posted a loss per share of Rs 37.80, compared with earnings of Rs 38.54 per share in the same period last year.

Consolidated Q2 profit down 6%

On a consolidated basis, HPCL’s net profit fell 6.1 percent year-on-year to Rs 3,625 crore in the quarter, from Rs 3,859 crore. The company had posted a consolidated net loss of Rs 12,265 crore in April-June. For the first half, the consolidated result swung to a net loss of Rs 8,639 crore from a net profit of Rs 7,970 crore a year earlier.

Consolidated revenue from operations rose 26 percent year-on-year to Rs 1,39,114 crore in the quarter. It was 4.2 percent lower than the Rs 1,45,225 crore recorded in April-June. For the half year, consolidated revenue rose 23.3 percent to Rs 2,84,339 crore.

HPCL’s share of profit from joint ventures and associates rose to Rs 473 crore in the quarter, from Rs 193 crore a year earlier and Rs 29 crore in April-June. For the half year it stood at Rs 502 crore, against Rs 82 crore. Consolidated earnings per share were Rs 17.04 for the quarter, compared with Rs 18.14 a year earlier.

GRM at USD 32.15 a barrel as crude throughput dips

HPCL’s average gross refining margin (GRM) rose to USD 32.15 a barrel in the quarter, from USD 8.80 a year earlier. For April-September, it averaged USD 27.89 a barrel, against USD 5.95. According to the results, these margins were calculated before the impact of the special additional excise duty and the road and infrastructure cess on exports of select petroleum products.

The refineries processed less crude than a year earlier. Crude throughput fell 5.6 percent year-on-year to 6.20 million metric tonnes (MMT) in the quarter, from 6.57 MMT, and was 4.9 percent lower than the 6.52 MMT processed in April-June. Capacity utilisation for the quarter was 100.4 percent, according to the investor handout. The Visakh refinery processed 3.60 MMT at 95 percent of its capacity, while the Mumbai refinery processed 2.60 MMT at 109 percent, the statement said.

For the half year, throughput fell 3.9 percent to 12.72 MMT from 13.23 MMT, with capacity utilisation at 103.6 percent. Distillate yield in the quarter was 75.3 percent. High-sulphur crude made up 72.3 percent of the total crude processed.

LPG negative buffer rises to Rs 18,049 cr

Under an arrangement conveyed by the Ministry of Petroleum and Natural Gas in April 2020, oil marketing companies hold the difference in a separate buffer account when the market-determined price of liquefied petroleum gas (LPG) cylinders falls below the effective cost to consumers. HPCL does not recognise revenue or a receivable against this negative buffer in the absence of a government compensation scheme, according to the results.

The company’s cumulative unrecognised negative buffer stood at Rs 18,048.82 crore on September 30. It had been Rs 12,798.67 crore on March 31 and Rs 14,240.64 crore on September 30, 2025.

The ministry had conveyed compensation of Rs 7,920 crore to HPCL in October 2025. The compensation covered under-recoveries on domestic LPG up to March 31, 2025 and those likely to be incurred up to March 31, 2026. It was to be disbursed in 12 equal monthly instalments. HPCL recognised six instalments totalling Rs 3,960 crore in April-September and included them under sale of products, the results said.

Debt up 38% since March; operating cash flow negative

HPCL’s standalone outstanding debt stood at Rs 65,458 crore on September 30, up 37.5 percent from Rs 47,599 crore on March 31. It had, however, come down from Rs 72,597 crore at the end of June. Short-term borrowings accounted for the rise since March, more than doubling to Rs 35,928 crore from Rs 15,353 crore. The debt-equity ratio rose to 1.38 from 0.80 in March, though it was lower than 1.52 in June.

Net worth fell 20.8 percent over the six months to Rs 47,388 crore, from Rs 59,847 crore on March 31. On a consolidated basis, outstanding debt was Rs 68,855 crore on September 30, against Rs 50,899 crore in March and Rs 75,914 crore in June. Consolidated net worth stood at Rs 52,688 crore, down from Rs 65,556 crore in March.

The company used Rs 7,832 crore in its operating activities in April-September, against Rs 19,100 crore of cash generated from operations a year earlier, according to its cash flow statement. Inventories rose to Rs 45,354 crore from Rs 39,409 crore in March. During the half year, HPCL raised a net Rs 18,928 crore through short-term borrowings.

Dividend

HPCL paid dividends of Rs 4,089 crore during April-September, up from Rs 2,233 crore a year earlier, according to its cash flow statement. The board did not declare an interim dividend on Thursday.

Petrol and diesel sales up 10% in Q2

Total sales, including exports, rose 5.5 percent year-on-year to 12.73 MMT in the quarter. Domestic sales grew 4.9 percent to 11.71 MMT, although they were lower than the 12.24 MMT sold in April-June. Exports rose to 1.02 MMT from 0.91 MMT a year earlier.

Combined sales of petrol and diesel rose 10 percent to 7.78 MMT, with petrol at 2.75 MMT and diesel at 5.03 MMT. LPG sales stood at 2.03 MMT. Pipeline throughput rose 14.2 percent to 6.99 MMT from 6.12 MMT.

For the half year, total sales rose 2.9 percent to 25.85 MMT and domestic sales grew 2.3 percent to 23.95 MMT. Combined petrol and diesel sales rose 9 percent to 16.55 MMT, and LPG sales were 3.76 MMT. Pipeline throughput rose 7.9 percent to 13.83 MMT from 12.82 MMT.

Capex, projects and network

HPCL’s capital expenditure was Rs 2,085 crore in the quarter and Rs 3,819 crore in the half year, the statement said. CRISIL Ratings upgraded the long-term credit rating of HPCL Rajasthan Refinery Limited (HRRL), a joint venture, to AA+ from AA with a stable outlook. HRRL’s debt arrangement of Rs 51,970 crore was refinanced or repriced with lenders at a lower cost, according to the statement.

During the quarter, the company mechanically completed its 201-km LPG pipeline from Haldia to Panagarh in West Bengal, which is now in the pre-commissioning stage. It also commissioned an open access fuel farm at Bhogapuram airport and began refuelling operations there. At the Visakh refinery, HPCL commissioned what it described as India’s first refinery blue hydrogen unit. The unit is based on the company’s patented Higas technology and HP Novel Amine.

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As of September 30, HPCL had 25,245 retail outlets, 6,394 LPG distributors and 77,984 piped natural gas connections, according to the statement. Its network also included 2,296 compressed natural gas outlets and 5,880 electric vehicle charging stations, and 24,172 of its outlets were solarised.

The company launched HP Navya, a 10 kg composite LPG cylinder, and partnered with Swiggy Instamart to sell through quick commerce. It released 36,000 new connections up to September. Accruals under its EBITDA improvement programme, Project Samriddhi 2.0, were Rs 327 crore, or USD 0.18 a barrel, in the half year.

Its subsidiary HPCL Renewable & Green Energy Limited secured consent to establish for nine compressed biogas projects from state pollution control boards. The subsidiary also won awards for four municipal solid waste-based projects from urban local bodies in Punjab and Bihar. It received Central Electricity Authority approval for its 70 MWp Gaaliveedu solar project.

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