A Hindustan Petroleum tanker delivers fuel to a petrol pump in central Mumbai, India. (Photographer: Santosh Verma/Bloomberg News)

Q1 Results: HPCL’s Profit Beats Estimates On Higher Inventory Gains

Hindustan Petroleum Corporation Ltd.’s profit for the quarter ended June beat analyst estimates on inventory gains. But it declined sequentially.

Net profit fell 1.6 percent from the preceding quarter to Rs 1,719.2 crore in the April-June period, the ONGC subsidiary said in its exchange filing. That’s higher than the Rs 1,444-crore consensus estimate of analysts tracked by Bloomberg. The company’s inventory gains during the reporting quarter grew 12.1 times at Rs 1,905 crore.

Revenue rose 11.2 percent quarter-on-quarter to Rs 67,629 crore in the three months to June. But it fell short of the Rs 70,987-crore estimated.

Earnings from interest, tax, depreciation and amortisation rose 9.2 percent from the previous quarter to Rs 3,191 crore. Operating margin, however, contracted to 4.7 percent from 4.8 percent in the March quarter.

The company earned $7.15 for every barrel of crude processed into fuel compared with $7.07 a barrel earned in the preceding quarter. The Singapore gross refining margin—the Asian benchmark—averaged around $6 a barrel. The company issued one bonus equity share for every two equity shares held in the company, in July.

HPCL’s Visakh Refinery modernisation and Mumbai refinery expansion plans are progressing according to schedule, said Chairman and Managing Director MK Surana. The company entered into a contract with Iran to import 1 million tonne of crude oil this financial year. Of this, it has imported 0.43 million tonnes, he said.

HPCL also plans to invest over Rs 8,400 crore in various projects, including refineries, petrochemicals, pipelines and natural gas, in the ongoing fiscal, Surana said.

The company’s stock today closed 2.15 percent lower at Rs 282.4 apiece ahead of the earnings announcement.