Hindustan Petroleum Corporation Ltd (HPCL) delivered a consolidated net profit of ₹3,625 crore for Q2 FY27, representing a 6% year-on-year decline from ₹3,859 crore in the corresponding quarter of the previous financial year. However, this performance recovered significantly from a net loss of ₹12,264.67 crore in Q1 FY27, demonstrating remarkable sequential improvement. The company's revenue from operations rose 26% YoY to ₹1.39 lakh crore compared with ₹1.10 lakh crore in Q2 FY26, substantially outperforming estimates. Motilal Oswal maintained a 'Buy' recommendation on the stock, with the brokerage noting that shares have delivered multibagger returns of 105% in three years and jumped 56% in five years. The company currently has a market capitalisation of more than ₹72,516 crore.
HPCL achieved record high gross refining margins (GRM) of $32.15 per barrel during Q2FY27, a significant improvement from $8.80 per barrel in Q2 FY26. The company processed 6.20 million metric tonnes (MMT) of crude oil during the quarter, operating at 100% of their combined capacity. The Visakh Refinery processed 3.60 MMT at 95% capacity utilisation, while the Mumbai Refinery processed 2.60 MMT at 109% of capacity. HPCL's total sales volume, including exports, increased 5.5% YoY to 12.73 MMT during the quarter, with domestic sales growing 4.9%. Combined sales of petrol and diesel rose 10% YoY to 7.78 MMT, while total LPG sales stood at 2.03 MMT and pipeline throughput was 6.99 MMT.
The quarter was significantly impacted by average global Brent crude prices rising nearly 40% year-on-year due to prolonged geopolitical tensions including the Iran war and Russia-Ukraine conflict. This dramatic price increase dragged down marketing margins of oil marketing companies (OMCs) as the cost of supplying fuel exceeded revenue from selling it. Analysts at Elara Capital expected retail diesel margins for OMCs to be at negative ₹24 per litre against ₹5 in the year-ago quarter, while gasoline margins were pegged at negative ₹2 per litre against ₹9 last year. Despite these challenges, HPCL benefited from inventory gains from lower-cost crude inventories, where a refiner records gains when market crude oil prices rise above the company's purchase price. For the first half of FY27, the company reported a loss of ₹8,639.45 crore, compared with a profit of ₹7,970 crore in April-September FY26, due to crude oil prices surpassing $100 per barrel due to the West Asia war.
HPCL incurred capital expenditure of ₹2,085 crore in Q2FY27, taking cumulative capex for H1FY27 to ₹3,819 crore. The investments were directed towards strengthening refining and marketing infrastructure and improving operational efficiency. During the quarter, HPCL mechanically completed the 201-km LPG pipeline from Haldia to Panagarh in West Bengal, which is currently in the pre-commissioning stage. The company's capital expenditure focus aligns with its strategy to enhance refining capabilities and operational efficiency across its integrated oil marketing and refining operations.
