HPCL shares jump despite 90% slump in Q1 net profit

The stock jumped 1.4% to ₹386.5 apiece on the NSE in the early trade as analysts expect potential upside on back of strong physical performance. It climbed 1% to ₹385 on the BSE.

HPCL Q1 results

Last year, the company and other state-run fuel retailers—Bharat Petroleum Corporation Ltd (BPCL) and Indian Oil Corporation (IOC)—made extraordinary gains by holding diesel and petrol prices despite a drop in cost.

The price freeze was justified in the name of recovering losses HPCL and other two retailers had suffered in the previous year when they did not raise retail prices despite a surge in cost.

The gains arising from the price freeze were eroded, with petrol and diesel prices being cut by ₹2 per litre each just before general elections were announced. This, together with a drop in product cracks or margins on relatively stable crude oil prices, led to a fall in profits.

Cracks -- the difference between raw material crude oil and final product price -- have shrunk from highs of 2022-23.

HPCL earned $5.03 on turning every barrel of crude oil into fuel in the quarter, as compared to a gross refining margin (GRM) of $7.44 per barrel in the same period last year.

HPCL said in a statement, "The reduction in GRMs is primarily due to lower cracks, which are in line with the trend of international product cracks."

HPCL refineries turned 6.7% more crude oil, 5.67 million tonnes, into fuel in the quarter, despite planned shutdowns.

HPCL recorded its highest-ever quarterly sales volume of 12.63 million tonnes (including exports) during the April-June quarter, registering a growth of 6.6%, as against 11.85 million tonnes during the June quarter.