HPCL Q3 results: Net profit trebles to Rs 529 crore

The 21-month record freeze in retail fuel prices despite fall in input raw material (crude oil) prices helped raise marketing margins but refining margins were lower and the firm also suffered inventory losses because of the lag in buying and processing oil during which time rates fell.

HPCL earned USD 8.49 on turning every barrel of crude oil into fuel like petrol and diesel during October-December Image Courtesy: Reuters.

Hindustan Petroleum Corporation Ltd (HPCL) on Thursday reported trebling of profit in the December quarter as robust marketing margin negated inventory losses.

Standalone net profit of Rs 529.02 crore, or Rs 3.73 per share, in the December quarter, as compared to Rs 172.43 crore, or Rs 1.22 a share, in last year, the company said in a statement.

The 21-month record freeze in retail fuel prices despite fall in input raw material (crude oil) prices helped raise marketing margins but refining margins were lower and the firm also suffered inventory losses because of the lag in buying and processing oil during which time rates fell.

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HPCL earned USD 8.49 on turning every barrel of crude oil into fuel like petrol and diesel during October-December as compared to USD 9.14 per barrel gross refining margin last year.

However, the firm booked Rs 700-750 crore inventory loss in the period under review. The profit in October-December -- the third quarter of the current fiscal -- was lower than Rs 5,118.16 crore in the preceding quarter ended September 30, 2023.

This was "primarily due to suppressed marketing margins on select transport fuels and lower refining margins attributable to lower cracks and falling crude prices during the period", the statement said. Revenue from operations was almost flat at Rs 1.18 lakh crore.

In 2022, state-owned fuel retailers Indian Oil Corporation (IOC), Bharat Petroleum Corporation Ltd (BPCL) and HPCL froze prices, despite a spike in global oil prices following Russia's invasion of Ukraine. This was with a view to insulate consumers from price volatility.

The price freeze led to the three firms incurring losses in the first half of 2022-23 fiscal (April 2022 to March 2023). When prices started to fall last year, they recouped previous year's losses and the same continues even now. The board approved an interim dividend of 150 per cent (Rs 15) on each equity share of Rs 10.

"With progressive commissioning of units at Visakhapatnam refinery, HPCL refineries processed highest-ever crude throughput of 16.49 million tonnes during the April-December period (operating at close to 104 per cent of installed capacity) registering an increase of 16.7 per cent over crude throughput of 14.13 million tonnes processed during April-December 2022.

"Despite the turnaround activities at one crude distillation unit (Visakhapatnam refinery), the crude throughput during October-December 2023 was 5.34 million tonnes (operating at 95.4 per cent capacity) with an increase of 10.6 per cent over crude throughput of 4.83 million tonnes processed during October-December 2022," it said.

On the marketing front, HPCL achieved its highest-ever quarterly sales volume (including exports) of 11.90 million tonnes during October-December 2023 (11.25 million tonnes during corresponding period of previous year) representing a growth of 5.8 per cent.

The total sales volume (including exports) during April-December 2023 at 34.49 million tonnes was also the highest-ever nine-month sales volume with growth of 6.6 per cent.

"In the domestic market, HPCL continued to outpace PSU industry sales growth, registering quarterly sales growth of 3.2 per cent during October-December 2023 as compared to PSU industry growth of 2.8 per cent during this period," it said. HPCL also registered market share gain/above industry growth in key products -- 0.20 per cent -- during October-December.

"To strengthen refining and marketing infrastructure HPCL has invested Rs 10,350 crore during April-December 2023 (including equity investment in its JVCs and subsidiaries)," it said.

HPCL said it has received regulatory approvals for setting up a wholly owned subsidiary for its renewable and green energy portfolio and has incorporated HPCL Renewables & Green Energy Ltd.

HPCL has ambitious plans to increase its renewables portfolio to 10 GW by 2030 and bio-fuels portfolio through new 1G, 2G, and CBG plants.

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