This article first appeared on GuruFocus .
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Sales Growth:3.1% increase, primarily driven by retail sales.
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Refinery Throughput:6.38%, with 103% utilization.
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Gross Refining Margin (GRM):8.85%, impacted by B-80 crude; potential GRM without impact would have been 10.24%.
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Q3 Profits:INR 4,072 crores, up 32.6% from INR 3,023 crores.
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Nine-Month Profits:INR 12,274 crores, a 106% increase from INR 4,000 crores.
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Cash Generation:Approximately INR 25,000 crores.
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Leverage Ratio:Reduced to 0.86 from 1.37 at the beginning of the year.
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Interest Cost Reduction:Approximately INR 250-300 crores lower compared to the previous year.
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Operational Efficiency:OpEx to turnover ratio improved from 1.60% to 1.37% year-over-year.
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Cost per Metric Ton:Reduced from INR 1,473 to INR 1,278 year-over-year.
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Samriddhi Program Benefits:INR 1,260 crores, with INR 518 crores recurring.
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Release Date: January 22, 2026
For the complete transcript of the earnings call, please refer to the full earnings call transcript .
Positive Points
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Hindustan Petroleum Corp Ltd ( BOM:500104 ) successfully commissioned the Visakh project, marking a significant milestone in technical advancement for the company and the Indian refining industry.
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The company reported a strong financial performance with Q3 profits of INR 4,072 crores, up by 32.6% compared to the previous year.
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Operational efficiencies have improved, with a reduction in OpEx as a percentage of turnover from 1.60% to 1.37% year-over-year.
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The company has significantly deleveraged, reducing its leverage ratio from 1.37 to 0.86, resulting in lower interest costs.
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Hindustan Petroleum Corp Ltd ( BOM:500104 ) has entered into a competitive 10-year gas deal with ADNOC, enhancing its long-term supply security.
Negative Points
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The Mumbai refinery incident negatively impacted the company's GRM by $3.5 per barrel, affecting overall profitability.
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Despite strong financial performance, the company's market capitalization remains undervalued compared to its peers, trading at a significant discount to asset value.
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There are concerns about potential excise duty changes, which could impact future profitability, although the company is preparing for various scenarios.
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The Rajasthan refinery project has experienced cost overruns, with the total outlay nearing INR 80,000 crores.
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LPG under-recoveries have increased due to rising Saudi CP prices, leading to higher losses per cylinder.
Q & A Highlights
Q: Can you provide details on the ADNOC gas deal? A: The ADNOC deal is a Brent-linked contract for 0.5 MTPA over 10 years. It's a competitive deal with gas sourced directly from the Middle East, not through traders.
Q: What is the expected timeline for the Rajasthan refinery to reach full capacity, including petchem conversion? A: We anticipate full capacity alongside petchem conversion by FY '28. While timelines can vary, this is our current guidance.
Q: How are you addressing concerns about the company's market cap not reflecting its performance? A: While market cap is influenced by investor sentiment, our focus is on delivering consistent performance. We have been on a steady path towards achieving our EBITDA goals and believe the market will eventually recognize our value.
Q: Can you explain the impact of the Mumbai refinery incident on GRM and other expenses? A: The Mumbai refinery GRM was impacted by $3.5 per barrel due to the incident. Overall, HPCL's GRM would have been $1 higher without the incident. There were also additional costs related to repairs and logistics.
Q: What are the plans for future CapEx and deleveraging? A: We are focusing on deleveraging and will provide specific guidance in the next analyst call. Future CapEx will be more diversified, with investments in marketing, new energy, and smaller refinery projects rather than large-scale projects.
For the complete transcript of the earnings call, please refer to the full earnings call transcript .
