HPCL Q2 profit falls 6% as revenue climbs 26%; broker keeps Buy

Hindustan Petroleum Corporation reported consolidated net profit of Rs 3,625 crore for the second quarter of FY27, down more than 6% from Rs 3,859 crore a year earlier, according to Economic Times Markets on October 23. Revenue from operations increased a little over 26% to Rs 1.39 lakh crore, from Rs 1.10 lakh crore.

The state-owned oil marketing company nevertheless recorded a sharp sequential recovery from its Rs 12,264.67 crore consolidated net loss in Q1 FY27. The results put HPCL shares in focus ahead of Friday’s trading; the report did not establish a post-results market reaction.

The publisher’s headline refers to Q1, but its detailed earnings account consistently identifies the reporting period as Q2 FY27. The figures here follow that detailed account.

Refining margins strengthen as plants run at full capacity

HPCL’s gross refining margin before export cess increased to $32.15 per barrel, compared with $8.80 a year earlier. Its refineries processed 6.20 million metric tonnes of crude during the quarter, operating at 100% of their combined capacity.

Total sales, including exports, rose 5.5% year-on-year to 12.73 million metric tonnes, while domestic sales increased 4.9%. Petrol and diesel sales together grew 10% to 7.78 million metric tonnes. LPG sales stood at 2.03 million metric tonnes, and pipeline throughput reached 6.99 million metric tonnes.

The stronger refining margin and higher sales volumes did not translate into higher year-on-year consolidated profit. The report does not provide a complete reconciliation of the factors behind that earnings decline.

Infrastructure spending reaches Rs 3,819 crore in first half

HPCL incurred capital expenditure of Rs 2,085 crore in Q2, bringing spending for the first half of FY27 to Rs 3,819 crore. The investments were directed towards refining and marketing infrastructure and operational efficiency.

During the quarter, the company mechanically completed its 201-km LPG pipeline between Haldia and Panagarh in West Bengal. The project remained in the pre-commissioning stage, so mechanical completion should not be read as the start of commercial operations.

Why Motilal Oswal retained its Buy call

Motilal Oswal Financial Services maintained a Buy recommendation, saying HPCL’s standalone earnings before interest, tax, depreciation and amortisation exceeded its estimate because marketing losses were smaller than anticipated. That standalone assessment is distinct from the consolidated net profit reported above.

The brokerage put the reported refining margin at a rounded $32.2 per barrel, 8% below its forecast. Refining throughput and marketing volumes were in line with its expectations. The account did not specify a target price or investment horizon for the Buy call.

Stock remains under pressure

At the report’s snapshot, HPCL shares had fallen 32% in 2026 and 23% over one year. They were also down 5% over a month and 1.5% over a week. The report linked the pressure to investor concerns about rising oil prices and supply disruptions associated with the Middle East conflict.

Longer-term returns remained positive: the shares had gained 105% over three years and 56% over five years. HPCL’s market capitalisation was reported at more than Rs 72,516 crore.

The Buy recommendation is the brokerage’s view, not a BharatVox investment recommendation. A sequential return to profit, stronger refining margins and a declining share price do not, on their own, establish whether the stock is suitable for an individual investor.