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    H P C L

    HINDPETRO
    Oil, Gas & Consumable Fuels·13 May 2026
    Management Summary

    HPCL delivered a strong financial performance in FY26, marked by record PAT and significant deleveraging, driven by cost optimization and robust refining operations. However, the company anticipates a challenging Q1 FY27 with expected losses due to volatile crude prices and increased LPG under-recoveries. Key projects like RUF and HRRL are progressing, albeit with some delays, while digital transformation initiatives are accelerating.

    Highlights

    5

    • FY26 Stand-alone PAT of ₹17,175 crores, representing a 233% increase YoY and 17% higher than the company's previous best.

    • FY26 Consolidated PAT reached ₹18,047 crores, with strong contributions from HMEL and MRPL.

    • Debt-Equity Ratio significantly improved to 0.8 by FY26 end, down from 1.63 in H1 FY25, exceeding guidance.

    • The Samriddhi cost takeout program delivered ₹1,691 crores in savings for FY26, surpassing the revised target of ₹1,500 crores.

    • Refining operations achieved their best-ever throughput of over 26 million tons, marking a 3% YoY growth.

    Concerns

    4

    • Q1 FY27 is expected to be 'very tough' with anticipated 'losses' due to high crude prices and low product prices.

    • RUF stabilization is slower than anticipated, with full ramp-up expected in 1-2 months.

    • HRRL incident (fire) delayed Commercial Operations Date (COD), with initial operation at 60% capacity expected in June.

    • LPG losses per cylinder increased significantly to ₹170 in April and ₹670-700 in May, compared to approximately ₹84 in Q4 FY26.

    Key financials

    Metrics

    10

    Periods

    3

    Headline

    3
    • HMEL Q4 GRM
      17 $/bbl
    • HMEL FY26 EBITDA
      ₹6,800 Cr
    • HMEL Q4 EBITDA
      ₹3,300 Cr

    Q4 FY26

    2
    • Revenue
      ₹1.23L Cr
      YoY+4.5%
    • Stand-alone PAT
      ₹4,901 Cr
      YoY+46%

    FY26

    5
    • Stand-alone PAT
      ₹17,175 Cr
      YoY+2.3%
    • Consolidated PAT
      ₹18,047 Cr
    • Opex as Turnover
      1.4%
    • Opex per MT
      ₹1,344
    • Interest Expense
      ₹3,337 Cr

    Capital allocation

    2
    high confidence
    CategoryHeadline
    Capex

    ₹15,700 crores

    Debt

    0.8x EBITDA

    Guidance & targets

    9
    CategoryTargetPriority
    Debt
    Debt-Equity Ratio
    0.8
    		High
    Cost Savings
    Samriddhi Program Savings
    ₹1,691 crores
    		High
    Refining Operations
    RUF Full Ramp-up
    Full ramp-up
    		Medium
    Refining Operations
    HRRL COD
    COD shortly
    		Medium
    Refining Operations
    HRRL Initial Capacity
    60% capacity
    		Medium
    Refining Operations
    HRRL Refinery Section Ramp-up
    fully ramp up
    		Medium
    Infrastructure
    Chhara Port Full Capacity Run
    10.5 to 11 months of the year
    		Medium
    Projects
    2G Ethanol Project Start
    start project
    		Medium
    Profitability
    Q1 FY27 Outlook
    losses
    		High

    RUF Full Ramp-up

    next 1-2 months
    CurrentBack on stream, ramping up
    TargetFull ramp-up achieved

    Why it matters

    Crucial for realizing incremental financial benefits from a major refinery upgradation project.

    The unit is now, as I speak, back on stream and now it is ramping up fully. We are expecting full ramp-up in the next month or 2.

    How to verify

    guidance_and_targets[metric='RUF Full Ramp-up']

    Risks & concerns

    5
    RiskSeverity

    Geopolitical Uncertainty & Crude Price Volatility

    Turbulent times with crude prices shifting $8-$10 in a day, impacting costs and market stability. — Management acknowledged

    high

    Product/LPG Availability & Supply Chain Disruptions

    Challenges in securing product and LPG availability due to supply chain disruptions, requiring adaptive sourcing. — Management acknowledged

    medium

    Rupee Depreciation

    Forex challenges due to rupee depreciation, which the company has mitigated by lowering forex exposure by $250-300 million. — Management acknowledged

    medium

    Expected Losses in Q1 FY27

    Management explicitly stated that Q1 FY27 is expected to be 'very tough' with 'losses' due to high crude and low product prices. — Management acknowledged

    high

    HRRL Fire Incident Delaying COD

    A localized fire incident at HRRL's CDU unit delayed COD, but management considers the financial impact minor and expects insurance claims. — Management downplayed

    low

    Q&A highlights

    8

    “Pre-crisis, I was relying, say, half on term contracts and half on spot. Of late, given the challenge that a lot of term contracts were from Persian Gulf, we had to rely a lot more on spot cargo. So we have to do our spot purchases a lot more frequently.”

    Highlights the shift in crude sourcing strategy due to geopolitical events and increased reliance on spot markets, impacting costs and agility.

    asked by Probal Sen

    2 min read5 chapters

    Detailed Narrative

    01

    Strong Financial Performance in FY26 Despite Q4 Challenges

    HPCL reported a robust FY26, with standalone PAT reaching INR17,175 crores, a 233% increase year-over-year and 17% higher than its previous best. Consolidated PAT stood at INR18,047 crores, significantly boosted by contributions from HMEL and MRPL in Q4. The company's debt-equity ratio improved dramatically to 0.8 by the end of FY26, down from 1.63 in H1 FY25, surpassing its own guidance of 'close to one.' This deleveraging was supported by strong operational performance and a INR8,500 crore reduction in working capital.

    02

    Cost Optimization and Operational Efficiency

    The Samriddhi cost takeout program exceeded its revised target, achieving INR1,691 crores in savings for FY26, with INR744 crores identified as recurring savings for FY27. Operational expenditure as a percentage of turnover decreased from 1.54% in FY25 to 1.45% in FY26, and opex per metric ton dropped from INR1,438 to INR1,344. Refining operations achieved their best-ever throughput of over 26 million tons, representing a 3% year-on-year growth.

    03

    Refining Project Updates and Delays

    The RUF unit, commissioned on January 3rd, is currently ramping up after initial stabilization issues due to catalyst clogging, with full ramp-up expected in the next 1-2 months. The HRRL project experienced a fire incident on April 20th, delaying its Commercial Operations Date (COD). Management expects to start producing diesel and MS this month, with initial operations at 60% capacity by June, and the refinery section fully ramped up in Q2 FY27. The 2G Ethanol project achieved mechanical completion by March 31st and is expected to start in the next 2-3 months.

    04

    Q1 FY27 Outlook and Marketing Margin Pressures

    Management anticipates a 'very tough' Q1 FY27 with expected 'losses' due to high and volatile crude prices ($100-$120/bbl compared to $60-$65/bbl previously) and low product prices. LPG marketing margins have deteriorated significantly, with losses per cylinder increasing from approximately INR84 in Q4 FY26 to INR170 in April and INR670-700 in May. The company is actively managing supply chain disruptions and volatile crude sourcing, shifting to spot and diverse international sources.

    05

    Digital Transformation & Efficiency Initiatives

    HPCL has re-energized its digital transformation efforts, establishing a dedicated team and focusing on four key themes: digitization/automation (85% retail outlets connected), interconnectivity (improving supply chain links), technology for efficiencies (implementing Real-Time Optimizers in refineries for 0.5% yield extra), and AI/Generative AI (reducing vehicle tracking alarms from 80,000 to a few hundred daily). These initiatives aim to drive efficiencies and improve operational agility.

    This is an AI-generated summary of a publicly available earnings call transcript. It is for informational purposes only and does not constitute investment advice, a recommendation, or an endorsement. inve.money is not a SEBI-registered investment advisor. Please consult a qualified financial advisor before making any investment decisions.