Analyst Concall
HPCL to start crude residue upgrade unit at Vizag in few wks
This story was originally published at 13:39 IST on 8 August 2025
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--HPCL:Apr-Jun core GRM, ex-inventory loss, at $6.54/bbl vs $5.35/bbl yr ago
--HPCL: LPG underrecovery directionally headed downwards
--HPCL: May explore debottlenecking of Vizag refinery beyond 15 mln tn/yr
--HPCL: LPG underrecovery was at INR 21.48 bln in Apr-Jun
--HPCL: Underrecovery on domestic LPG seen at INR 10 bln in Jul-Sept
--HPCL: Russian crude share lower in Apr-Jun on cost rationale
--HPCL: Russian crude share was 13.2% of overall crude portfolio in Apr-Jun
--HPCL: Locked in INR 2.5 bln of operational effeciences in Apr-Jun
--HPCL:Hope for INR 10 bln-INR 15 bln EBITDA uplift on routine ops by Mar 31
--CONTEXT: Comments by HPCL mgmt in post-earnings analyst concall
--HPCL: Hope to commission bottom upgrade project at Vizag in coming weeks
By Sunil Raghu and Akash Mandal
AHMEDABAD/MUMBAI – Hindustan Petroleum Corp. Ltd. hopes to commission its residue upgrade project at Visakhapatnam refinery in the coming weeks, the company's management said Friday in its post earnings analyst call.
During the refining process, crude oil is separated into fractions or products based on boiling points. The residue, also called the bottoms, are generally the heavier components, be it heavy fuel oil or asphalt. These are relatively less valuable and harder to market. A bottoms upgrade project helps reduce the production of these low-value products by converting them into lighter and marketable fuels as diesel, gasoline and petrochemicals feedstock.
HPCL has already begun operating the Visakhapatnam refinery at higher capacity of 15 million tonnes per annum, from 8.2 mtpa earlier. "We do have plans on what to do further with that in terms of the bottlenecking, etc. There'll be similar attempts at Barmer also, which will help optimise the asset further," the management said. HPCL's currently has refining capacity of 24.5 mtpa on standalone basis.
HPCL's net profit for the June quarter rose a little over 12 times on year to INR 43.71 billion, buoyed by lower global crude oil prices that pumped up operating margins. The company's operating margin for the quarter was up at 5.04% from 0.54% a year ago. The state-owned oil major's income from sale of products for the June quarter was INR 1.20 trillion, down 0.65% on year. The company's revenue, excluding excise duty, was INR 1.10 trillion, down nearly 2.7% on year.
The company's gross refining margin in June quarter fell to $3.08 per barrel, from $5.03 per barrel a year ago. This was way below what analysts had estimated it to be, in the range of $8.2 per barrel to $9.1 per barrel. The company management said that excluding the inventory loss, its core GRM stood at $6.54 per barrel, compared with $5.35 per barrel in Apr-Jun last year.
Talking about underrecovery of liquefied petroleum gas, the company management said that it stood at INR 109 billion for 2024-25 (Apr-Mar), at INR 21.48 billion in Apr-Jun. "And going forward, if we look at Q2 (Jul-Sept), going by the current level of under recovery, we may add another INR 10 billion to the bottomline," the management said. On per cylinder basis, they said it was around INR 164-INR 167 per cylinder in Apr-Jun. Directionally, the quantum of under-recovery on LPG appears to be shrinking, management said. End
IST, or Indian Standard Time, is five-and-a-half hours ahead of GMT
Edited by Akul Nishant Akhoury
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