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Informist, Friday, Oct. 24, 2025

 

By J. Navya Sruthi

 

MUMBAI – Higher refining margins due to lower crude oil prices in the September quarter are expected to help state-owned Hindustan Petroleum Corp. Ltd. report a sharp rise in its net profit for the quarter. Analysts also expect the company's revenue to rise on the back of higher retail sales.

 

The company's net profit is seen surging over four times on year in the September quarter to INR 28.89 billion, while its revenue is expected to rise 5% on year to INR 1.05 trillion, according to the average of the estimates of 10 broking firms. Sequentially, the company's bottom line is expected to fall nearly 34% while the top line is seen falling a little over 5%.

 

The lowest projection for the bottom line was INR 15.89 billion by Kotak Securities Ltd. and the highest was INR 46.0 billion by HDFC Securities Ltd. The highest projection for top line was by Prabhudas Lilladher Pvt Ltd. at INR 1.20 trillion and the lowest was by Motilal Oswal Financial Services Ltd. at INR 904.92 billion.

 

In the September quarter, crude oil prices averaged $65.23 per barrel, down nearly 11% on year from $73.21 per barrel in the year-ago quarter. However, on a quarterly basis, prices rose over 6% from the average of $61.37 per barrel.

 

The drop in crude oil prices on year is seen boosting the refining margins of the company. Nomura expects reported refining margins for the quarter at $7.3 per barrel, more than double the $3.1 per barrel reported in the June quarter. Nuvama also expects a sharp rise in refining margins by 71% on year from $4.03 per barrel and 74% on quarter from $3.1 per barrel.

 

The benchmark Singapore gross refining margin rose 13% on year, led by an increase in global product cracks, brokerage firm Nuvama said in a report. A product crack represents the difference between the price of a barrel of crude oil and that of a refined product. Higher cracks translate to better profitability for refiners processing crude into refined fuels. 

 

The average of estimates of 10 brokerages pegs the company's earnings before interest, tax, depreciation and amortisation, or EBITDA, at INR 57.30 billion in the September quarter. Estimates for the EBITDA range from INR 41.25 billion to INR 78.00 billion.

 

The company's refining throughput is seen rising 5% on year to 6.6 million tonnes, brokerage Motilal Oswal said. It also expects sales volumes to rise 6% on year to 12.3 million tonnes during the September quarter. 

 

Analysts will watch out for the management's commentary on commissioning of the new Rajasthan refinery in 2025-26 (Apr-Mar). They are also keen to know the status of the 'bottoms upgrade' of the Mumbai refinery in the September quarter. As of June, the company had spent almost INR 47 billion for lube modernisation and bottom upgradation project for this refinery.

 

During the refining process, crude oil is separated into fractions or products based on boiling points. The bottoms, or the residue, 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 petrochemical feedstock. 

 

The company refines crude oil and markets petroleum products such as petrol, diesel, LPG, and lubricants. The downstream company operates refineries on the coastline of the country, one on the west coast in Mumbai and the other on the east coast in Visakhapatnam.

 

The company's September quarter earnings are due on Wednesday. Its shares have risen around 9% since it released its June quarter earnings. At 1513 IST, the stock was slightly lower at INR 438.85 on the National Stock Exchange. 

 

Of the 14 brokerage reports on the company available with Informist, 10 have a 'buy' or equivalent rating, one has a 'hold' rating, and the remaining three have a 'sell' rating. Among the brokerages with 'buy' or equivalent rating, the average target price is INR 505.

 

Following are the Jul-Sept earnings estimates for Hindustan Petroleum Corp. Ltd. from 10 brokerages in descending order of the estimate of net profit in INR million:

 

Broking firm	Net profit	Net sales	EBITDA
	(in INR million)
HDFC Securities Ltd	46,000	1,080,000	78,000
Nomura Equity Research	32,000	1,127,000	60,000
YES Securities (India) Ltd	31,870	1,004,533	60,078
ICICI Securities Ltd	30,600	1,034,200	58,300
Nuvama Wealth Management Ltd	30,153	1,052,826	58,194
Motilal Oswal Financial Services Ltd	29,593	904,918	59,049
Prabhudas Lilladher Pvt Ltd	26,700	1,204,500	53,600
Emkay Global Financial Services Ltd	24,283	1,035,306	56,717
JM Financial Institutional Securities Pvt Ltd	21,821	1,017,501	47,795
Kotak Securities Ltd	15,885	1,043,605	41,250
Average	28,890.50	1,050,438.90	57,298.30

 

End

 

US$1 = INR 87.84

IST, or Indian Standard Time, is five-and-a-half hours ahead of GMT

 

Edited by Avishek Dutta

 

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