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Informist, Friday, Oct. 31, 2025

 

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--HPCL: No decision yet on IPO of arm HPCL Renewable and Green Energy    
--HPCL: Confident about growth trajectory going ahead 
--CONTEXT: HPCL management's comments in post-earnings analyst call 
--HPCL: Completed pre-commissioning test in Vizag refinery Thursday 
--HPCL: Ramping up Mumbai refinery to full capacity post operational issues 
--HPCL: Efficiency of retail outlets better than industry average 
--HPCL: Rapidly building consumer business segment, ops growth in high teens 
--HPCL: Plan to cut operational costs next yr; won't give quantum of cut now 
--HPCL: Expect crude oil prices to remain rangebound, benign 
--HPCL: Expect reasonably steady fuel prices 
--HPCL: Not significantly dependent on Russian crude oil 

 

By Taniva Singha Roy and Anjana Therese Antony

 

MUMBAI – Hindustan Petroleum Corp. Ltd. said it is not significantly dependent on Russian crude oil as there are alternative places for sourcing, the company's management said Friday in a post-earnings analyst call. The share of Russian crude in the overall basket was only 5% during the September quarter, the company said. This is lower than the 13% share in the June quarter and way lower than the 35% share in 2024-25 (Apr-Mar). 

 

In the September quarter, the company bought 6 million tonnes of crude, of which 1.1 million tonnes was indigenous crude and 5 million tonnes was imported. The 5% crude on a run-rate basis can be easily replaced by sourcing from other countries, the management said. "We run a lot more on the Middle East crude and increasingly on West African crude," it added. 

 

The fall in the company's Russian crude oil imports comes amid US sanctions on Russian oil. India imported about 1.7 million barrels per day of Russian oil between January and September. US President Donald Trump and the UK sanctioned two of Russia's largest oil firms - Rosneft and Lukoil - to force Moscow into peace talks with Ukraine. The US has also been putting pressure on New Delhi to drastically reduce or stop its crude oil imports from Russia, a major source of the commodity for India.

The public sector oil refining entity expects crude oil prices to remain in range, going forward. Prices have come down from a year ago and will be in a similar range in the coming days. There will be spikes, but by and large, it will be within $60-per-barrel level, the company said. 

 

The refining company expects fuel prices to be reasonably steady. Even if there is a fluctuation in prices by INR 1 or INR 2, the company is strong enough to absorb those changes, the management said. HPCL said it has completed the pre-commissioning test in its Vizag refinery on Thursday. They are also ramping up the Mumbai refinery to full capacity post recent operational issues. These issues included corrosion in downstream units after processing crude oil from Hindustan Oil Exploration Co.'s B-80 Mumbai offshore oil field. 

 

In terms of efficiency of retail outlets, the company said it is better than the industry average. "...the teams are working on it, and we have also launched an initiative working with an external agency, one of the top management consultants, to work on future retail, future-ready retail organisations," the senior management said.

 

The company said it is rapidly building its consumer business segment, with its growth in high teens. It also plans to reduce the operational costs next year, but said it can not provide details about the quantum of the cuts expected.

 

HPCL is also conficent about its growth trajectory going ahead. "We are hopeful and confident that we will continue to perform well and generate both growth opportunities for the organisation and our people, and also wealth creating opportunities for anybody who chooses to invest in HPCL," the management said. 

 

Asked if the company is planning to list its renewable energy subsidiary HPCL Renewable and Green Energy Ltd., the parent company said no decision has been taken yet. This subsidiary was incorporated in January 2024 to foray into new areas of green energy business. 

 

STOCK VALUATION

The management said the company's stock valuation should be higher than the current levels. "I think we have broken into the top 100 of market cap (capitalisation), which I believe is not the rightful place. It should be much higher. But nevertheless, we'll take it in the stride," one of the top management officials said. The company has given 19% annualised returns to its shareholders over a 10-year period since September 2015, the management said. "...we also get sometimes frustrated on that entire thing (valuation)...we leave that valuation part in the safe hands of analysts to their own ways of looking at things." 

 

The company's current market capitalisation is more than INR 1 trillion. On Friday, the stock ended up 1.3% at INR 476 on the National Stock Exchange. Nearly 8 million shares of the company changed hands on the bourse. The company released its quarterly result after market hours Thursday, reporting a whopping 500% on-year rise in its net profit to INR 38.30 billion and its revenue rose to INR 1.10 trillion. Both figures were sharply higher than the Street's expectation, supported by the fall in expenses as well as global crude oil prices.  End

 

US$1 = INR 88.76

 

Edited by Tanima Banerjee

 

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