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Informist, Wednesday, May 13, 2026

 

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--HPCL:Co, other oil cos have secured crude supply for a long period of time
--CONTEXT: Comments by HPCL mgmt in post-earnings analyst call
--HPCL: Availability of crude not an issue, pricing may be a challenge
--HPCL: Curtailed planned capex in FY26 which helped reduce debt
--HPCL: Expect Q1 to be very tough, expecting losses
--HPCL: Have completed 99.5% of breakwater facility at Chhara LNG terminal
--HPCL: Hope to get nod to run Chhara LNG terminal for 11 months per year
--HPCL: Current debt at INR 475.99 billion vs INR 633.23 bln year ago
--HPCL: Co carrying 2-month crude inventory; getting enough supply for July
--HPCL: See no LPG supply shortage till July, carry same level of inventory
--HPCL: Co buys crude from 41 nations, can refine over 180 types of crude
--HPCL: Project FY27 capex to be less than FY26, may change if war ends
--HPCL: Loss at INR 170 per LPG cylinder in April, INR 670 in May 

 

By Sunil Raghu and Eshitva Prakash

 

AHMEDABAD/MUMBAI – The Hindustan Petroleum Corp. Ltd. management Wednesday said the company has secured crude oil supply for a long period and availability of the commodity is not likely to be an issue. "Of course, pricing, we all know, has been a challenge," the management said in a call with analysts after the company had released its March quarter earnings. The statement comes at a time of intense speculation about India, like many other countries, facing an acute shortage of crude oil because of the prolonged military conflict in West Asia.

 

For liquefied petroleum gas, the company management said the country is largely dependent on the Persian Gulf region for imports, though the country has been able to raise domestic production and increase alternative sourcing. "As we speak, we have a very good forward coverage on the supply availability," the management said. "I can assure you, those of you who are connected with LPG cylinders, your kitchens are not going to go dry. You will get your cylinders."

 

Except for the first 3–4 days of the crisis in West Asia, there was no "shock and awe" at what was happening, the management said, as the company usually keeps roughly two months of inventory. "Two months of secured supply," a top official said. "And right now, we are already in the market, starting to lap up cargo for July, and we are getting enough cargo." The official said HPCL buys crude oil from 41 different countries and runs close to 190 types of crude in its refineries.

 

For the March quarter, HPCL reported a 46% jump in net profit at INR 49.02 billion. The company reported a revenue of INR 1.24 trillion for the quarter, up 4.5% on year. Excluding excise duty, the company's revenue was INR 1.15 trillion.

 

Talking of LPG under-recovery, which averaged INR 84 per cylinder in the quarter, the official said it had since risen to INR 170 per cylinder in April and INR 670 per cylinder in May. The management refused to share any forward-looking views, saying it expects the June quarter to be "very tough". "You all are aware of the situation," the official said. "Crude (prices) are very expensive, product prices are low, and everything is quite volatile. As of where we stand, there would be losses in the first quarter."

 

On capital expenditure, the official said that while he could not recollect the number offhand, "our projected capex for this year is slightly lower than last year.... If (the) war (in West Asia) ends tomorrow and we get into a boom cycle, we might do more than that."

 

To overcome the geopolitical challenge, the company has deferred or cancelled some "avoidable" capital expenditure. This has helped HPCL's standalone debt-to-equity ratio to rise to 0.8 times as on Mar. 31 from 1.38 times a year ago. This, a company official said, was lower than the previously guided key ratio of 1 time. The company's current debt, too, has now come down to INR 475.99 billion from INR 633.23 billion a year ago.

 

Talking of the company's liquefied natural gas terminal at Chhara in Gujarat, the management said nearly 95% of the breakwater facility has been completed and it now expects to be allowed to operate almost throughout the year as an all-season facility. HPCL was required to build a breakwater of around 2 km to prevent any incident that could potentially damage the facility due to rough seas. Without the breakwater, the company would not get regulatory approval to operate during the monsoon season, thereby restricting the project's operational and financial potential. Even while commissioning the terminal, the project was delayed after reports that an LNG tanker had rammed into the jetty, damaging infrastructure.

 

The company announced its earnings during market hours Wednesday. Its stock closed 5.5% up from Tuesday at INR 390.10 on the National Stock Exchange.  End

 

Edited by Rajeev Pai

 

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