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Informist, Tuesday, Jul. 21, 2026

By Pratyush Kumar

MUMBAI – Hindustan Petroleum Corp. Ltd. is expected to report a huge loss for the June quarter due to under-recoveries caused by the surge in crude oil prices and the inability to pass on this cost increase to consumers, according to brokerages tracking the company.

The refining major is likely to post a net loss of INR 123.35 billion for the June quarter, according to the average of estimates from 12 brokerages. This would imply a sharp drop from the profit of INR 43.70 billion it made in the year-ago quarter. The company had reported a net profit of INR 49 billion for the March quarter. The highest estimate for the company's net loss for the June quarter is INR 187.97 billion from Emkay Global Financial Services Ltd. and the lowest is INR 66.25 billion from Nuvama Wealth Management Ltd.

Hindustan Petroleum is expected to report net sales of INR 1.32 trillion for the June quarter, up 20% on year and up 16% sequentially. The highest estimate for net sales is INR 1.62 trillion from YES Securities (India) Ltd. and the lowest is INR 1.10 trillion from Dolat Capital Market Pvt. Ltd.

The company had reported a profit of INR 172 billion for the financial year 2025-26 (Apr-Mar). Nearly 72% of the company's profit for FY26 is likely to be eroded in just the June quarter due to the war in West Asia.

Oil marketing companies are likely to benefit from falling crude oil prices and strong product cracks in the near to medium term, Elara Securities (India) Pvt. Ltd. said. Every $1 per barrel drop in crude oil price improves realisation on petrol and diesel sales by INR 0.60 per litre each, the brokerage added. For every $10 per barrel decline in crude oil price, the loss on sales of liquefied petroleum gas would drop by INR 10.2 per kilogram, implying a decline of about INR 328 billion in annual LPG under-recovery, Elara added.

Investors will look forward to any guidance from the company on earnings for the rest of FY27. Key factors to watch are if the company expects any increases in excise duty and guidance on when it expects the recent hike in petrol and diesel price to be reversed. These are likely to impact the oil marketing company's profitability, brokerages said. Product cracks, still near historical highs, will also be a key point to watch for the company, Elara said. 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.

Another factor to watch for will be the movement of international spot prices of liquefied natural gas, which will depend on the ramp-up of LNG exports from the upcoming new capacity in the US and normalisation of exports volumes from Qatar, Elara said. This price will have bearing on Hindustan Petroleum's earnings from sales of gas.

The oil marketer is likely to face adverse effects from the special additional excise duty on exports of petroleum products. The company's losses in the June quarter are expected to be recovered over the next nine months, Dolat Capital said.

Analysts will look out for the company's LPG under-recoveries and subsidies, progress in capital expenditure, the outlook on supply from the Organisation of Petroleum Exporting Countries, Equirus said. The stabilisation of the Visakhapatnam residue upgradation facility and updates on the Barmer refinery will also be closely watched, the brokerage said. The company's LPG under-recoveries are likely to rise sharply due to high Saudi contract prices and the depreciation of the rupee despite a hike in product prices, Nomura Equity Research said.

The company's under-recoveries had risen to INR 170 per cylinder in April and INR 670 per cylinder in May, the company management had said in a call with analysts after its March quarter earnings. Earlier, the oil marketer's LPG under-recovery averaged at INR 84 per cylinder in the March quarter. The management had then refused to share any forward-looking views and said it expects the June quarter to be "very tough".

Hindustan Petroleum's estimated under-recovery for the June quarter is over INR 477 billion, according to an Informist analysis. This is almost 10 times the INR 49 billion net profit the company had reported for the March quarter and almost three times the INR 172 billion net profit it had reported for FY26.

The company's June quarter throughput is expected to fall 2% on year due to lower supply of crude oil, Nuvama said. The company's domestic sales are likely to decline slightly on year due to a fall in consumption of petroleum products, the brokerage added.

Hindustan Petroleum is expected to report an earnings before interest, tax, depreciation, and amortisation loss of INR 136.38 billion for the June quarter, according to the average of 12 estimates. The highest estimate for EBITDA loss is INR 173.17 billion from JM Financial and the lowest loss estimate is INR 59.70 billion from Nuvama.

The company is expected to post an EBITDA loss for the June quarter, primarily due to under-recoveries on sales of products and domestic LPG, negative gross integrated margins, and a rise in working capital requirements, leading to elevated debt levels and higher interest payments, Dolat Capital said.

Hindustan Petroleum is expected to be the worst hit among oil marketing companies for the June quarter due to higher marketing-to-refining skew, Equirus Securities Pvt. Ltd. said. The company's reported gross refining margin is estimated at $7.7 per barrel on throughput of 6.5 million tonnes for the June quarter. Marketing margins are expected to be negative INR 8.8 per litre on sales volumes of 13.3 million metric tonnes, Prabhudas

Lilladher said.

Hindustan Petroleum will detail its June quarter results Wednesday. Tuesday, shares of Hindustan Petroleum Corp. closed at INR 406.95 on the National Stock Exchange, up marginally from Monday.

Of the 12 brokerage reports on the company available with Informist, eight have a 'buy' recommendation on the stock with an average target price of INR 484, which is 19% higher than the current market price. One brokerage has a ‘hold' recommendation on the stock with a target price of INR 440.

Three brokerages recommend a ‘sell' on the stock at a target price of INR 337. 

Following are the Apr-Jun earnings estimates for Hindustan Petroleum Corp. Ltd. from 12 brokerages in descending order of the estimate of net loss, in INR billion:

End

US$1 = INR 96.23

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

Edited by Pankaj Aher

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