HPCL Q2 Results: Profit Falls 6% Despite Record Refining Margin
HPCL Q2 results: Hindustan Petroleum profit fell 6.1% to ₹3,625 crore despite a record $32.15 refining margin, as tax and fuel marketing bit.
Hindustan Petroleum Corporation Ltd (HPCL) posted a consolidated net profit of ₹3,625.22 crore for July–September, down 6.1% year on year, its HPCL Q2 results showed on Thursday.
Its refining margin was the highest the state-run refiner has reported, but a much bigger tax bill and squeezed fuel retail margins pulled profit down from ₹3,859.30 crore a year earlier. The result also brings HPCL back to profit after a consolidated loss of ₹12,264.67 crore in the April–June quarter.
HPCL Q2 results: the key numbers
Revenue from operations rose about 26% to ₹1,39,113.50 crore in the second quarter of FY27, from ₹1,10,396.98 crore a year ago. Total expenses climbed to ₹1,33,228.03 crore from ₹1,05,981.18 crore.
Profit before tax rose 32.9% to ₹6,820.13 crore. Tax expense, however, jumped to ₹3,194.91 crore from ₹1,271.61 crore, so earnings per share fell to ₹17.04 from ₹18.14.
On a standalone basis, HPCL net profit came in at ₹3,482.62 crore, down about 9% from ₹3,830.37 crore in the year-ago quarter. Revenue fell 4.2% from the previous quarter’s ₹1,45,225.11 crore.
The first half still shows the damage from the June quarter. HPCL posted a consolidated net loss of ₹8,639.45 crore for April–September, against a net profit of ₹7,970.23 crore in the same period last year.
Record HPCL refining margin offsets weak marketing
The HPCL refining margin, or gross refining margin (GRM), averaged $32.15 a barrel in the quarter before export cess, up from $8.80 a year earlier. For the first half, the average GRM was $27.89 a barrel, against $5.95.
The company processed 6.20 million metric tonnes (MMT) of crude, running its refineries at 100% of capacity. The Visakh refinery handled 3.60 MMT and the Mumbai refinery 2.60 MMT.
Sales, including exports, grew 5.5% to 12.73 MMT. Petrol and diesel volumes rose 10% to 7.78 MMT, while LPG sales stood at 2.03 MMT.
Marketing is still the weak spot. Crude prices have stayed high through the West Asia crisis, and oil marketing companies have held back on passing the full increase on to consumers at the pump. That restraint is what drove HPCL to its large loss in the June quarter.
LPG remains a drag as well. HPCL booked ₹3,960 crore of government compensation for domestic LPG under-recoveries for April–September. Its unrecognised cumulative negative LPG buffer still stood at ₹18,048.82 crore as of 30 September.
In its results statement, the company described its performance as “resilient” amid the ongoing West Asia crisis.
Capex, projects and a governance flag
HPCL spent ₹2,085 crore on capital expenditure in the quarter and ₹3,819 crore in the first half. Mechanical work is complete on the 201-km Haldia–Panagarh LPG pipeline, and a blue hydrogen unit has been commissioned at the Visakh refinery.
The statutory auditors’ limited review noted that HPCL did not have the number of independent directors required under SEBI’s listing regulations. The auditors did not modify their conclusion on that account.
The company is led by Vikas Kaushal, its chairman and managing director, who was appointed in March 2025 for a five-year term. A former energy practice leader at consulting firm Kearney, he was the first private-sector executive to head a state-run oil company. Srividya Venkataraman is HPCL’s Director – Finance.
Why it matters for investors
The HPCL Q2 results show how far the company’s earnings depend on two forces it cannot fully control: global refining cracks and the government’s stance on retail fuel and LPG pricing. A GRM above $32 a barrel lifted the refining business, but some market commentators see margins at this level as a cyclical peak rather than a base for full-year earnings.
For shareholders, the bigger question is the marketing margin. With Brent crude trading above $110 a barrel this week, any recovery depends on retail prices moving or crude cooling off. HPCL shares closed 1.87% lower at ₹340.80 on the NSE on Thursday.
What happens next
After the HPCL Q2 results, investors will look at the September-quarter results of peers Bharat Petroleum and Indian Oil for a read on how the sector is coping. They will also track any decision on compensating the LPG losses that are still unrecognised.
Progress on filling the independent-director vacancies flagged by the auditors is another item to watch. For more corporate earnings coverage, see our latest business news. HPCL’s full results filing is available on the BSE website.
