Synopsis: Brokerages remain divided on Hindustan Petroleum Corporation after a strong quarterly performance, as refining gains supported earnings while rising crude prices, fuel losses, and currency pressures cloud near-term profitability.
The shares of this refining company majorly engaged in business of refining of crude oil and marketing of petroleum products, production of hydrocarbons as well as providing services for management of E&P Blocks were in focus after posting strong quarterly performance
With the market capitalization of Rs. 78,336 Crores , the shares of Hindustan Petroleum Corporation Ltd were trading at around Rs. 368 per share, which is 27.5 percent discount from its 52-week high of Rs. 508 per share and is trading at a P/E of 4.34 whereas industry P/E stands at 14.5
Hindustan Petroleum Corporation Limited announced a dividend of Rs 19.25 per share on a face value of Rs 10, with August 14, 2026 fixed as the record date. The dividend yield stands at 2.83%.
Macquarie on HPCL
Macquarie Group maintained its ‘Outperform’ rating with a target price of Rs 510, implying a potential upside of 38 percent from the current market price of Rs 368 per share, highlighting that HPCL delivered a stable fourth quarter led by stronger-than-expected refining margins. However, the brokerage warned that near-term challenges continue for oil marketing companies.
The brokerage estimates that Indian OMCs are currently losing around Rs 18 per litre on petrol and Rs 35 per litre on diesel sales. Despite these pressures, Macquarie believes refining strength supported quarterly earnings and helped offset weakness in fuel marketing.
Nomura on HPCL
Nomura Holdings downgraded the stock to ‘Neutral’ from a positive stance and reduced its target price to Rs 440, implying a potential upside of 19 percent from the current market price of Rs 368 per share. While the brokerage acknowledged that fourth-quarter earnings were ahead of expectations, it turned cautious on the near-term outlook.
According to Nomura, HPCL could face significant losses in the first quarter of FY27 because of sharply negative fuel marketing margins and record LPG under-recoveries. The brokerage expects blended losses of around Rs 27 per litre on petrol and diesel, while LPG under-recovery has risen to nearly Rs 680 per cylinder, the highest ever.
Nomura added that although a possible windfall tax on diesel exports may support standalone refiners, oil marketing companies could still struggle unless meaningful fuel price hikes are implemented.
Jefferies on HPCL
Jefferies maintained an ‘Underperform’ rating on Hindustan Petroleum Corporation Limited with a target price of Rs 275, implying a 25 percent downside from the current market price of Rs 368 per share. The brokerage said HPCL’s EBITDA was 63 percent above its estimates, largely because of stronger refining performance and inventory gains.
Despite the strong quarterly performance, Jefferies highlighted that marketing margins remain sharply negative due to ongoing losses on petrol and diesel sales. The brokerage also pointed to multiple operational headwinds including high physical crude premiums, elevated freight costs, and depreciation in the Indian rupee.
Jefferies warned that longer crude shipping cycles could increase working capital requirements, pressure the balance sheet, and raise net debt levels. Reflecting these concerns, the brokerage cut its FY27 PAT estimate to a loss of Rs 178 billion and reduced FY28 earnings estimates by 18 percent .
Goldman Sachs on HPCL
Goldman Sachs retained a ‘Neutral’ rating with a target price of Rs 310, implying a 15 percent downside from the current market price of Rs 368 per share The brokerage said fourth-quarter EBITDA came in much higher than expected, likely supported by inventory gains and benefits from lower-cost crude sourced in the previous quarter.
During the management interaction, HPCL guided for a loss in the first quarter because of higher crude oil prices, rupee depreciation, and the absence of inventory gains. The company also said crude inventory levels remain steady at nearly two months of refinery runs.
Management indicated that Russian crude replaced a large part of Persian Gulf sourcing, while imports from the US, West Africa, and Venezuela increased. Goldman Sachs also noted that the expected margin improvement from Vizag refinery’s bottom upgradation project has been delayed by one quarter due to operational issues and is now expected from the second quarter onward.
HPCL reported strong quarterly profitability supported by refining gains and inventory benefits, but most brokerages remain cautious as fuel marketing losses, LPG under-recoveries, and higher crude-linked costs are expected to weigh on earnings in the coming quarters.
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