Winning Bizness Desk

Mumbai.Hindustan Petroleum Corporation Limited (HPCL) posted a strong financial performance in the fourth quarter of FY 2025-26, reporting a consolidated net profit of ₹6,065 crore. The company’s profit surged 77% compared to the same period last year, mainly driven by a sharp rise in refining margins and improved operational performance.

Revenue from operations also increased 4.4% to ₹1.23 lakh crore during the January-March quarter. Following the earnings announcement, HPCL shares gained more than 5% in trading and touched around ₹389 on the stock market. The company’s board also announced a final dividend of ₹19.25 per share for investors.

Refining margins fuel quarterly earnings growth

A major reason behind the sharp rise in profit was the strong improvement in Gross Refining Margin (GRM), a key indicator for oil refining companies. HPCL’s GRM rose to 14.27 dollars per barrel in the fourth quarter, compared to 8.44 dollars per barrel in the same quarter last year.

Key highlights from quarterly performance:

• Consolidated net profit rises 77% to ₹6,065 crore
• Revenue from operations climbs to ₹1.23 lakh crore
• Total income reaches ₹1.24 lakh crore
• GRM jumps from 8.44 dollars to 14.27 dollars per barrel

For the full financial year 2025-26, HPCL’s average GRM stood at 8.79 dollars per barrel, much higher than the previous year’s 5.74 dollars per barrel. The company’s annual consolidated profit also jumped 168% to ₹18,046.89 crore.

Government support cushions LPG losses

The Petroleum Ministry has assured HPCL compensation worth ₹7,920 crore to cover losses suffered on the sale of domestic LPG cylinders. The company said this compensation would be released in 12 equal monthly instalments starting November 2025.

For FY26, HPCL has already recognised ₹3,300 crore as compensation through five instalments in its accounts.

What consolidated profit means:

• Standalone results show performance of one company unit
• Consolidated results include the entire group and subsidiaries
• Investors usually track consolidated numbers for the complete financial picture

The support from the government helped reduce the pressure caused by under-recoveries in cooking gas sales, which continue to impact state-run fuel retailers.

Domestic fuel sales show healthy improvement

HPCL also recorded growth in domestic fuel sales during the quarter. Domestic sales increased from 12.11 million tonnes to 12.43 million tonnes. However, crude throughput declined slightly to 6.43 million tonnes from 6.74 million tonnes a year ago.

The company processed four new grades of crude oil during the quarter, taking the total number of crude grades processed in the financial year to 52. This reflects HPCL’s effort to improve refinery flexibility and optimise production efficiency.

What is GRM?

Gross Refining Margin or GRM is the profit earned by a refinery after converting crude oil into products like petrol and diesel. Higher GRM generally leads to stronger earnings for oil marketing companies.

Expansion plans continue across fuel network

HPCL continued to spend aggressively on expansion and infrastructure projects during the quarter. The company invested ₹4,611 crore as capital expenditure during the January-March period. Total capex for FY26 stood at ₹15,705 crore.

The spending focused on:

• Strengthening refining and marketing infrastructure
• Improving operational efficiency
• Expanding new business lines
• Enhancing fuel distribution network

During the quarter, HPCL opened 526 new retail fuel outlets and added 75 new CNG stations across the country.

Stock rises despite longer-term market pressure

HPCL shares reacted positively after the quarterly results and dividend announcement. The stock rose 5.16% during the trading session after the earnings release. Over the last one month, the stock has gained nearly 12%.

However, the broader trend still remains under pressure:

• Shares are down 22% since January 1 this year
• Stock has fallen around 20% in the past six months

Despite market volatility, the strong earnings growth, better refining margins and continued infrastructure expansion have improved investor confidence in the state-run oil major.