Hindustan Petroleum Corporation

Research evidence excerpt

Hindustan Petroleum Corporation

Global Markets Research

Hindustan Petroleum Corporation HPCL.NS HPCL IN 24 July 2026

EQUITY: INDIA ENERGY

Rating1Q miss driven by fuel marketing losses Remains Neutral

Geopolitical uncertainties to keep oil price volatile; earnings visibility Target price

Reduced from INR INR 420remains unclear; maintain Neutral with a lower TP of INR420 440

Significant fuel retailing losses lead to 1Q loss; outlook clouded by oil price volatility Closing23 July 2026price INR 385

HPCL’s 1QFY27 standalone EBITDA loss of INR161bn was worse than our estimate for a

INR139bn loss (consensus: INR127bn loss), largely due to higher-than-expected losses in fuel Implied upside +9.1%

retailing (please see our 1Qfirstcut). With 1Q behind us, market focus may shift to the sharp

rise in crude oil price (>USD100/bbl at the time of writing this note) due to ongoing geopolitical Market Cap (USD mn) 8,487.5

tensions in the Middle East. In our assessment, HPCL is most leveraged to crude oil price ADT (USD mn) 29.6

given its high dependence on external sourcing of gasoline and diesel for marketing, which is

going to change meaningfully with the commissioning and full utilization of its 9mtpa Rajasthan Relative performance chart

refinery (Fig.6). LPG under-recoveries may also normalize lower with Saudi propane prices

being revised down from USD760/ton to USD580/ton in July, resulting in a sharp decline in

under-recoveries from ~INR600+/cylinder currently to below INR200/cylinder. However, with

reignited tensions in the Middle East, we suspect Saudi contract price (CP) to again be revised

upward for the next month. Overall, we believe FY27F may be a washout year for HPCL (and

other OMCs), although we are building in a sharp earnings recovery in FY28F as we factor in