Hindustan Petroleum Corporation: 1Q impacted by fuel retailing losses; GRM in line Quick Note

Research evidence excerpt

Hindustan Petroleum Corporation: 1Q impacted by fuel retailing losses; GRM in line Quick Note

Global Markets Research

Hindustan Petroleum Corporation HPCL.NS HPCL IN 22 July 2026

EQUITY: INDIA ENERGY

Rating1Q impacted by fuel retailing losses; GRM in line Remains Neutral

Target price INR 440 RemainsQuick Note

Closing price INR 395 22 July 20261QFY27 EBITDA loss of INR161bn driven by significant fuel and LPG retailing losses

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 retailing (Fig.1). Gross refining margin of USD23.8/bbl came in 2% above our Research Analysts

estimate of USD23.3/bbl, increasing from USD14.3/bbl in 4QFY26. Crude throughput India Oil & Gas/Chemicals

increased by 1% q-q to 6.5mn tons. Adjusted net loss at INR115bn was better than our Bineet Banka, CFA - NFASL

estimate for a INR122bn loss due to higher tax losses. bineet.banka@nomura.com

+91(22)4037 4044

We estimate 1QFY27 implied fuel marketing loss at INR29.9/litre (our expectation was for

a INR22.8/litre loss) vs the INR2.6/litre loss in 4QFY26. Implied LPG underrecovery at

INR459/cylinder in 1QFY27 was lower than our estimate of INR561/cylinder

(INR84/cylinder in 4QFY26).

HPCL booked an LPG under-recovery of INR56bn in 1QFY27 (INR14bn in 4QFY26), with

a cumulative net negative buffer of INR164bn as of end-June 2026. LPG loss

compensation of INR19.8bn was received in 1QFY27 toward under-recoveries made in

FY25 (being paid in 12 equal monthly instalments).

Maintain Neutral rating and TP of INR440

With oil prices remaining volatile, near-term earnings visibility for OMCs remains clouded.