Hindustan Petroleum Corporation Limited reports strong physical performance in 1QFY25

Hindustan Petroleum Corporation Limited (HPCL) has delivered solid results for the first quarter of fiscal year 2024-25 (1QFY25), despite facing challenging market conditions. The company’s standalone revenue from operations for 1QFY25 was ₹1,20,859 crore, a slight increase from ₹1,19,044 crore recorded in the same period of the previous fiscal year. However, HPCL’s profit after tax (PAT) saw a significant drop, with consolidated PAT at ₹634 crore compared to ₹6,766 crore in 1QFY24. Standalone PAT for the quarter was ₹356 crore, down from ₹6,204 crore year-on-year. This decline is attributed to suppressed marketing margins on select petroleum products and reduced refining margins.

Financial Performance and Margins

The average gross refining margins (GRMs) for 1QFY25 were US$ 5.03 per barrel, down from US$ 7.44 per barrel during 1QFY24. This reduction in GRMs is mainly due to lower cracks in international product cracks.

Despite these financial pressures, HPCL’s refining operations demonstrated resilience. The company achieved a crude throughput of 5.76 million metric tonnes (MMT) during 1QFY25, marking a 6.7% increase from 5.40 MMT in 1QFY24. This growth was achieved even with planned shutdowns in its refineries. HPCL expanded its crude basket by processing imported crudes like Khafji and Varandey, as well as indigenous KGDWN for the first time. The company reported its highest-ever quarterly sales volume of 12.63 MMT (including exports) for 1QFY25, up 6.6% from 11.85 MMT in the previous year.

Operational Achievements

HPCL’s sales of motor fuels grew by 2.7% to 8.02 MMT, and LPG sales rose by 8.7% to 2.07 MMT. The aviation sector saw a robust growth of 31.3%, with sales volume reaching 261 thousand metric tonnes (TMT) during 1QFY25. This was bolstered by the commissioning of a new aviation refueling facility in Kanpur, bringing the total number of such facilities to 55.

In the competitive lubricants market, HPCL reported a 3.1% increase in sales to 152 TMT. The company also achieved its highest-ever petrochemical sales of 30.3 TMT and introduced a new grade of HDPE Raffia in the polymer segment. Additionally, HPCL recorded its highest-ever pipeline throughput of 6.83 MMT during 1QFY25, reflecting a 5.2% growth from 6.50 MMT in 1QFY24.

Strategic Investments and Projects

HPCL invested ₹2,017 crore in 1QFY25 to enhance its refining and marketing infrastructure, including equity investments in joint ventures and subsidiaries. The 9 MMTPA integrated grassroots refinery-cum-petrochemical complex at Barmer, Rajasthan, is progressing with key process units like Diesel Hydrotreating (DHDT) and Hydrogen Generation Unit (HGU) under pre-commissioning. The overall physical progress of the project has surpassed 80%, with total commitments at ₹69,845 crore and capital expenditure at ₹48,001 crore as of June 30, 2024.

The Residue Upgradation Facility at Visakh Refinery, with a capacity of 3.55 MMTPA, is nearing mechanical completion, expected in 2QFY25, with full commissioning anticipated in 3QFY25. Additionally, HPCL’s Mumbai Refinery commissioned the HP De-Aromatized Kerosene (DAK) Unit, producing specialty solvents based on indigenous technology.

Expansion and Sustainability Initiatives

HPCL expanded its retail network by commissioning 126 new retail outlets and 9 new LPG distributorships, increasing the total number of retail outlets to 22,148 and LPG distributorships to 6,358. The company also launched new City Gas Distribution (CGD) projects in Rajasthan’s Geographical Areas, including Tonk, Sawai Madhopur, Karauli, and Dausa.

In its commitment to sustainability, HPCL introduced a Solid Oxide-based Electrolyser (SOE) for green hydrogen production, marking a significant step toward a hydrogen economy. The company’s first biomass-based Compressed Bio Gas (CBG) plant in Badaun, Uttar Pradesh, has begun commercial operations. HPCL also achieved record ethanol blending of 14.3% and significantly increased its retail outlets with CNG and EV charging facilities. Solar panels were installed at 751 retail outlets, bringing the total number of outlets with solar power to 18,369, powering 83% of HPCL’s retail network with renewable energy.

Industry experts commend HPCL’s strategic investments and focus on sustainability, noting the company’s resilience in navigating challenging market conditions. The expansion into green energy and advanced infrastructure is seen as pivotal for long-term growth and environmental responsibility.