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HPCL Q2 results preview: Gross refining margins likely to fall

Updated : November 01, 2018 08:23 AM IST

State-run  oil refiner Hindustan Petroleum Corp Ltd (HPCL) is set to report a weak set of earnings for the quarter ended September 30.

Bharat Petroleum Corp Monday posted a 48.3 percent decline in its net profit to Rs 1,218.71 crore for the second quarter ended September 2018. The company had earned a net profit of Rs 2,357.40 crore in the same quarter a year ago.

Here is what the street is expecting from HPCL earnings report:
  • The expectations are quite low. Therefore, in terms of operational numbers we are expecting growth rate of around 7 percent, EBITDA decline of around 20 percent and margin contraction of 70 basis points, all this leading to a profit decline of 21 percent odd.
  • A lot of macros leading to this kind of performance where crude prices were up around USD 1 per bbl sequentially, USD 23 per bbl on a year-on-year basis. They grew at around 1 percent on a quarter on quarter basis in this quarter versus 11 percent growth that we saw in the quarter gone by and also INR depreciated sharply by around 5 percent.
  • So these are certain factors that we are keeping in mind. However, these are backdated numbers and oil marketing companies (OMCs) have been asked to absorb Re 1 per litre, so that’s something to watch out for.


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