(Reuters) -Indian state-run refiner Hindustan Petroleum (HPCL) reported a rise in second-quarter profit on Wednesday, reflecting higher refining margins across its operations.
Standalone net profit rose more than six fold to 38.3 billion rupees ($435.75 million) in the three months ended September.
HPCL’s gross refining margin – the profit from making refined products from one barrel of oil – rose to $8.80 per barrel for the quarter as compared to $3.12 reported last year.
Key Context
India, the world’s third largest oil importer and consumer, witnessed an uptick in fuel demand for two of the three months between July and September.
Global Brent crude oil prices – used by refiners as raw material – dropped about 1% in July-September quarter.
Earlier this week, rival Indian Oil Corp (IOC) posted a multi-fold jump in second-quarter profit, boosted by stronger refining margins.
BPCL is yet to report quarterly results.
Peer Comparison
Valuation (next Estimates (next 12 Analysts’ sentiment 12 months) months)
RIC PE EV/EBITDA Revenue Profit Mean No. of Stock to Div growth (%) growth rating* analyst price yield (%) s target** (%)
Hindustan 7.25 6.79 -0.08 20.79 Buy 14 0.94 2.39
Bharat Petroleum 7.93 6.20 1.64 4.48 Buy 20 0.89 3.03
Indian Oil 8.78 6.68 1.03 25.43 Buy 18 0.95 2.00
Reliance 22.32 11.30 6.72 13.01 Buy 34 0.86 0.38
* The mean of analyst ratings standardised to a scale of Strong Buy, Buy, Hold, Sell, and Strong Sell
** The ratio of the stock’s last close to analysts’ mean price target; a ratio above 1 means the stock is trading above the PT
JULY-SEPTEMBER STOCK PERFORMANCE
(Reporting by Manvi Pant; Editing by Leroy Leo)
HPCL issues fuel import tenders
India’s Hindustan Petroleum issued two rare tenders to import transport fuels for early November delivery, two sources familiar with the matter said on Tuesday, after the company shut one of its processing units due to feedstock contamination.
Chairman Vikas Kaushal said on Tuesday HPCL had closed its gasoline-producing continuous catalytic reformer during the processing of contaminated oil that it had sourced from Hindustan Oil Exploration Company. HOECL said in a statement it will engage in talks with HPCL over redressing the issue.
HPCL has sought about 34,000 tons of gasoline and 65,000 tons of gasoil for delivery between November 1 and 10 at the port of Mundra on the western coast of India, one of the sources said.
The company did not immediately respond to a request for comment on the tenders.
The tenders, closing on Tuesday, were issued after the “operational issues” arose at the company’s Mumbai refinery, the second source said.
HPCL said in a statement to the National Stock Exchange on Monday that the oil was “found to be causing operational issues including corrosion in downstream units, yielding suboptimal outputs and turning down production”.
“Potential reasons are the very high salt and chloride content in the crude oil,” it added.
Key Takeaways
- HPCL’s Q2 standalone net profit rose more than sixfold to ₹3,830 crore.
- HPCL’s gross refining margin rose to $8.80 per barrel.
- India witnessed an uptick in fuel demand for two of the three months between July and September.
