HPCL reported a weak set of numbers in Q2FY17 on the back of higher than expected inventory loss and lower than expected volume. The company's revenue remained flattish YoY to Rs421 bn (below IDBIest) while EBITDA came at Rs12.6 bn vs a loss of Rs667 mn (-65% QoQ) and net profit grew to Rs7 bn against a net loss of Rs3.2 bn, below expectation. Crude throughput decreased 4% YoY to 4.5mmt (-9.8% QoQ) while sales volume increased 3.2% to 8.2mmt (-8.3% QoQ). GRM came at US$3.2/bbl in Q2FY17, up from US$2.7/bbl in Q2FY16. Total under-recoveries on SKO came at Rs3.6 bn which was fully absorbed by the government. We are revising our SOTP based TP upwards to Rs457 (based on 11x FY18E EPS) from Rs400 earlier on the back of improved...