HRRL or Barmer refinery, in which HPCL has 74% stake, has witnessed cost escalation from Rs431bn projected in FY18 to Rs718bn currently. The project with 9mmtpa of refining capacity and 2.4mmtpa of petrochemicals is likely to throw poor ROCE of ~3% due to high depreciation and interest burden thereof. Additionally, Brent appears to be rising, which means gross marketing margins on auto fuels have peaked. Threat of further hike in excise duty on auto fuel also remains. Structurally, the high marketing leverage that HPCL used to enjoy...