Hindustan Petroleum Corporation Ltd. share price target

PAT was at | 868.9 crore, down 54.8% QoQ (estimate: | 2215.7 crore) What should investors do? HPCL's refining performance has improved QoQ and is likely to remain healthy in near term. On the marketing front, passing on higher...

HPCL's reported EBITDA missed our estimates significantly led by lower marketing gross margin (at INR3/lit, 46% est. miss), while GRM was in line at USD6.4/bbl. Refining throughput stood at 4.2mmt (+6% YoY, +68% QoQ). The company completed the expansion of its Mumbai refinery and is running at its optimal capacity as highlighted in the earnings concall. SG GRM has further improved to USD5.9/bbl in Jan'22 YTD, and the ramp up at Mumbai refinery should see near-term margin expansion. The Vizag refinery is running at >100% capacity utilization. The expansion,...

We increase our FY22-24E estimates by 5-11% to factor in to factor in higher GRMs led by 1) pickup in global economic activity and 2) gas to oil shift due to high prices even as there has been softening of marketing margins. HPCL reported lower than expected Q2 results with standalone EBITDA of Rs30.1bn...

Q1 reflects weak benchmark refining margin and impact of planned shutdowns but robust marketing margin

HPCL, the darling of deregulation due to its highest leverage to marketing, is soon going to lose its crown with the addition of 5mmtpa/2mmtpa refining capacity at Visakhapatnam/Mumbai by the end of FY22/CY21. Marketing will account for only 52% of total consolidated EBITDA in FY23E v/s 88% in FY21. Due to Visakhapatnam expansion, Rajasthan greenfield project, and marketing, consolidated debt is expected to rise to INR641b in FY23E from INR427b in FY21, 1.5x its current market capitalization. The residual upgradation project (slurry hydrocracker) at Visakhapatnam is of a...

Q4FY21 revenue grew 13.1% YoY on account of strong demand recovery observed post-lockdown relaxation in FY21. GRM stood at US$ 8.11/bbl (inventory gains of US$ 4.61/bbl) driven by higher volumes in...

HPCL reported a beat on EBITDA led by better-than-estimated marketing sales volumes (+9% est., at 10.1mmt), refining (at USD8.1/bbl) and marketing margin (at INR6/lit). Marketing volumes de-growth for HPCL was at 6.6% v/s ~9% for the industry in FY21, resulting in a gain in market share. Since Apr'21, there is contraction in demand for petroleum products due to localized lockdowns (with petrol/diesel consumption down 30% in May'21 v/s May'19). As per our calculations, gross marketing margin for petrol/ diesel stands at -INR0.3/+INR3/liter currently. Refineries at Visakhapatnam...

HPCL's Q3FY21 result was a beat to our and consensus forecast at all parameters primarily led by higher inventory gains and lower interest costs and higher other income. Reported GRM came at US$1.9/bbl but after adjusting to inventory gains it comes to US$1/bbl, below our estimate. Petroleum product sales volume/crude throughput declined 2%/4% YoY to 10.4/4.0mmt. However, strong marketing margin on auto fuels led growth during the quarter. HPCL has guided for addition of 2mmt of refining capacity at Mumbai from CY22 and ~5mmt refining capacity by end CY21. Also, it expects Rajasthan Refinery of 9mmt to complete by CY23 and Chhara LNG terminal by CY22. We expect HPCL to benefit from...

We increase our FY21E earnings estimates by 30% to incorporate 9MFY21 inventory gains of Rs37.4bn and higher other income; FY22-23E estimates changed by -4/9% to factor in higher depreciation and increased marketing volumes. During Q3FY21, core standalone EBIDTA adjusted for inventory and forex gains was at Rs16.8bn (17%YoY) due to higher marketing earnings....