Hindustan Petroleum Corporation (HPCL IN) – Q3FY26 Result Update – Results in line; focus on operational efficiency – Upgrade to ‘Accumulate’
Published on 22 Jan 2026
We upgrade the stock to ‘Accumulate’ on improving operational efficiency and completion of major projects, leading to an improvement in return ratios. Refining throughput increased 5.8% YoY to 6.4mmt and reported GRM stood at USD8.9/bbl, both in line with our estimates. Marketing volumes improved 10.5% QoQ/3.7% YoY to 13.3mmt (PLe: 13.4mmt) with an implied GMM of Rs5.4/lit (PLe: Rs5.5/lit). EBITDA (incl. forex loss of Rs2.4bn) improved 1.9% QoQ/17.6% YoY to Rs70.2bn (PLe: Rs72.9bn, BBGe: Rs75.2bn). Improved performance in 9MFY26 led to 99.1%/206.1% YoY growth in EBITDA/PAT. HPCL has commissioned its Vizag refinery and expects it to commence commercial operations in Q1FY27. As per Mgmt, opex-to-turnover ratio declined YoY in 9MFY26. We build in a GRM of USD7.2/7.3/bbl for FY27E/28E. On the marketing front, we estimate GMM at Rs5.6/4.8/lit for FY27E/FY28E. We value the company at 1.2x of Dec’27E PBV (previous: 1.3x at FY27/28E) and upgrade the rating to ‘Accumulate’ from ‘HOLD’ arriving at a TP of Rs457 (previous: Rs501).
