Hindustan Petroleum Corporation (HPCL IN) – Q4FY26 Result Update – Q1FY27 GMM expected to remain under pressure – Accumulate
Published on 14 May 2026
HPCL reported a GRM of USD14.3/bbl in Q4FY26 vs USD5.4/bbl in Q3FY26. Refining throughput stood at 6.4mmt, flat QoQ and down 4.6% YoY. Marketing sales volumes incl. exports increased 2.4% YoY but declined 2.5% QoQ to 13.0mmt, with implied GMM at INR6.2/lit (INR5.4/lit in Q3FY26). EBITDA (incl. forex loss of INR14.5bn) came in ahead of est. at INR89.8bn (+27.9%/+54.7% QoQ/YoY) (PLe INR43.7bn, BBGe INR39.3bn). Improved operational performance in FY26 drove EBITDA/PAT growth of 83.6%/133.2% YoY respectively to INR304.9bn and INR171.8bn respectively. As per HPCL, crude inventory is currently maintained at normal levels of ~60 days, with May & June’26 supplies fully secured, although at higher premiums. For July’26, supplies have already been secured until 15 July’26, while procurement for the remainder of month is ongoing. With no hike in RSP prices, MS and HSD marketing margins remain negative. We estimate GMM at INR2.1/lit and INR4.9/lit while build in GRM assumptions of USD7.3/bbl and USD7.1/bbl for FY27E/FY28E respectively. We value the company at 1.2x FY28E PBV (earlier: 1.1x) and maintain Accumulate rating with a revised target price of INR427 (earlier: INR421).
