HPCL Expenses Jump 25.9% as Crude and Taxes Pressure Profits
Key Facts
HPCL’s profit fell in the second quarter of fiscal 2026-27 as higher crude prices and tax expenses squeezed fuel-selling margins, according to a report cited by Reuters. The average global Brent crude price jumped nearly 40% year on year during the quarter, amid the continued Iran war and the Russia-Ukraine conflict. The report said these factors pressured the company’s margins despite an increase in the value of product sales. Total expenses also rose 25.9% to 1.33 trillion rupees. The cost of raw materials consumed increased 24.3%, while tax expenses exceeded 3,285 crore rupees, more than double their previous level.
On the revenue side, product sales increased 26.2% to 1.39 trillion rupees in the second quarter. This was supported by government compensation of 3,960 crore rupees for losses on domestic LPG sales during April to September 2026, according to the Reuters report. Domestic sales rose to 11.71 million tonnes, compared with 11.16 million tonnes in the corresponding quarter of the previous fiscal year. Exports also climbed to 1.02 million tonnes from 0.91 million tonnes. The figures show growth in domestic and overseas sales volumes alongside higher sales value.
In refining, the company’s average gross refining margin improved to $27.89 a barrel during April-September, from $5.95 a year earlier. The report attributed part of the improvement to gains from lower-cost crude inventories. But weak marketing margins on some petroleum products affected the company’s profitability over the same period, Moneycontrol reported, citing the company. These factors highlight the differing performance of refining and marketing in the first half. Crude processed in the second quarter also fell 5.6% to 6.20 million metric tonnes, from 6.57 million metric tonnes a year earlier.
On a consolidated basis, HPCL posted net profit of 3,625.22 crore rupees in the second quarter, down 6% year on year, according to Moneycontrol. The quarterly result differed from the first-half outcome, as the company recorded a consolidated net loss of 8,639.45 crore rupees during April to September 2026. It had posted consolidated profit of 7,970 crore rupees in the first half of the previous fiscal year. The report said the first-half loss was linked to weak marketing margins on some petroleum products. The company therefore posted consolidated profit in the second quarter alongside a cumulative loss in the first six months.
On a standalone basis, the company’s report said revenue from operations rose 26.1% year on year to 1,39,140 crore rupees in the second quarter. But it fell 4.1% from the previous quarter, when it was 1,45,126 crore rupees. Finance costs rose 58.6% year on year to 1,207 crore rupees, compared with 761 crore a year earlier and 765 crore in the previous quarter. The company also recorded a standalone loss of 8,044 crore rupees in the first half, against profit of 8,201 crore rupees in the same period a year earlier. The comparison between the quarter and first half reflects the different accounting periods, while margin and cost pressures continued to weigh on the company’s results.