H P C L Q2 FY27 Results (NSE: HINDPETRO)
Signal: Steady quarter
The read
The key inflection is a sequential return to positive operating economics: standalone operating margin improved to 5.19% in Q2FY27 from -12.38% in Q1FY27 and 4.83% YoY, but the trajectory remains vulnerable because H1 GRM surged to US $27.89 per barrel from US $5.95 while management says suppressed marketing margins still impacted profitability; H1 PAT was a loss of ₹8,043.79 crore versus profit of ₹8,201.24 crore last year.
| Metric | Value | YoY | QoQ |
|---|---|---|---|
| Revenue | ₹1,39,887.18 Cr | 26.2% | -4.5% |
| Net profit | ₹3,482.62 Cr | -9.1% | |
| EPS | ₹16.37 | -9.1% | |
| EBIT margin | 5.19% |
P&L walk
Standalone Q2FY27 revenue rose 26.2% YoY to ₹1,39,887.18 crore, while profit before tax increased 32.2% to ₹6,767.65 crore; PAT fell 9.1% to ₹3,482.62 crore because the prior-year quarter benefited from a lower tax charge and the current period carried ₹3,285.03 crore of deferred tax expense.
Key positives
- Standalone revenue increased 26.2% YoY to ₹1,39,887.18 crore, while domestic market sales volume rose 4.9% to 11.71 MMT and export sales rose 12.1% to 1.02 MMT.
- Average H1 GRM expanded to US $27.89 per barrel from US $5.95 per barrel, indicating strong refining economics despite marketing-margin pressure.
- Operating margin improved to 5.19% in Q2FY27 from -12.38% in Q1FY27, a 1,757bp sequential recovery.
- Pipeline throughput increased 14.2% YoY to 6.99 MMT, supporting the distribution network.
Key concerns
- H1 PAT was a loss of ₹8,043.79 crore versus profit of ₹8,201.24 crore YoY, despite H1 revenue rising to ₹2,86,294.48 crore from ₹2,31,526.14 crore.
- Management disclosed suppressed marketing margins on certain petroleum products as a profitability drag despite H1 GRM of US $27.89 per barrel.
- Finance costs increased 58.6% YoY to ₹1,207.10 crore in Q2, while H1 outstanding debt rose to ₹65,458.17 crore from ₹55,808.48 crore YoY.
- Operating cash flow was negative ₹7,832.22 crore in H1 versus positive ₹19,099.58 crore YoY, with inventories up to ₹45,353.93 crore and trade receivables up to ₹10,129.15 crore.
- H1 crude throughput declined 3.9% to 12.72 MMT from 13.23 MMT, despite higher market-sales and pipeline-throughput volumes.
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