💰 Financial Performance

Revenue Growth by Segment

Total revenue from operations reached INR 4,66,346 Crore in FY 2024-25. Market sales grew by 3.5% in H1 FY26 compared to H1 FY25, reaching a record 49.8 MMT for the full year 2024-25. Refining throughput increased 14% over the last five quarters to 6.57 MMT in Q2 FY26.

Geographic Revenue Split

Not disclosed in available documents, though the company operates a domestic network of 24,252 retail outlets and 6,387 LPG distributors across India, with coastal refineries in Mumbai and Visakhapatnam providing export flexibility.

Profitability Margins

H1 FY26 Profit After Tax (PAT) was INR 8,201 Crore, a 731% increase YoY from a depressed base. Quarterly PAT consistency is noted with Q1 FY26 at INR 4,300 Crore and Q2 FY26 at INR 3,820 Crore. Net worth grew to INR 51,948 Crore in H1 FY26 from INR 45,958 Crore in FY 2024-25.

EBITDA Margin

EBITDA for the trailing 12-month period was INR 28,606 Crore. The company aims for a 2x+ jump in EBITDA levels by FY 2028. H1 FY26 EBITDA stood at INR 15,561 Crore compared to INR 27,221 Crore for the full year FY 2023-24.

Capital Expenditure

Annual capex spending typically ranges between INR 12,000 Crore and INR 14,000 Crore. A massive INR 60,000 Crore investment is planned for Net-zero initiatives by 2040. Segmental capex allocation is roughly 30% for refineries and 60% for marketing.

Credit Rating & Borrowing

The company maintains a 'Stable' outlook from CRISIL/ICRA, supported by its Maharatna status and 54.90% ownership by ONGC. Total Debt Equity Ratio improved to 1.23 in H1 FY26 from 1.80 in FY 2022-23. Long-term debt stood at INR 40,680 Crore as of H1 FY26.

⚙️ Operational Drivers

Raw Materials

Crude oil is the primary raw material, representing the bulk of operating costs. Other materials include intermediates for petrochemicals and naphtha (100 TMT of contaminated naphtha was recently exported at a discount).

Import Sources

Sourced globally via coastal refineries in Mumbai and Visakhapatnam; specific countries are not listed, but coastal locations facilitate international crude imports.

Key Suppliers

ONGC (parent company providing crude and managerial support) and various international crude suppliers via term and spot cargoes.

Capacity Expansion

Current refining capacity share is ~14% in India. Visakh Refinery capacity is 15.0 MMTPA. Planned expansion includes the Barmer Petrochemical stream (HRRL) expected to go online in mid-2026 and the Chhara LNG terminal ramp-up.

Raw Material Costs

Refinery GRM was US$ 5.74/bbl in FY 2024-25 but declined to US$ 3.08/bbl in Q1 FY26 due to narrowing spreads. Crude inventory impact was $0.80/bbl (INR 338 Crore) in recent reporting.

Manufacturing Efficiency

Distillate yield improved from 72.7% in Q1 FY25 to 77.7% in Q2 FY26. Capacity utilization is projected to reach 51.0 MMT market sales by FY28.

Logistics & Distribution

Distribution is handled via 24,252 retail outlets and a massive pipeline network. Marketing activities are the primary focus of 60% of annual capex.

📈 Strategic Growth

Expected Growth Rate

13.60%

Growth Strategy

Growth is driven by 14 initiatives across 4 planks: operational efficiency (Samriddhi program), future growth (Petrochemicals launch at Barmer, Gas portfolio expansion), enablers (Digital/AI pathways), and stakeholder communication. The company is transitioning from a traditional fuel provider to a full energy company including Green Energy and Non-Fuel Retail.

Products & Services

Petrol (MS), Diesel (HSD), LPG, Lubes, Naphtha, Natural Gas, and Petrochemicals.

Brand Portfolio

HPCL, Nayaa HPCL, HP Gas, Club HP, and various Lube brands.

New Products/Services

Launch of niche petrochemical grades from the Barmer refinery (mid-2026) and expansion of non-fuel retail strategies (expected visibility in 6 months).

Market Expansion

Expanding gas portfolios through new deals and increasing utilization of the Chhara LNG terminal. Strengthening the consumer-facing Lubes business rather than immediate divestment.

Market Share & Ranking

2nd largest LPG marketer, 2nd largest retail network holder in India, and 4th largest refiner with a 20.3% domestic market share in petroleum products.

Strategic Alliances

HPCL-Mittal Energy Limited (48.99% JV), HPCL Rajasthan Refinery Limited (74% JV), and various city gas JVs like Aavantika Gas and Bhagyanagar Gas.

🌍 External Factors

Industry Trends

Shift toward Energy Transition (Net Zero by 2040), increasing role of Petrochemicals to offset fuel demand shifts, and digitalization of consumer-facing businesses using AI.

Competitive Landscape

Competes with other PSUs like BPCL and IOCL, and private players like Reliance and Nayara. BPCL's $11 billion Andhra refinery is a key benchmark.

Competitive Moat

Maharatna status, massive entrenched infrastructure (24,000+ outlets), and strategic importance to the GoI provide a significant barrier to entry and cost leadership in logistics.

Macro Economic Sensitivity

Highly sensitive to global crude prices and domestic GDP growth which drives fuel demand (6% CAGR projected for market sales).

Consumer Behavior

Increasing demand for non-fuel retail services at petrol pumps and a shift toward natural gas and green energy.

Geopolitical Risks

Global supply chain disruptions affecting crude prices and import duty protection changes are primary risks.

⚖️ Regulatory & Governance

Industry Regulations

Operations are governed by Ministry of Petroleum and Natural Gas (MoPNG) and DIPAM for any value unlocking/divestment (e.g., Lubes business).

Environmental Compliance

Committed to Net Zero Scope 1 & 2 by 2040 with a planned INR 60,000 Crore investment. Currently holds an ESG rating of '65' (Aspiring Category).

Taxation Policy Impact

Subject to standard corporate tax; benefits from government compensation for LPG under-recoveries (HPCL share is 27-28%).

⚠️ Risk Analysis

Key Uncertainties

Volatility in Gross Refining Margins (GRM) which dropped from $5.03 to $3.08 YoY, and project implementation risks for large-scale JVs like HRRL.

Geographic Concentration Risk

100% of retail operations are in India; refining is concentrated in two coastal locations (Mumbai and Vizag).

Third Party Dependencies

High dependency on GoI for pricing policy and ONGC for crude supply and managerial control.

Technology Obsolescence Risk

Risk of traditional fuel demand decline; being mitigated by a 'Digital Road Map' and expansion into Petrochemicals and Green Hydrogen.

Credit & Counterparty Risk

Strong liquidity backed by cash balances and undrawn working capital lines; receipt of LPG compensation from the government supports liquidity.