Hindustan Petroleum Corporation Ltd (HPCL) has reported a nearly seven-fold increase in its net profit for the third quarter of the current fiscal. The company's net profit stood at Rs 211.03 crore for the third quarter of the current fiscal against Rs 31.40 crore in the corresponding quarter last fiscal.

This is mainly due to better refining margins and compensation from the Government to offset revenue loss incurred on sale of petroleum products at a controlled price. Mr S. Roy Choudhury, Chairman and Managing Director, HPCL, said that the profit was despite higher absorption of under-recoveries on sale of petroleum products.

HPCL's income from operations grew to Rs 33,902.50 crore during the quarter from Rs 27,661.93 crore in the same period last fiscal.

Domestic sales

The domestic sales of petroleum products have increased to 18.88 million tonnes (mt) registering a growth of above 4.1 per cent over the same period of previous year. Petrol sales increased by 12.5 per cent and that of diesel by 8.3 per cent over the corresponding period of the previous year, he said.

HPCL's refineries at Mumbai and Visakhapatnam processed 10.43 mt of crude during April-December 2010 as against 11.85 mt during April-December 2009, largely due to planned shutdowns. The combined gross refining margins recorded for the period was $3.96 a barrel against $2.51 in the corresponding period of the previous year.

The interest cost for the period was, however, lower at Rs 659 crore against Rs 740 crore in the same previous year period. The decrease in interest cost was due to an increase in the short term foreign currency borrowings at competitive rates, he said.

On the 9 mtpa joint venture refinery at Bathinda, being constructed by HPCL-Mittal Energy Ltd (HMEL), he said, it has achieved about 94 per cent overall progress. The mechanical completion is expected by May 2011.

HPCL scrip settled at Rs 340.30, up 0.07 per cent from the previous close on the BSE.

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