State-run Hindustan Petroleum Corporation (HPCL) on Friday reported that its consolidated net profit tanked by almost 98 per cent year-on-year (y-o-y) to ₹143 crore for Q2FY25 due to lower refining and marketing margins.
On a sequential basis, the net profit of the oil marketing company (OMC) was down by 78 per cent.
HPCL’s consolidated total income during the July-September quarter this fiscal year stood at around ₹1.09 lakh crore compared to ₹1.22 lakh crore in Q1 FY25 and ₹1.03 lakh crore in Q2 FY24.
“The primary reasons for lower PAT are suppressed marketing margins on select petroleum products, reduced refining margins due to lower cracks and falling international crude and product prices,” HPCL said.
Average Gross Refining Margins (GRMs) for Q2FY25 were $3.12 per barrel ($13.33 per barrel in Q2FY24 and $5.03 per barrel in Q1 FY25).
The reduction in GRMs is in line with the trend of international benchmark product cracks, the OMC added.
Its consolidated total expenses stood at ₹1.08 lakh crore in Q2FY25 compared to ₹1.21 lakh crore in Q1 FY25 and ₹96,267 crore in Q2 FY24.
HPCL’s acting CMD Rajneesh Narang, in an investor call, said the OMC recorded a ₹2,057 crore under-recovery on selling domestic LPG at government rates.
The company also booked an inventory loss of ₹1,400 crore as international oil prices fell by about $5 per barrel during Q2 FY25. This compared to an inventory gain of ₹900 crore on refining business in July-September 2023, added Narang, who also holds the charge of Director (Finance).
Operational metrics
During the period April-September 2024, HPCL refineries recorded highest ever crude throughput of 12.06 million tonne (MT), operating at 103.7 per cent of the installed capacity, registering an increase of 8.2 per cent y-o-y over the throughput of 11.15 MT a year-ago.
During Q2 FY25, the refineries recorded crude throughput of 6.30 MT (operating close to 107.7 per cent of the installed capacity) registering an increase of 9.6 per cent y-o-y over the throughput of 5.75 MT during Q2 FY24.
Widening the company’s crude basket, HPCL procured two new grades of crude (Jubilee and Pazflor) for the first time.
During the period April-September 2024, HPCL recorded sales volume of 24.25 MT (including exports) registering a growth of 7.3 per cent y-o-y.
The company recorded sales volume of 11.62 MT (including exports) during Q2 FY25 registering a growth of 8.2 per cent y-o-y.
On the domestic front, HPCL achieved sales volume growth of 5.6 per cent during the quarter as against PSU Industry growth of 1.8 per cent. HPCL also recorded a market share gain of 0.78 per cent amongst PSU oil companies during the quarter.
During Q2FY25, sales of motor fuels stood at 6.8 MT, registering a growth of 4.5 per cent y-o-y. And in case of LPG, the company achieved a sales volume of 2.25 MT, which is a growth of 5.9 per cent y-o-y.
The aviation business of the company recorded a growth of 19.6 per cent y-o-y with sales volume touching 2,50,000 tonnes. HPCL’s lubricants segment sales volume was 1,68,000 tonnes during the quarter, a growth of 5 per cent y-o-y.
During Q2FY25, the company recorded its highest-ever petrochemical sales of 30,400 tonnes. HPCL also recorded a pipeline throughput of 6.53 MT, a growth of 6.5 per cent y-o-y.