Hindustan Petroleum Corporation Ltd Q2FY26 – From Salt Trouble to Solid Profits: How India’s Oil Maverick Made ₹3,859 Cr While Wrestling Crude and Bureaucracy
1. At a Glance
Picture this — a PSU that smells of diesel, sweats out dividends, and occasionally chokes on salt. Hindustan Petroleum Corporation Ltd (HPCL) — the desi refinery that literally fuels your road trips and chai-stall gossip — clocked ₹1,00,856 Cr revenue in Q2FY26 and a PAT of ₹3,859 Cr, flexing a YoY profit jump of over 2600%.
At ₹469/share and a market cap of ₹99,763 Cr, HPCL now trades at a P/E of 7.16, cheaper than a samosa at PSU canteen prices compared to Reliance’s gourmet 26x multiple. With a ROE of 13.8%, ROCE of 10.5%, and dividend yield of 2.24%, HPCL looks like that obedient student who quietly scores 80% in every exam — not flashy, but dependable.
Yet, the company recently fought off a salty crude corrosion issue at its Visakh refinery, proving that even oil majors have to deal with “hard water problems.” Despite this, it declared a ₹5/share interim dividend, reported GRMs of US$8.8/bbl, and kept expanding capex like it’s playing Monopoly with barrels instead of dice.
2. Introduction – India’s Fuel Pump with a PhD in Chaos
HPCL isn’t just another PSU. It’s that friend who is always late but still shows up with snacks. It runs refineries, sells petrol, produces hydrocarbons, manages pipelines, and still finds time to build a ₹71,000 Cr petrochemical complex in Rajasthan.
The company controls 13.44% of India’s refining capacity and commands a 20.5% share in domestic petroleum product sales — the kind of duopoly flex you only see in Bollywood families and Indian oil marketing.
While Reliance and Adani flirt with green hydrogen, HPCL is still juggling crude barrels, GRMs, and a boardroom that smells like aviation turbine fuel. But the PSU charm remains: steady dividends, strong parentage (hello, ONGC!), and the occasional government nudge when petrol prices threaten voter sentiment.
Is HPCL a boring old PSU, or a stealth compounding machine in disguise? Hold that thought — we’re about to dive deep into the refinery pipes.
3. Business Model – WTF Do They Even Do?
HPCL’s business model is simple: buy crude, refine it, and sell petrol at every corner of the country — while juggling global oil price tantrums and Delhi’s pricing control drama.
It operates two big refineries — one in Mumbai (9.5 MMTPA) and one in Visakhapatnam (13.7 MMTPA) — and also co-owns the HMEL refinery in Bhatinda (11.3 MMTPA) with Mittal Energy. Add a 16.95% stake in MRPL, and HPCL effectively has its hands dipped in nearly every refinery pot in India.
But HPCL isn’t just about refineries — it’s a full-service petroleum buffet:
Retail Fuel Stations: Over 22,953 outlets, serving everything from truckers to Tesla-owners using the restroom.
LPG Network: 6,370 distributors and 97 million LPG consumers, because no Indian election is complete without subsidized gas cylinders.
Pipelines: 5,134 km of own pipelines, plus another 1,380 km via JVs — moving refined products across the country faster than a Swiggy delivery.
Lubricants & Petrochemicals: Runs India’s largest lube refinery and is expanding into LOBS and bitumen upgrades.
HPCL also dabbles in E&P services, biofuels, and even EV charging (over 5,000 charging points) — because why not? Everyone’s doing it.
So, yes — HPCL refines oil, runs pumps, bottles LPG, manages pipelines, and dreams of a greener future… all while managing government expectations and refinery corrosion at the same time.
4. Financials Overview
Metric (₹ Cr)
Q2 FY26
Q2 FY25
Q1 FY26
YoY %
QoQ %
Revenue
1,00,856
99,957
1,10,825
0.9%
-9.0%
EBITDA
6,852
2,296
7,461
198.4%
-8.1%
PAT
3,859
143
4,111
2599.3%
-6.1%
EPS (₹)
18.14
0.67
19.32
2599.3%
-6.1%
Commentary: When your YoY profit jumps 2600%, you don’t explain it — you frame it. Q2FY25 was a bloodbath (₹143 Cr profit), but this quarter’s ₹3,859 Cr redemption story is pure PSU cinema. Refining margins cooled a bit QoQ, but HPCL still managed to stay in the green despite price controls and salty crude headaches.
5. Valuation Discussion – Fair Value Range Only
Let’s play with some numbers, shall we?
(a) P/E Method
EPS (FY25-26 Annualized) ≈ ₹65.5
Industry average P/E = 20.9
HPCL’s current P/E = 7.16
Fair Value Range (P/E Method): Low-end: 10x = ₹655 High-end: 15x = ₹983
(b) EV/EBITDA Method
EV = ₹1,70,067 Cr
EBITDA (TTM) = ₹25,603 Cr
EV/EBITDA = 6.64
Industry median = 8x–10x
Fair Value Range (EV/EBITDA): 8x → ₹1,92,000 Cr → ₹530/share 10x → ₹2,40,000 Cr → ₹660/share
📘 Educational Disclaimer: This fair value range (₹530 – ₹980) is purely for educational purposes, not investment advice. Real-world pricing may depend on GRMs, crude prices, and Delhi’s patience with petrol inflation.
6. What’s Cooking – News, Triggers, Drama
HPCL’s recent headlines read like an Indian daily soap:
Salted Crude Chaos: Processed B-80 crude with high salt content causing refinery corrosion and yield loss. Supplier claims are being pursued — even oil companies now need water softeners.
