HPCL exuberant after good show

HPCL reported a very good show for Q4FY15 and the stock price remains strongly in the green, currently up over 5% at Rs.669 levels. Intra day high went up to Rs.673 while its 52-week high stood at Rs.686.

The Oil marketing company (OMC) during Q4FY15, reported a 58% (YoY) rise in net profit at Rs.2162 crore and this was mainly on the strength of higher Gross refining margins (GRM) – the cost of turning every barrel of crude oil into fuel. GRM for the quarter came in at US$7.47/barrel compared to US$ 4.66/barrel. Thus surge in GRM thus made up for the volatility in the crude oil prices, especially fall, seen during Q4. In fact the company had an inventory loss of Rs.19 crore in Q4 v/s gain of Rs.453 crore (YoY). Revenue loss of selling LPG and kerosene on Govt fixed prices was at Rs.1051 crore but this was fully compensated. So despite the falling crude, changes due to deregulation of retail diesel prices and re-entry of private sector players into marketing, the OMC did very well. The company has stated that superior marketing performance and effective treasury management is what helped.

HPCL achieved highest-ever market sales of 31.95 million tonnes during 2014-15, up 32.%. Domestic sales increased to 31 million tonnes, increasing market share to 20.94% in PSU category. It’s  refineries maximised crude processing, which resulted in a combined refining throughput of 16.18 million tonnes with a capacity utilisation of 109%. The combined GRM during FY15 was US$ 2.84 per barrel. HPCL’s market share stood at 26.5% in petrol and 25.1% in diesel.