Hindustan Petroleum Corporation Ltd (HPCL) is facing projections of significant losses in the current quarter (Q1 FY27), primarily due to escalating crude oil prices and substantial under-recoveries in its fuel and LPG marketing segments. While the company reported stronger-than-expected earnings for the March quarter (Q4 FY26), the outlook for the June quarter has deteriorated.
Rising Crude Prices and Marketing Losses Hit HPCL
Analysts highlight a sharp increase in crude prices, weak product prices, and ongoing currency depreciation as critical factors contributing to the anticipated Q1 FY27 losses. Nomura India specifically forecasts considerable losses, estimating a blended loss of Rs 27 per litre on petrol and diesel, alongside an under-recovery of Rs 680 per cylinder for LPG.
Despite these challenging macro conditions, HPCL's marketing margins surprisingly improved in the previous quarter. However, the current quarter's environment, exacerbated by geopolitical tensions, presents a tougher scenario.
Future Outlook and Management Assurance
HPCL management has assured stakeholders of adequate crude availability, with supplies secured until mid-July. Furthermore, new infrastructure projects are expected to bolster future performance. The Vizag residue upgradation facility (RUF) is anticipated to provide incremental benefits from Q2 FY27, while the Barmer refinery (HRRL) is slated for full commissioning by mid-May 2026. These developments are expected to contribute positively in subsequent quarters, but the immediate impact on Q1 FY27 remains negative.
Brokerage Views on HPCL Stock
Several brokerages have revised their outlooks on HPCL. While some acknowledge the Q4 FY26 performance beat, the near-term risk-reward for the stock is considered unfavorable due to the projected Q1 losses. The consensus points to significant challenges unless fuel prices are meaningfully adjusted.