New Delhi [India], July 23 : Hindustan Petroleum Corporation Ltd's (HPCL) June quarter performance fell short of expectations as weaker-than-estimated fuel marketing margins offset stronger refining margins, according to a results review by Motilal Oswal Financial Services.
The brokerage said HPCL's EBITDA loss was 37 per cent higher than its estimate at Rs 161.3 billion, primarily due to weaker-than-expected marketing margins.
While the company's reported gross refining margin (GRM) stood at USD 23.8 per barrel, the improvement in refining performance was outweighed by weakness in the marketing business.
According to the report, HPCL's gross marketing margin, including inventory impact, stood at a negative Rs 14.9 per litre.
The brokerage noted that refining throughput remained broadly in line with expectations at 6.5 million metric tonnes (mmt), while marketing volumes also matched estimates at 13.1 mmt.
Motilal Oswal further highlighted that LPG under-recovery rose sharply to Rs 55.9 billion, compared with Rs 13.4 billion in the fourth quarter of FY26, adding to the pressure on earnings.
As a result, HPCL's loss after tax stood at Rs 115.3 billion.
The report also noted that other income, finance costs and depreciation were above its estimates, while forex loss stood at Rs 0.2 billion.
According to the brokerage, HPCL had a cumulative negative net buffer of Rs 164 billion as of June 2026 due to under-recoveries on LPG cylinders, compared with Rs 128 billion as of March 2026.
Motilal Oswal said the Ministry of Petroleum and Natural Gas, through letters dated October 3 and October 24, 2025, approved compensation of Rs 79.2 billion to HPCL for under-recoveries on the sale of domestic LPG up to March 31, 2025, as well as those expected up to March 31, 2026.
The compensation is to be released in 12 equal monthly instalments. According to the brokerage, three equal monthly instalments aggregating Rs 19.8 billion have been recognised so far.
Despite healthy refining margins and stable refining and marketing volumes during the quarter, the brokerage said significantly weaker marketing margins and elevated LPG under-recoveries remained the key factors weighing on HPCL's quarterly performance.
The shares of HPCL declined around 2.58 per cent to Rs 385/ share at the time of reporting.