Release Date: January 24, 2025
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Hindustan Petroleum Corp Ltd (BOM:500104, Financial) reported a significant increase in profit after tax for Q3 FY25, reaching INR3,023 crore compared to INR529 crore in the same quarter of the previous year.
- The company achieved its highest ever crude throughput of 18.53 million metric tonnes, operating at 106% of installed capacity.
- Sales volume growth outpaced industry growth, with a 7.6% increase in sales volume from April to December 2024.
- The company commissioned a 5 million metric ton Chhara LNG regassification plant, enhancing its infrastructure capabilities.
- Hindustan Petroleum Corp Ltd (BOM:500104) has been actively expanding its retail network, commissioning 450 new retail outlets and 6 LPG distributorships during the quarter.
Negative Points
- The average gross refining margin (GRM) decreased to $6.01 per barrel from $8.49 per barrel in the previous year.
- The company faced inventory losses during the quarter, with INR355 crore in refinery and INR460 crore in marketing.
- There was a reported loss of INR700 crore in the integrated operations of HMEL, primarily due to subdued polymer prices.
- The company is still awaiting government approval for the carve-out of its lubricant business, which could delay potential value unlocking.
- The under-recovery on LPG subsidies amounted to INR7,600 crore, with INR3,100 crore in Q3 alone, impacting financial performance.
Q & A Highlights
Q: When can we expect the Barmer refinery to be fully operational?
A: The Barmer refinery's physical portion is expected to be commissioned by December 2025, with full operations anticipated in FY27. Initial stabilization may occur in the first quarter of FY26-27.
Q: How much of the crude supply comes from Russia, and what are the plans for Q4?
A: Currently, 35% to 40% of our crude is sourced from Russia. We have secured our crude requirements up to March, including Russian cargoes. We do not foresee disruptions in crude availability.
Q: What are the expected GRMs for the next year for Mumbai and Visakh refineries?
A: The GRMs are expected to be in the range of $5 to $6 per barrel, with an additional $2 to $3 per barrel from the Visakh refinery's new unit. We typically perform better than the Singapore GRM benchmark.
Q: What is the status of the LNG terminal at Chhara, and are there any long-term contracts?
A: We are in the process of signing long-term contracts. Until then, we will procure cargo on a spot basis. The terminal will operate on a tolling model, and we expect to meet our captive requirements and market opportunities.
Q: How has HPCL managed to improve refining margins in Q3 despite global pressures?
A: Improved refining margins are due to better operational performance, with refineries operating above capacity and controlled fuel losses. We expect similar GRM trends to continue in the near future.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
