HPCL Q2 Results: Profit at ₹3,625 Crore as GRM Hits $32; LPG Gap Widens

Hindustan Petroleum Corporation Ltd (HPCL) posted a consolidated net profit of ₹3,625.22 crore for the September quarter, recovering from a ₹12,264.67 crore loss in the June quarter, the company said on October 22.

The HPCL Q2 results were driven by a sharp rise in refining margins, though profit was still 6.1% below the ₹3,859.30 crore earned a year earlier. Revenue from operations rose 26% year-on-year to about ₹1.39 lakh crore.

HPCL Q2 results: refining margins carry the quarter

HPCL’s gross refining margin (GRM), before export cess, jumped to $32.15 a barrel in the quarter from $8.80 a year ago. For the first half of FY27, the average GRM was $27.89 a barrel, against $5.95 in the same period last year.

Its refineries processed 6.20 million metric tonnes (MMT) of crude, running at 100% of combined capacity. The Visakh refinery handled 3.60 MMT and the Mumbai refinery 2.60 MMT.

Total sales, including exports, rose 5.5% to 12.73 MMT. Petrol and diesel volumes together grew 10% to 7.78 MMT, while LPG sales stood at 2.03 MMT.

On a standalone basis, HPCL net profit came in at ₹3,482.62 crore, compared with ₹3,830.37 crore a year earlier. Consolidated profit before tax rose 32.9% to ₹6,820.13 crore, but a tax expense of ₹3,194.91 crore, up from ₹1,271.61 crore, pulled the bottom line lower.

LPG under-recoveries still weigh on the balance sheet

The June quarter loss came as HPCL held down prices of petrol, diesel, LPG and jet fuel during the West Asia crisis, passing on only small increases to consumers. Marketing margins were squeezed even as refining stayed healthy, PSU Watch reported at the time.

Refining was not the weak spot then. HPCL’s June-quarter GRM was $23.80 a barrel, up from $3.08 a year earlier, before certain export levies, but that was not enough to cover the marketing losses.

That pressure has not fully eased. HPCL recognised ₹3,960 crore of government compensation for domestic LPG under-recoveries for April–September 2026, according to Free Press Journal.

Its unrecognised cumulative negative LPG buffer, however, stood at ₹18,048.82 crore as of September 30. That compares with ₹16,405.92 crore at the end of June, which means the gap kept widening through the quarter.

For the first half, HPCL reported a consolidated net loss of ₹8,639.45 crore, against a profit of ₹7,970.23 crore in H1 FY26. Half-year revenue rose 23.3% to about ₹2.84 lakh crore.

The statutory auditors noted that HPCL did not have the required number of independent directors under SEBI’s listing regulations. Their limited review conclusion was not modified.

What it means for oil marketing companies

For India’s state-run fuel retailers, the quarter shows how much rides on refining. Strong margins have made up for losses on capped retail prices, but the growing LPG buffer leaves the balance sheet exposed if crude prices stay volatile.

Fuel costs also feed into the wider economy. Wholesale inflation rose to 11.39% in September on higher fuel and metal prices, a trend that business leaders across sectors are tracking closely.

HPCL spent ₹2,085 crore on capital projects in the quarter and ₹3,819 crore in the first half. It completed mechanical work on the 201-km Haldia–Panagarh LPG pipeline, commissioned a fuel farm at Bhogapuram airport and started a blue hydrogen unit at Visakh.

The company also refinanced ₹51,970 crore of debt at a lower cost, while the credit rating of Rajasthan Refinery Ltd was upgraded to AA+ with a stable outlook, according to a results summary published by TaxGuru.

HPCL shares closed 1.87% lower at ₹340.80 on the NSE on October 22, the day the board approved the results.

Investors will now watch whether the government clears further LPG compensation and whether refining margins hold up in the December quarter. Peer Bharat Petroleum is scheduled to report its September-quarter numbers on October 23.

HPCL’s results filing is available on the NSE financial results page. For more on corporate earnings, see our business news section.