Hindustan Petroleum (HPCL) reported recurring standalone EBITDA/PAT of INR 48bn/INR 28.4bn in Q4FY24, implying EBITDA was flat YoY/ PAT declined 11.8%. FY24 EBITDA/PAT of INR 238.5bn/INR 139.5bn (vs. EBITDA loss of INR 131bn/net loss of INR 146bn), however, reflects significantly better refining/marketing performance in FY24 vs. the weakness observed in FY23. A USD 7/bbl YoY dip in GRMs (driven by lower Russian crude discounts) hurt Q4 earnings.
OutlookOur valuation for the company, at 5.2–5.3x average of FY26E EV/EBITDA for the refining and marketing businesses – with listed investments valued at CMP – delivers a target price of INR 635 (unchanged), a material 27% upside from CMP. Reiterate BUY.
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