HPCL Q2 net may dip 83.1% at Rs 54 cr: Motilal Oswal

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26 Aug, 2025 12:21

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Motilal Oswal has come out with its second quarter (July-September) earnings estimates for the oil & gas sector. The brokerage house expects HPCL to report a 17.2 percent rise quarter-on-quarter (degrowth of 83.1 percent year-on-year) in net profit at Rs 54 crore.

Sales are expected to decrease by 15.5 percent Q-o-Q (down 3.7 percent Y-o-Y) to Rs 49959.9 crore, according to Motilal Oswal.

Earnings before interest, tax, depreciation and amortisation (EBITDA) are likely to rise by 2 percent Q-o-Q (down 47.1 percent Y-o-Y) to Rs 536.2 crore.

Motilal Oswal on HPCL:

Quarterly profitability of the OMC's (BPCL, HPCL, and IOC) has remained dependent on the subsidy sharing, which is ad-hoc, than on business fundamentals. For 2QFY15, we model upstream sharing at 60 percent, government’s sharing at 30 percent and the rest 10 percent sharing by the OMC's. The final picture will only be clear when the govt. finalises the subsidy sharing for 2QFY15.

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For FY15, we model marginal sharing by OMC's (2 percent /INR16b), with the rest being shared by upstream (60 percent / INR494b) and the government (38 percent / INR313b). For FY16 / FY17 we model OMC's share at 2 percent, with the rest being shared by upstream and the government.

2QFY15 gross under-recoveries have declined by 29 percent Q-o-Q due to lower under recoveries led by price hikes in diesel, and lower international prices of crude and petroleum products.

We peg refinery throughput at 4.5mmt for 2QFY15 (v/s 3.3mmt in 1QFY15 and 3.9mmt in 2QFY14).

We expect HPCL to report PAT of INR540m in 2QFY15, v/s INR3.2b in 2QFY14 and INR460m in 1QFY15.

HPCL trades at 9.4x FY16E EPS and at 1x FY16E BV.

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