Buy HPCL; target of Rs 320: YES Securities

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26 Aug, 2025 12:21

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YES Securities' research report on HPCL

HPCL’s 3QFY23 reported Ebitda stood at Rs 16.7bn (-11% YoY; -212% QoQ), better than our and street estimates as marketing margins possibly stood better than our estimates. Company doesn’t declare marketing margins. The GRM at USD 9.14/bbl however stood marginally below our assessment. The sequential improvement in earnings stemmed from QoQ recovery in Petrol and Diesel retail margins to ~ Rs10/ltr (2Q: Rs(0.04)/liter) and Rs (5.5)/ltr (2Q: Rs (12)/ltr), as global product price moderated, however firm HSD cracks helped sustain GRMs.

Outlook

As we write while Petrol margins have moderated to Rs 6.5/ltr, the loss on retailing of Diesel has also narrowed to Rs (3-4)/ltr. We expect retail marketing to normalize over FY24-25e. BUY with a TP of Rs 320/sh.

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HPCL - 10 -02 - 2023 - yes