Hindustan Petroleum Corporation (HPCL) share price slipped 2 percent in the early trade on June 17 after the company posted a weak set of numbers for the quarter ended March 2020.
The company on Tuesday reported a steep 99 percent drop in its net profit to Rs 27 crore for the March quarter against a net profit of Rs 2,970 crore in the corresponding period a year ago.
"The drop in net profit was mainly because of inventory losses and exchange rate fluctuations," HPCL Chairman and Managing Director M K Surana told reporters.
The company suffered an inventory loss of Rs 4,113 crore in the January-March 2020 quarter as compared with an inventory gain of Rs 1,224 crore in the same period a year back, he said.
Also Read - HPCL Q4 net profit drops 99% on inventory, forex losses
HPCL recorded domestic sales volume of 9.25 million tonnes in the fourth quarter, against 10.03 million tonnes in the corresponding quarter of the previous financial year.
Gross sales in 2019-20 were Rs 2,86,250 crore, compared Rs 2,95,713 crore for the previous year.
The company will continue its plans to spend Rs 12,000 crore on capital expenditure in FY21 despite reporting a sharp drop in net profit in 2019-20.
We would be spending Rs 12,000 crore towards capital expenditure. For new projects, we will be prioritizing or phasing them out. Our major vizag and Mumbai refinery expansions are in advanced stage and we would be commissioning them this fiscal. So there is no major change to capex," said Mukesh Kumar Surana, HPCL chairman said, as quoted by Mint.
Also Read - HPCL to spend Rs 12,000 crore on capex in FY21
"During the quarter the company registered an inventory loss of ₹4,113 crore as crude pieces had collapsed sharply in March. Headline GRM’s for the quarter stood at negative USD 1.23 per barrel though GRM’s adjusted for inventory losses surprised positively at USD 9.37 per barrel as compared to USD 0.85 per barrel in Q4FY19," said Jyoti Roy, DVP Equity Strategist, Angel Broking.
"While the Q4FY20 numbers have come in ahead of street estimates, we believe that the Q1FY21 would be keenly watched by the markets given that demand would be adversely impacted for the better part of the quarter as compared to just about a week in Q4FY20,” she added.
On the other hand, Petrol and diesel prices were raised for the 11th straight day on June 17. Petrol price was increased by 55 paise per litre and diesel by 60 paise a litre, taking the total increase in 11 days to Rs 6.02 for petrol and Rs 6.4 for diesel.
At 09:24 hrs, Hindustan Petroleum Corporation was quoting at Rs 212.85, up Rs 2.95, or 1.41 percent on the BSE.
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