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HPCL Posts Strong Q3 FY26 Results with 35% YoY Profit Growth Driven by Higher Refining Margins

Hindustan Petroleum Reports ₹4,072 Crore Net Profit, Improved GRMs, Stronger Balance Sheet and LPG Compensation Support
Indian Masterminds Stories

Mumbai: Hindustan Petroleum Corporation Limited (HPCL) reported robust financial results for the third quarter ended December 31, 2025, reflecting a sharp improvement in profitability driven by higher refining margins, steady fuel demand, and government compensation for LPG under-recoveries. The PSU oil major continued to strengthen its balance sheet despite volatility in global energy markets.

Q3 FY26 Financial Highlights (Standalone)

  • Net Profit: ₹4,072.49 crore, up 34.7% YoY from ₹3,022.90 crore
  • Revenue from Operations: ₹1,25,169.47 crore (Q3 FY25: ₹1,19,408.17 crore)
  • Earnings Per Share (EPS): ₹19.14 (Q3 FY25: ₹14.20)
  • Net Worth: ₹55,013.70 crore
  • Debt-Equity Ratio: Improved to 0.89

Refining and Marketing Performance

HPCL’s profitability was primarily supported by a strong recovery in refining margins.

  • Average GRM (9M FY26): US $6.91 per barrel, up from US $4.73 per barrel last year
  • Crude Throughput: 6.38 million metric tonnes (MMT)
  • Domestic Sales Volume: 12.68 MMT

Improved product cracks and operational optimization helped offset challenges related to crude quality issues and forex volatility.

Read also: HPCL Signs 10-Year LNG Supply Deal with ADNOC Gas to Strengthen India’s Energy Security

Government LPG Compensation Provides Earnings Support

  • HPCL recognised ₹1,320 crore for two months as part of a ₹7,920 crore LPG compensation package from the Ministry of Petroleum and Natural Gas
  • Despite this support, the company continues to carry a legacy LPG under-recovery buffer of ₹13,424 crore, subject to future government resolution

Consolidated Financial Performance

  • Consolidated Net Profit (Q3 FY26): ₹4,011.40 crore
  • Consolidated Net Worth: ₹59,881.70 crore
  • Consolidated Debt-Equity Ratio: 0.87
  • Interest Service Coverage Ratio: 8.23 times

The consolidated results include contributions from subsidiaries and joint ventures, including Mangalore Refinery and Petrochemicals Limited (MRPL).

Revenue Composition (Q3 FY26)

  • Sale of Petroleum Products: ₹1,23,953.30 crore
  • Other Operating Revenue: ₹529.93 crore
  • Other Income: ₹686.24 crore

Governance, Audit and Board Approval

  • Results reviewed by the Audit Committee
  • Approved by the Board of Directors on January 21, 2026
  • Statutory Auditors’ Report: Unmodified

Key Strengths and Risks

Positives

  • Strong recovery in refining margins
  • Improved capital structure and reduced leverage
  • Formal LPG compensation mechanism improves revenue visibility

Risks

  • High dependence on volatile global refining margins
  • Foreign exchange losses of ₹1,041.55 crore in 9M FY26
  • Operational risks highlighted by the B-80 crude contamination incident
  • Limited diversification beyond downstream petroleum operations

Outlook

HPCL’s Q3 FY26 results highlight the company’s ability to benefit from favorable refining cycles while strengthening its financial position. However, long-term sustainability will depend on managing margin volatility, resolving LPG under-recovery liabilities, and successfully executing its energy transition and green energy initiatives.

About HPCL

Hindustan Petroleum Corporation Limited (HPCL) is a leading Indian oil refining and marketing public sector undertaking with major refineries, a vast nationwide fuel retail network, and a growing presence in energy infrastructure. HPCL plays a key role in India’s energy security while gradually expanding into cleaner and sustainable energy solutions.

Read also: New CVOs in Major PSUs: Centre Appoints Four Chief Vigilance Officers in ONGC, HPCL, RITES and MRVC


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