HPCL earnings for the quarter ended September 30, 2026 showed consolidated net profit of about ₹3,625 crore, down 6% from a year earlier, as losses on fuel sales offset gains from stronger refining margins. The state-run Hindustan Petroleum Corporation reported the results on October 22, returning to profit after a loss of approximately ₹12,265 crore in the preceding quarter.
Key Takeaways
- Second-quarter profit recovered sequentially but remained below the year-earlier level.
- First-half refining margins strengthened sharply, while below-market fuel sales constrained profitability.
- Quarterly sales volumes rose 5.5%, and refineries operated at full capacity.
Table of Contents
- HPCL earnings reflect a split between refining and marketing
- Unrecognised LPG shortfall reaches ₹18,049 crore
- Full refinery utilisation supports higher sales
- Conclusion
HPCL earnings reflect a split between refining and marketing
HPCL’s average gross refining margin for April–September 2026, the first half of fiscal 2027, reached $27.89 per barrel, compared with $5.95 a year earlier. These are half-year figures, rather than margins for the second quarter alone.
The company said those margins were calculated before the impact of Special Additional Excise Duty and Road & Infrastructure Cess on exports of selected petroleum products. They therefore should not be read as the final earnings contribution from each barrel processed.
HPCL said suppressed marketing margins on certain petroleum products hurt first-half profitability amid the West Asia conflict. State-run oil marketing companies were selling petrol, diesel and liquefied petroleum gas below market rates to cushion consumers from volatile prices.
| Item | Details |
|---|---|
| Q2 FY27 consolidated total income | Approximately ₹1.40 lakh crore, versus ₹1.46 lakh crore in Q1 FY27 and ₹1.11 lakh crore in Q2 FY26. |
| Q2 FY27 consolidated total expenses | Approximately ₹1.33 lakh crore, versus ₹1.64 lakh crore in Q1 FY27 and ₹1.06 lakh crore in Q2 FY26. |
| First-half foreign-currency losses | ₹313.80 crore in April–September 2026, compared with ₹798.18 crore a year earlier. |
| First-half capital expenditure | ₹3,819 crore in April–September 2026. |
Unrecognised LPG shortfall reaches ₹18,049 crore
HPCL disclosed a cumulative negative buffer, described as unrecognised, of ₹18,048.82 crore on below-market LPG cylinder sales at September 30, 2026. That compared with ₹12,798.67 crore at March 31, 2026 and ₹14,240.64 crore a year earlier.
The balance increased by approximately ₹5,250 crore over the first half. It is a cumulative unrecognised amount, not a separately reported second-quarter expense, and should not be treated as interchangeable with the quarterly net profit figure.
The exposure sits within a large consumer-facing business. HPCL’s retail and LPG distribution network included 25,238 retail outlets and 6,391 LPG distributorships as of June 30, 2026, illustrating the scale of its fuel-marketing operations.
Full refinery utilisation supports higher sales
HPCL processed 6.20 million tonnes of crude during Q2 FY27, operating at 100% of capacity. Sales, including exports, increased 5.5% year over year to 12.73 million tonnes.
Quarterly capital expenditure was ₹2,085 crore, focused on strengthening refining and marketing infrastructure and improving operating efficiency. Separately, Project Samridhi 2.0, the company’s EBITDA improvement programme, generated first-half accruals of ₹327 crore, equivalent to about $0.18 per barrel.
The operating figures show that higher throughput and sales alone did not determine profitability: the improvement in refining economics was partly countered by pressure on fuel-marketing margins.
Conclusion
HPCL returned to quarterly profit, but stronger refining margins did not eliminate pressure from below-market fuel sales. The next reporting period will show whether that recovery holds and whether the cumulative LPG shortfall continues to grow.
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