Hindustan Petroleum reported a sharp decline of 90% in its consolidated net profit for the Q1FY25, amounting to Rs 634 crore compared to Rs 6,765.5 crore in the corresponding period of the previous fiscal year.
The net profit also declined by 76.6% sequentially from Rs 2,709.31 crore in the fourth quarter of FY24, due to a reduction in the company’s gross refining margins. Furthermore, the reduction in fuel prices impacted the company’s marketing margins. The state-owned oil marketing companies had earlier cut auto fuel prices by Rs 2 per litre, the first reduction since April 2022.
The company’s revenue from product sales registered a marginal increase of 1% during the period, reaching Rs 1.20 trillion. Total income stood at Rs 1.21 trillion, almost unchanged from Rs 1.19 trillion in Q1FY24.
Operating margin fell to 0.82% in the quarter under review from 7.53% in the same period the previous fiscal year.
The state-owned oil marketing company’s average gross refining margin (GRM) during the year ended June 30 declined to $5.03 per barrel, compared to $7.44 per barrel during the corresponding period of the previous fiscal year. “This is before factoring in the impact of Special Additional Excise Duty and Road & Infrastructure Cess levied, effective July 1, 2022, on the export of select petroleum products,” the company said.
HPCL saw an increase in its domestic sales as well as exports in Q1FY25. Domestic sales increased by 5.6% to 12.07 million tonnes, while exports rose to 0.56 million tonnes, up 33% year-on-year. Crude throughput also increased to 5.76 million tonnes during the period from 5.40 million tonnes in Q1FY24.
After the reduction in auto fuel prices by Rs 2 per litre, the gross marketing margin impact on OMCs was estimated to be around Rs 1.6-1.7 per litre, with petrol at Rs 5 per litre and diesel at Rs 1.4 per litre, according to analysts at Emkay Global.