Hindustan Petroleum witnessed a 25% decline in its consolidated net profit for the last quarter of FY24, dropping to Rs 2,709.31 crore from Rs 3,608.32 crore in the same period the previous fiscal.
The net profit fell due to a decline in the company’s gross refining margins on the back of high crude oil prices coupled with the latest reduction in the retail prices of auto fuels by the corporation. On a sequential basis, the net profit rose from Rs 712.84 crore in Q3FY24.
Revenue from product sales increased by 6% to Rs 1.21 trillion during the period, with total income also rising to Rs 1.22 trillion, up 6% from Rs 1.15 trillion in Q4FY23.
The operating margin fell to 2.79% in the quarter under review from 4.08% in the same period the previous fiscal. For the full year, the consolidated net profit stood at Rs 16,014.61 crore, compared to a loss of Rs 6,980.23 crore in FY23.
The state-owned oil marketing company’s average Gross Refining Margin (GRM) during the year ended March 31 declined to $9.08 per barrel as against $12.09 per barrel during the corresponding period of previous fiscal.
“This is before factoring-in the impact of Special Additional Excise Duty and Road & Infrastructure Cess levied, effective July 1, 2022, on export of select petroleum products,” the company said.
HPCL saw an increase in its domestic sales as well as exports in Q4FY24. While dometic sales increased 8% to 11.80 million tonnes, exports rose to 0.53 million tonnes, up 179% on year. Crude throughput also increased to 5.84 million tonnes during the period from 4.96 million tonnes in Q4FY23.
The company’s board of directors has recommended issuance of one bonus equity shares (of Rs 10 each) for every two equity shares held (of Rs 10 each), subject to approval by the shareholders. The Record Date for the bonus issue is set for June 21.
It has also recommended the final dividend of Rs 16.50 (pre-bonus) per equity share with a face value of Rs 10. This translates into a final dividend of Rs 11 (post-bonus) per equity share with a face value of Rs 10 for FY24.“This is in addition to the interim dividend of Rs 15 (pre-bonus) per equity share paid during the year by the Corporation,” HPCL said in an exchange filing.
The state-owned oil marketing companies including HPCL have cut auto fuel prices by Rs 2 per litre, first time after April 2022. After the reduction, the gross marketing margin hit to OMCs was estimated to be around Rs 1.6-1.7 per litre with petrol at Rs 5.0 per litre and diesel at Rs 1.4 per litre, according to analysts at Emkay Global.
Coupled with this was the rise in global crude oil prices which crossed $90 per barrel last month on the back of increased geopolitical tensions between Iran and Israel.
Elevated crude prices have raised fresh concerns about OMC’s profitability, and ability to keep the aggressive capital expenditure plans going forward.
