HPCL Q3 Results Review – Earnings Improve On Better Marketing Margins: Yes Securities

BQ Prime’s special research section collates quality and in-depth equity and economy research reports from across India’s top brokerages, asset managers and research agencies. These reports offer BQ Prime’s subscribers an opportunity to expand their understanding of companies, sectors and the economy.

Hindustan Petroleum Corporation Ltd.’s Q3 FY23 reported Ebitda stood at Rs 16.7 billion (down 11% YoY; down 212% QoQ), better than our and street estimates as marketing margins possibly stood better than our estimates.

HPCL doesn’t declare marketing margins. The gross refining margin at $9.14/barrel of oil however stood marginally below our assessment. The sequential improvement in earnings stemmed from QoQ recovery in petrol and diesel retail margins to ~ Rs 10/litre (Q2: Rs (0.04)/ltr) and Rs (5.5)/ltr (Q2: Rs (12)/ltr), as global product price moderated, however firm high speed diesel cracks helped sustain gross refining margins.

As we write while petrol margins have moderated to Rs 6.5/ltr, the loss on retailing of diesel has also narrowed to Rs (3-4)/ltr. We expect retail marketing to normalise over FY24-25E.

Click on the attachment to read the full report:

DISCLAIMER

This report is authored by an external party. BQ Prime does not vouch for the accuracy of its contents nor is responsible for them in any way. The contents of this section do not constitute investment advice. For that you must always consult an expert based on your individual needs. The views expressed in the report are that of the author entity and do not represent the views of BQ Prime.

Users have no license to copy, modify, or distribute the content without permission of the Original Owner.