Hindustan Petroleum Corporation Ltd. (HPCL) on Wednesday posted its highest-ever quarterly and annual profit, but warned that the ongoing quarter could turn loss-making as the full impact of the West Asia conflict, crude oil price surge and supply disruptions begins to hit earnings.
The state-run oil retailer reported a 46 per cent rise in standalone net profit for the January-March quarter of FY26 at ₹4,901.50 crore, compared with ₹3,354.98 crore in the corresponding period last year.
For the full financial year 2025-26, standalone net profit more than doubled to a record ₹17,175.23 crore from ₹7,271.32 crore in FY25, surpassing its previous all-time high profit of ₹14,694 crore recorded in FY24.
The strong earnings came on the back of healthy refining and marketing margins, record refinery throughput and higher fuel sales before the full impact of the war-driven disruption in global energy markets hit operations.
However, HPCL Chairman and Managing Director Vikas Kaushal warned that the April-June quarter of FY27 “is expected to be tough” and the company may post losses as crude prices remain elevated and supply chains continue to face disruptions.
“There will be losses in the first quarter… the situation is too volatile to give any sort of guidance,” Kaushal said during the company’s post-earnings analyst call.
The current quarter is expected to fully reflect the impact of the West Asia conflict that erupted after the US and Israel attacked Iran on February 28, triggering retaliation by Tehran and disruptions around the Strait of Hormuz, a key route for global oil and LNG supplies.
Despite the difficult environment, HPCL said it maintained adequate crude inventories and diversified sourcing to avoid supply disruptions.
“At no point of time were we not covered with two months of supply of crude oil. We are now ramping up supply for July,” Kaushal said, adding that crude oil purchases had become significantly more expensive.
Geopolitical Pivot
The company said it restarted crude purchases from Russia after supplies from traditional suppliers such as Iraq were impacted due to the disruption in Hormuz-linked trade routes. HPCL also sourced crude from Africa, the US and Venezuela while increasingly depending on spot market purchases as contracted cargoes faced disruptions.
“Geopolitical uncertainty is all around us. Crude prices have gone high. Product availability has been challenging and our forex have had challenges,” Kaushal said.
Impact of Frozen Retail Prices
HPCL’s gross refining margin (GRM) during the March quarter jumped to USD 8.79 per barrel compared with USD 5.74 per barrel a year earlier, supporting profitability despite mounting losses on petrol, diesel and LPG sales during March.
The company, along with Indian Oil Corporation (IOC) and Bharat Petroleum Corporation Ltd (BPCL), continued to sell petrol, diesel and domestic LPG below cost as retail fuel prices remained frozen despite a sharp rise in global crude oil prices after the West Asia conflict.
HPCL said refinery throughput during FY26 rose 3 per cent year-on-year to a record 26.04 million tonnes, while fuel marketing sales volumes increased 3.3 per cent to 51.45 million tonnes.
Refineries processed 6.43 million tonnes of crude during the March quarter, while four new crude grades were processed during the quarter, taking the total number of crude grades processed during FY26 to 52.
The company’s board recommended a final dividend of ₹19.25 per equity share in addition to an interim dividend of ₹5 per share already paid during FY26.
HPCL’s capital expenditure during FY26 stood at ₹15,705 crore, focused on expanding refining and marketing infrastructure, adding new capacities and improving operational efficiencies across subsidiaries and joint ventures.
On the fire incident at the under-commissioning Rajasthan refinery project, Kaushal said restoration work was underway and commissioning activity was expected to restart within the next couple of weeks.
