Pick of the Week

14th May 2025

Hindustan Petroleum Corp.

BSE: 500104 | NSE: HINDPETRO

Recommendation Time Period Current Price Target Price Potential Upside

BUY 12 months 395.4/- 455.0/- 15.0%

Hindustan Petroleum Corporation Ltd (HPCL) is one of the largest public sector enterprises under the administrative
s
control of the Ministry of Petroleum & Natural Gas; and is accorded the ‘Maharatna’ status. The company has a strong
presence in the petroleum refining and marketing sector and is also the largest distributor of industrial and automotive
lubricants in the country.

Key Investment Rationale:

 Record Operational & Marketing performance in FY25: During 4QFY25/FY25, the company’s refineries recorded
highest-ever quarterly/annual throughput at 6.7/25.3 million metric tonnes (mnt); up 15.4%/13.2% YoY respectively.
GRM for 4QFY25 stood at USD 8.44 per barrel vs USD 6.95 per barrel in 4QFY24. Quarterly sales volume stood at 12.7
mnt, up 3.0% YoY while the annual domestic sales came in at record high of 49.8 mnt, up 6.4% YoY. FY25 domestic
sales growth stood at 5.5% beating the industry growth of 4.2%, resulting in a market share gain of 0.25%.
 Capex cycle nearing completion: The company’s large and challenging capex cycle is nearing completion as majority
of its marquee projects are expected to be commissioned by 2QFY26 meaning a positive impact on the future
earnings. During FY25, the company spent ~Rs 14,500 cr in capex. For FY26, a capex of ~Rs 13,000 cr – Rs 14,000 cr
will be incurred meant particularly for the completion of ongoing projects.
 Network expansion continues to be the key focus area: During FY25, the company commissioned 1,725 new retail
outlets increasing the total network to 23,747 outlets. Following on a similar trend, HPCL added 29 new LPG
distributors to its network taking the total tally to 6,378 distributors. Going ahead, the company has indicated retail
network expansion to be its key focus area for attaining growth along with increasing throughput and pushing bulk
sales.
 Robust 4QFY25 performance: The company recorded strong numbers in 4QFY25 with Standalone EBITDA/PAT
coming in at Rs 5,804 cr/Rs 3,355 cr marking a YoY growth of 20.8%/18.0% respectively despite a de-growth of 4.4%
YoY in Revenue. This was led by record highest sales volumes and market share gain. At current price of Rs 395.4, the
stock trades at FY26E/FY27E Bloomberg consensus P/E multiple of 8.9x/8.2x respectively.

Key risks: Volatility in crude prices; Delay in ramping up utilization of new capacities; Global trade uncertainties
Pick of the Week

Financial Summary
Particulars (Rs cr) FY24A FY25A FY26E FY27E

Net Sales 4,33,524.9 4,33,728.1 4,03,372.8 4,21,124.2

EBITDA 24,839.0 16,606.0 19,316.4 21,438.1

Net Profit 14,693.8 7,364.9 9,229.3 10,315.2

EBITDA Margin (%) 5.7 3.8 4.8 5.1

EPS (Rs) 69.1 34.6 44.2 48.3

RoE (%) 35.8 16.0 19.0 18.4

P/E (x) 5.7 11.4 8.9 8.2

P/BV (x) 2.1 1.8 1.4 1.2

Source: Bloomberg Estimates

Stock Performance (2-Year) – Indexed to 100

300
260
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140
100
60
20
Dec-23

Dec-24

May-25
May-23
Jun-23

Mar-24
Oct-23
Nov-23

Apr-24
May-24
Jun-24

Oct-24

Apr-25
Aug-23

Jan-24

Aug-24

Jan-25

Mar-25
Jul-23

Sep-23

Feb-24

Jul-24

Sep-24

Nov-24

Feb-25

HPCL Ltd Nifty 200

Source: Ace equity, SSL Research

Recommendation History

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Disclaimer
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The Analysts engaged in preparation of this Report or his/her relative:-
(a) do not have any financial interests in the subject company mentioned in this Report; (b) do not own 1% or more of the equity securities of the subject
company mentioned in the report as of the last day of the month preceding the publication of the research report; (c) do not have any material conflict of
interest at the time of publication of the Report.
The Analysts engaged in preparation of this Report:-
(a) have not received any compensation from the subject company in the past twelve months; (b) have not managed or co-managed public offering of
securities for the subject company in the past twelve months; (c)have not received any compensation for investment banking or merchant banking or
brokerage services from the subject company in the past twelve months; (d) have not received any compensation for products or services other than
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or other benefits from the subject company or third party in connection with the Report; (f) has not served as an officer, director or employee of the subject
company; (g) is not engaged in market making activity for the subject company.

Name Qualification Designation

Sudeep Shah MMS-Finance DVP- Technical & Derivative Research
Sunny Agrawal B.E, MBA (Finance) DVP - Fundamental Research
Rajesh Gupta PGDBM (Finance), MA (Bus. Eco) AVP - Fundamental Research
Monica Chauhan C.A. Research Analyst - Equity Fundamentals
Harsh Vasa CA Research Analyst - Equity Fundamentals
Sumeet Shah B.E., CFA Research Analyst - Equity Fundamentals
Sweta Padhi MBA (Finance) Research Analyst - Equity Fundamentals
Uday Chandgothia B-Tech, MBA (Finance) Research Associate - Equity Fundamentals
Arnav Sane BMS (Finance) Research Associate - Equity Fundamentals
Shubham Purohit BMS (Finance) Research Associate - Equity Fundamentals
Gautam Updhyaya MBA (Finance) Research Analyst - Equity Derivatives
Vinayak Gangule BE (IT) Research Analyst - Equity Technicals
Ashwin Ramani B.Com Research Analyst- Equity Technicals
Sagar Peswani B.Tech (ECE) Research Associate - Equity Technicals
Kalpesh Mangade B.Com MIS Analyst - Retail Research

For other Disclosures please visit: https://bit.ly/R_disclaimer02

Sunny Agrawal Sudeep Shah

DVP – Fundamental Research DVP – Technical & Derivative Research