HPCL Stock Soars As Oil Prices Fall On Growing Demand Concerns; BPCL, IOC Gain Too

The share price of downstream oil refiner Hindustan Petroleum Corporation Ltd. (HPCL) gained 6.84% at Rs 297.70 per share at 10:55 am IST on Wednesday after crude oil prices slipped more than 4% on Tuesday.

The HPCL stock has now rallied consecutively for the ninth day, the longest gaining streak for the energy stock since May this year. Earlier, in May HPCL shares posted gained for 11 trading sessions in a row. On Wednesday, shares of other companies like BPCL and IOC also traded in the green zone following a relief in global oil prices.

The share price of Bharat Petroleum Corporation Limited (BPCL) was up 3.09% at Rs 384.20 per share at 11:18 am IST today, while Indian Oil Corporation Limited (IOCL) was up 0.54% at Rs 104.60 per share at 11:21 am IST.

On Tuesday, Oil prices fell over 4% to their lowest since late July, as mixed Chinese economic data and rising OPEC exports cooled off fears about tight markets amidst a strong US Dollar. Brent crude futures ended below $84 for the first time since the conflict between Hamas and Israel started on October 7. The global benchmark ended 4.2% lower at $81.61 per barrel, while US West Texas Intermediate (WTI) crude futures closed 4.3% lower at $77.37 per barrel

Hindustan Petroleum Corporation Limited Q2 Performance

Recently, HPCL reported the highest-ever Half-Yearly Consolidated Profit after Tax (PAT) of Rs 12,592 crore during Apr-Sep 2023 (Consolidated Net Loss of Rs 11,033 crore during the corresponding period of the previous year). Standalone PAT during this period was also highest ever at Rs 11,322 crore as compared to Standalone Net Loss of Rs 12,369 crore during the corresponding period of the previous year.

To strengthen Refining & Marketing infrastructure HPCL has invested Rs 7,196 crore during Apr-Sep 2023 (including equity investment in its JVCs and subsidiaries).

HPCL refineries processed the highest ever quarterly crude thru-put of 5.75 Million Metric Tonnes (MMT) during Jul-Sep 2023 (operating at 111.6%) registering a growth of 28% over 4.49 MMT crude processed during the corresponding period of the previous year.

The company's gross refining margin for the quarter stood at $13.3 per barrel, which was higher by $5.9 compared to the June quarter and $4.9 from last year.

HPCL Brokerage call:

Following the company's earnings and the management commentary, many brokerages are optimistic about HPCL's prospects. According to CNBCTV 18, ICICI Securities has upgraded the company's financial year 2024 and 2025 Earnings per Share (EPS) estimates by 122% and 17% respectively.

While Nomura has maintained a "Neutral" stand on the stock with a price target of Rs 305.