HPCL Q1 net profit up 30% to Rs 2098 crore

State-run Hindustan Petroleum Corporation Ltd (HPCL) has posted a 30 per cent increase in its net profit for the first quarter (Q1) of the current financial year (FY) to Rs. 2,098.38 crore, against Rs. 1,614.13 crore during the same period of the last FY.

“We posted the highest ever Q1 profit during this quarter.  The increase in profit is primarily on account of growth in volumes, stable refining margin and inventory gains,” said M K Surana, chairman and managing director of HPCL, while addressing the media. 

On the other hand, the company’s net revenue fell 5.7 per cent to Rs. 51,661.04 crore, compared to Rs. 54,822 crore during the Q1 of the previous FY. However, the company’s average gross refining margin during the quarter ended June 30,2016 was $6.83 per barrel, compared to $8.56 per barrel against Q1 of the previous FY.

The main drivers of growth in profit included a higher throughput of refineries, which zoomed by 19 per cent to 4.48 million tonne (MT) during the quarter, compared to 3.75 MT of corresponding period during the previous FY. The company’s domestic market sales too have increased to 8.85 MT, an increase of 4.5 per cent over previous year corresponding sales of 8.46 MT. Petrol sales increased 7.9 per cent, diesel by 3.7 per cent, aviation turbine fuel by 9.8 per cent, lubes by 21.5 per cent and that of bitumen by 27.1 per cent over previous FY’s Q1 volumes.

The company’s board has approved the Visakh refinery's expansion project at a capital cost of Rs 20,928 crore, increasing the capacity from 8.33 million metric tonne per annum (MMTPA) to 15 MMTPA. Surana added that the Vizag project will be completed by 2020. The company is also in the process of expanding its capacity in Mumbai refinery from 7.5 MMTPA to 9.5 MMTPA at a investment of Rs 4000 crore, which will be completed by 2019.

In July, the company has again started importing crude from Iran, which was halted due to sanctions from western countries. "In July, we have imported 1 million barrels of Iranian crude and this will be increased to 1.75 million barrels in August. We have already cleared the dues to Iran on oil payments via Union Bank of India through Turkey-based Halkbank,” said B K Namdeo, director-refineries, HPCL.

Under the direct benefit transfer of LPG (PAHAL) scheme, about 4.65 crore of HPCL customers joined the initiative, while 30.29 lakh customers voluntarily gave up LPG subsidy under #GiveItUp campaign. The company also plans to add 1.5 crore connections in the next three years under the Pradhan Mantri Ujjwala Yojana, which provides clean cooking medium to women below poverty line.