Hindustan Petroleum Corporation (HPCL) fell 0.63% to Rs 230.4 after the company said the whole oil industry witnessed general fall in demand for petroleum products in the aftermath of Covid19 pandemic.
The PSU OMC said the impact of COVID-19 pandemic on the physical and financial performance of the company for the year 2019-20 was lesser as the lockdown was announced only in the last week of March 2020. However, sharp fall in crude oil prices in March/April 2020 did have inventory loss impact."There was a significant fall in demand of petroleum products in April 2020 due to lockdown in the country and sales was down by over 48.5% as compared to April 2019. However, with the relaxations announced by the central government and some of the state governments related to movement of people, goods and services, the demand for petroleum products gradually improved subsequently. Sales of petroleum products in May 2020 was about 77% compared to May 2019 and sales in June 2020 was about 91% as compared to June 2019. MS, HSD sales were down by 62% and 55% respectively in April 2020 compared to April 2019, which improved to about 85% in June 2020 compared to June 2019," it added.
Sharp increase in demand for LPG was witnessed during the lockdown period. The company increased the production of LPG by optimizing its operations and supplied on an average 12.5 lakh cylinders per day to the customers during April-June 2020, the company further said.
In refinery operations, by optimizing the day to day crude run rate and regulating the product procurement from other sources, the company could achieve an overall capacity utilization of almost 100% at Mumbai and Visakh refineries of the company for the period April-June 2020.
The stock has underperformed the benchmark and lost nearly 3% in last one month as compared to a 6.57% rise in Nifty 50 index.
HPCL is engaged in the business of refining of crude oil and marketing of petroleum products. It operates through two segments: downstream, and exploration and production of hydrocarbons. ONGC holds 51.11% stake in HPCL as of 31 March 2020.
HPCL's standalone net profit dropped 99.1% to Rs 26.80 crore on 2.6% decline in net sales to Rs 65,868.51 crore in Q4 March 2020 over Q4 March 2019.
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