HPCL shares gain up to 5% on strong Q3 post; the most optimistic target suggests 40% of the potential gains

Shares of state-run oil marketer HPCL were flat in Friday’s session after the company reported strong performance for the October-December quarter. In the December quarter, the private company’s PAT or net profit was reported at Rs 3,023 crore, up 471 percent year-on-year. The profit beat analysts’ expectations which posted Q3 profit at Rs 2,510 crore. In Q2FY25, the company’s PAT stood at Rs 631 crore.

The increase in profit (by 379% over 2QFY25, and 471% over 3QFY24) was attributed to strong physical performance and operational efficiency in both the Refining and Marketing divisions, coupled with improved margins, noted the company’s release on the exchange.

Income from operations during the review period was recorded at Rs 1,18,936 crore as against Rs 1,18,443 crore in the same period last year. In the September quarter, the company’s revenue was reported at Rs 99,413 crore.

Average GRM during 3QFY25 was $6.01 per barrel compared to $8.49 per barrel during 3QFY24, it added.

Physical activity

Further, the company added that in the nine-month period to December, the oil marketing company (OMC) recorded the highest crude production of 18.53 MMT registering an increase of 12.4 percent over the throughput of 16.49 MMT in Apr-Dec 2023.

Here’s how global brokerages view HPCL after posting its Q3 performance

Foreign broker Morgan Stanley is bullish on the stock and has set the stock target at Rs 506, implying potential gains of around 40 percent. As per the brokerage, the company reported a strong Q3 beat against its core PAT estimates at Rs 4,700 crore. It pointed out that the growth in marketing value of 8 percent YoY continued the good growth of the industry. Gross margin of US$9.3/bbl (includes US$3.7/bbl of LPG losses) was also above its estimates.