Hindustan Petroleum Corporation Limited (HPCL) has posted an impressive 18% year-on-year (YoY) increase in its profit after tax (PAT) for Q4 FY25, with net profits reaching ₹3,355 crore. This marks a solid finish to FY25 despite facing challenges like declining refining margins. Here’s a closer look at the financial highlights and what they mean for investors.
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Financial highlights: Q4 FY25
| Metric | Q4 FY25 | Q4 FY24 | Change (%) |
| Sales volume | 12.70 million MMT | 12.35 million MMT | +3% |
| Net sales | ₹1,08,933 crore | ₹1,14,276 crore | -4.42% |
| Profit Before Tax (PBT) | ₹4,304 crore | ₹3,306 crore | +29.96% |
| Gross Refining Margins (GRMs) | $5.74 per barrel | $9.08 per barrel | -36.3% |
| Crude throughput | 6.74 million MMT | 5.84 million MMT | +15.4% |
| Net profit (PAT) | ₹3,355 crore | ₹2,842 crore | +18% |
HPCL’s robust profit growth is especially notable as it continues to battle challenges such as falling refining margins and a tough global oil market. Despite these, the company’s steady rise in crude throughput and its strong sales volume helped cushion the impact.
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Business performance and outlook
- Crude throughput: HPCL set a new record with its highest-ever crude throughput of 6.74 million metric tonnes (MMT), an increase of 15.4% compared to the same quarter last year. This growth highlights the company’s ability to handle more crude oil, which is crucial for its refining business.
- Sales volume growth: HPCL saw a solid 3% YoY growth in sales volume, reaching 12.70 MMT. This signals a strong domestic market performance, especially with a 5.5% growth in domestic sales, which outpaced the industry average of 4.2%.
- Refining margins: Gross refining margins (GRMs), however, took a hit, falling to $5.74 per barrel from $9.08 last year. This reflects a broader industry trend of declining margins, largely due to fluctuating crude prices and market volatility.
Dividend announcement
HPCL’s board has announced a final dividend of ₹10.50 per share for FY25, which will be payable to shareholders who are eligible as of the record date of August 14, 2025. This is a sign of confidence in the company’s ongoing performance, especially given the strong profit growth and the solid cash flows from its refining and marketing operations.
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Full-year performance
For the entire financial year ending March 31, 2025, HPCL reported impressive numbers:
- PAT: ₹3,415 crore, marking a significant 26% increase from the previous fiscal year.
- Total income: ₹1,19,126 crore, a slight dip of 2.7% YoY, mainly due to lower international sales and refining margins.
- Record refinery throughput: 25.27 million MMT, driven by strong operations at both the Mumbai and Visakh Refinery.
The negative buffer
Despite the positive performance, HPCL has reported a negative buffer of ₹10,894 crore. This is due to the price gap between the market-determined price of LPG cylinders and the subsidised price that consumers pay. The Ministry of Petroleum and Natural Gas has instructed oil companies like HPCL to keep this buffer in a separate account for future adjustments.
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Analyst perspectives
- Brokerage views: HPCL’s strong performance in terms of throughput and domestic sales is encouraging, though declining GRMs and the ongoing LPG price buffer remain areas of concern. Analysts have expressed optimism about the company’s long-term growth but caution that refining margins may continue to impact performance in the near term.
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Conclusion
HPCL’s Q4 FY25 results show strong growth in key areas like PAT and throughput, with a record performance in refining operations. The company’s dividend announcement is a positive signal for investors, reflecting its solid cash position and strong market presence.
However, challenges like refining margin pressures and the negative LPG buffer could weigh on future performance. As the company continues to manage costs and grow its core business, HPCL remains a key player to watch in the energy sector.
