Hindustan Petroleum Corp Ltd. surprised most with a relatively strong March 2026 quarter, reporting robust refining margins while marketing was boosted by inventory gains. However, despite the strong result, brokerages are not too confident about the company's near-term prospects.
After calling HPCL's Q4 earnings a 'positive surprise', Citi, for one, has cut the target price on the counter, lowering it from Rs 595 to Rs 485. The brokerage did maintain a 'buy' rating on the stock, but acknowledged there could be near-term pain as the oil marketing company continues to bear the brunt of elevated crude prices emanating from the Iran war.
Meanwhile, Macquarie has maintained an 'outperform' rating on HPCL with an unchanged target price of Rs 510. The brokerage firm has called it a stable quarter, but much like Citi, it acknowledged that the near-term headwinds will remain.
ALSO READ: HPCL Q4 Results: PSU Declares Dividend, Net Profit Jumps 20% — Check Record Date
Citi, though, believes the duration of these headwinds will be key, meaning an early end to the Iran war could greatly benefit the company. Even if the war continues, the brokerage is keeping a close tab on Petroleum Minister Hardeep Singh Puri's recent comments, where he hinted that fuel price hikes could be likely.
Macquarie estimates that India's oil marketing companies like HPCL are losing Rs 18 per litre on the sale of petrol and Rs 35 per litre on the sale of diesel. If this continues, HPCL could be staring at tough times, which is where fuel price hikes or an early end to the Iran war could prove to be key.
The management of HPCL, for its part, confirmed in the earnings call that the company is buying more Russian crude in order to lower offset rising energy costs.
ALSO READ: HPCL Is Buying More Russian Oil To Offset Rising Energy Costs
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