Why Brokerages Remain Positive on HPCL After Q2FY26
About HPCL and sector context
Hindustan Petroleum Corporation Ltd. (HPCL) is a leading integrated oil marketing and refining company in India. The company operates large refining assets, a wide retail network, and a strong marketing franchise. In Q2FY26, HPCL benefited from resilient refining margins and steady retail volumes, which have drawn positive reactions from several brokerages.
Q2FY26 financial highlights
| Metric | Q2FY26 | YoY / Note |
|---|---|---|
| Revenue | ₹1.19 Lakh Cr | +8% YoY |
| EBITDA | ₹6,900 Cr | +15% YoY |
| PAT | ₹4,500 Cr | +20% YoY |
| Gross Refining Margin (GRM) | US$10.1 / bbl | Strong vs peers |
Brokerages view the robust GRM and stable marketing volumes as the primary drivers for HPCL’s near-term profitability. For indices-aware traders, our F&O Strategy note provides contextual setups that often correlate with energy-sector momentum.
Brokerage commentary
- Nomura — Maintain Buy, target ₹510; highlights stronger-than-expected GRM and marketing execution.
- Morgan Stanley — Maintain Overweight, target ₹533; core PAT and refining performance beat estimates.
- Both brokerages note stable net debt and expect refining margin tailwinds to support FY27 estimates.
Peer comparison & valuation
| Company | CMP (₹) | P/E (x) | EV/EBITDA (x) | ROE (%) |
|---|---|---|---|---|
| HPCL | ₹492 | 6.8 | 4.5 | 19.2 |
| BPCL | ₹494 | 7.2 | 5.0 | 18.4 |
| IOCL | ₹148 | 6.1 | 4.2 | 16.9 |
SWOT Analysis
| Strengths | Weaknesses | Opportunities | Threats |
|---|---|---|---|
| Large refining capacity with integrated operations and strong retail presence. | Sensitivity to crude price volatility and exposure to LPG under-recovery risks. | Growth in domestic fuel consumption and downstream petrochemical diversification potential. | Macro shocks to crude, regulatory price controls, and currency swings affecting margins. |
Investment verdict
HPCL’s Q2 performance underlines resilient refining economics and solid marketing execution. Brokerages expect GRM strength to persist into FY27, supporting earnings visibility. The company’s leverage profile is manageable and cash flows remain robust.
Verdict: Buy for a medium-term (6–12 months) horizon for investors focusing on refining-margin recovery and stable dividend prospects. Traders wanting correlated index exposure can refer to our BankNifty Intraday Tip updates to align tactical entries with energy-sector momentum.
Investor Takeaway
Indian-Share-Tips.com Nifty Expert Gulshan Khera, CFP®, who is also a SEBI Regd Investment Adviser, notes that HPCL’s operational strength and balanced leverage make it a compelling pick among OMCs for the medium term. Monitor GRM trends and policy updates on LPG under-recoveries before adding sizeable exposure.
Discover more insights at Indian-Share-Tips.com, which is a SEBI Registered Advisory Services.
Related Queries on Oil Marketing Stocks
- What are HPCL’s growth drivers for FY27?
- How do GRMs impact oil marketing company valuations?
- Is HPCL a better pick than BPCL and IOCL?
- What is the long-term outlook for refining margins in India?
SEBI Disclaimer: The information provided in this post is for informational purposes only and should not be construed as investment advice. Readers must perform their own due diligence and consult a registered investment advisor before making any investment decisions. The views expressed are general in nature and may not suit individual investment objectives or financial situations.
