HPCL Reports Earnings Recovery in Q2FY27 as Refining Performance Improves and HRRL Ramp-Up Accelerates

By:- Aditya Arora, Research Analyst, Mirae Asset Sharekhan

 HPCL reported a sharp earnings recovery in Q2FY27, with EBITDA rebounding to Rs9,075cr from a loss in Q1FY27, driven by stronger refining performance and an improvement in marketing margins. GRM improved to US$32.2/bbl, supported by favorable inventory effects following Q1 mark-to-market losses, lower crude procurement costs and strong operating performance during July-August. Key takeaways from the concall include the faster-than-expected ramp-up of HRRL, which is expected to be PBT-positive in October, and refinancing the project’s debt at ~105bps lower rates. The Vizag residue upgrade remains a key long-term earnings driver, although the current benefits are materially below the targeted US$2-3/bbl uplift. Near-term monitorable include rising LPG under-recoveries of Rs245/cylinder in October and Rs327/cylinder in November, alongside heightened volatility in crude sourcing.