HPCL prepares for a challenging start to FY27; Here are key takeaways from its earnings call

State-run oil refiner Hindustan Petroleum Corporation Ltd. (HPCL) is preparing for a challenging start to financial year 2027. The company, by diversifying its crude sourcing and through strict financial discipline, is aiming to weather the near-term headwinds and uncertainties.

Here are key takeaways from HPCL's earnings call:

Cautious Outlook For Q1

HPCL expects the ongoing quarter to be "very tough", stating that there are likely to be losses for the company. It did not provide any specific forward-looking guidance due to the prevailing uncertainties.

The management said that the right decisions will be taken at the right time to manage these losses effectively.

Dynamic Crude Sourcing & Supply Security

HPCL said on the earnings call that it has ensured two months of secured crude supply at any given time, meaning that the current coverage extends till July.

While the company typically splits sourcing equally between term contracts and the spot market, the West Asia crisis has prompted a significant shift toward spot contracts and Russian crude

The management emphasized that crude remains available through multiple global avenues, such as the term agreements with South American and African partners, who have been unaffected by the regional crisis.

Deleveraging Of Balance Sheet

HPCL has reduced its total debt to ₹47,599 crore through working capital management and curtailed capex over the last one year.

The company also successfully refinanced its debt, specifically reducing forex-denominated debt by $200–300 million. Management believes this financial cushion is vital for navigating the current "uncertain times".

Fiscal Pressures & Government Support

HPCL's performance in the fourth quarter was aided by inventory gains, although the company faced significant pressure from LPG under-recoveries amounting to ₹1,350 crore.

The impact of this was largely mitigated by a ₹3,300 crore package from the government.

Shares of HPCL ended 5.5% higher on Wednesday after the results announcement at ₹390. The stock is still down 22% so far in 2026.