HPCL sees two-fold jump in net profit in Q2, okays Rs 2,500-cr buyback
Hindustan Petroleum Corp (HPCL) on Wednesday reported a twofold jump in its second quarter (July-September 2020, or Q2) net profit on the back of a surge in refining margins and inventory gains, and announced a Rs 2,500-crore share buyback plan as the management said it felt the share price was lower than the value it deserves.
Net profit was Rs 2,477 crore compared to Rs 1,052 crore a year back, HPCL Chairman and Managing Director Mukesh Kumar Surana told reporters on a call. "The significant improvement in the profitability in spite of challenges including lockdown due to Covid-19 pandemic was a result of strategic planning in refinery and marketing operation, containing the contraction to less than the industry, efficient inventory management and effective production placement," he said. Gross sales revenue at Rs 61,340 crore was lower than Rs 66,165 crore of Q2 of the previous financial year due to lower oil prices.
The firm earned $5.11 on turning every barrel of crude oil into fuel in the second quarter of 2020-21 fiscal year as compared to a gross refining margin of $2.83 a barrel.
This included a $2.33 per barrel inventory gain from buying cheaper crude oil earlier and processing in Q2. This translated into Rs 1,780 crore of gain. Besides, the firm also had a forex gain of Rs 524 crore, he said.
In a stock exchange filing, the firm said it will buy back up to 100 million shares for no more than Rs 250 apiece.