HPCL raises core capex guidance for five years: Jefferies

In its analyst meet on Friday, HPCL management raised its standalone capex guidance significantly to R53,400 crore over FY17-21 vs R31,000 crore over FY16-20 earlier.

Majority of the capex increase appears to be in the marketing segment which management attributed to new LPG bottling plants, lube blending plants and product pipelines.

While some miss against planned timelines are likely, the new capex plans imply priority to reinvestment over balance sheet improvement.

In its analyst meeting on Friday, HPCL management significantly raised its core capex guidance for the next 5 years. Total capex over FY17-21 was guided at R55,800 crore which includes R2,400 crore towards JVs, implying standalone capex of R53,400 crore.

Investment in marketing business in particular was raised from R9,000 crore earlier to R26,000 crore. Management is targeting to complete both Mumbai (from 6.5MMTPA to 9.5MMTPA)

and Vizag (from 8.3MMTPA to 15MMTPA) refinery expansions by April 2020 in line with BS-VI roll out deadline of the government.

Hindustan Petroleum Corporation Ltd.(HPCL)