HPCL share price falls after Q1 results; Should you buy, sell or hold? Check out what brokerages recommend

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₹6,765.5 crore in the first quarter of the fiscal year 2023-24 as compared to a net loss of ₹8,557 crore in the same period last year. The company’s net profit increased by 87.5% from ₹3,608.3 crore in the quarter ending March 2023. HPCL’s revenue fell to ₹1.18 lakh crore in Q1FY24 from ₹1.21 lakh crore a year ago.

The company’s average gross refining margin (GRM) stood at $7.44 per barrel in the quarter, dipping by $6.6 per barrel QoQ and $9.25 per barrel YoY. Refining margin declined primarily because of a fall in diesel and ATF spreads. Read here: HPCL Q1 results: Net profit comes in at ₹6,765.5 crore in June quarter HPCL Q1 results were largely in-line with most brokerages’ estimates.

Here’s what brokerages recommend on HPCL shares and HPCL Q1 results: Global brokerage Jefferies believes HPCL’s earnings peaked with a narrowed discount on Russian crude offsetting strength in margin. It said that the valuations were above historical averages. The brokerage, hence, maintained ‘Underperform’ rating on the stock with a target price of ₹225 per share.

HPCL’s QoQ improvement was driven by higher refining throughput, strong marketing volumes and a 2x improvement in blended marketing margin (aided by retail fuel margin of ₹8.7 per litre, up 3.6x QoQ. Overall, FY24E and FY25E are likely to see stronger recovery with sharp increase in refining throughput, led by the commissioning of ~7mtpa Vizag refinery and ~9mtpa Rajasthan refinery (50% share), ICICI Securities said. The brokerage firm builds in a more conservative marketing margin profile for the rest of FY24E, continued strength in GRMs, steady volume growth for both refining and marketing and an improving balance sheet, coupled with still very attractive valuations.