HPCL returns to profit, but higher tax cuts year-on-year earnings
The consolidated operating margin rebounded from Q1FY27's loss-making quarter, though it remained below the Energy peer median of 12.83%.
Filed 22 Oct 2026, 16:56 IST · after market close · Hindustan Petroleum Corporation Ltd (HINDPETRO)
Key takeaways
- Consolidated net profit fell 6.07% YoY even as profit before tax rose 32.92%, as the tax rate increased 22.07 percentage points to 46.85%.
- QoQ operating margin recovered 18.20 percentage points as expense growth was -20.00% against revenue growth of -4.39%, swinging net profit from a Rs 12,264.67 cr loss to Rs 3,625.22 cr profit.
- HPCL's 6.73% operating margin was 3.35 percentage points below the 10.08% median for five Energy peers that had reported.
Price around the results
Tax surge offsets higher pre-tax profit
Year-on-year revenue growth was 33.27%, but expense growth was slightly faster at 33.36%, leaving operating margin 0.06 percentage points lower. Profit before tax still grew 32.92%, helped by other income equal to 13.70% of PBT, while interest expense rose 52.79%. The tax rate increased 22.07 percentage points to 46.85%, turning that PBT growth into a 6.07% decline in net profit.
Q2FY27 reverses the Q1 operating loss
Sequentially, revenue growth was -4.39%, but expense growth was -20.00%, driving an 18.20-percentage-point recovery in operating margin to 6.73%. Net profit therefore swung from a Rs 12,264.67 cr loss in Q1FY27 to Rs 3,625.22 cr in Q2FY27. The margin recovery has not restored the 8.01% recorded in Q4FY26 and remains below the 6.79% reported a year earlier.
Margin remains below the Energy peer median
HPCL's 6.73% operating margin was 3.35 percentage points below the 10.08% median among five Energy companies that had reported the same quarter. It ranked second from the bottom in that comparison, despite the sharp sequential recovery from a -11.47% margin in Q1FY27.
Market reaction was modest versus HPCL's history
The company filed its consolidated results after market close at 16:56 IST on 22 October, and the stock's t+0 return on 23 October was -0.73%, with volume at 2.8 times its reference level. That move was smaller than the 2.54% median absolute reaction across eight recent result events. HPCL's recent history shows five rises and three falls after results.
Q2FY27 at a glance
Consolidated figures as filed with NSE — cross-checked against an independent source.
| Line item | Q2FY27 | Q1FY27 | QoQ | YoY |
|---|---|---|---|---|
| Revenue | ₹1,34,407 cr | ₹1,40,584 cr | -4.39% | +33.27% |
| Other income | ₹935 cr | ₹648 cr | +44.17% | +30.70% |
| Expenses | ₹1,25,359 cr | ₹1,56,707 cr | -20.00% | +33.36% |
| Operating profit | ₹9,048 cr | ₹-16,122 cr | — | +32.05% |
| Operating margin (%) | 6.73% | -11.47% | — | — |
| Interest | ₹1,259 cr | ₹818 cr | +53.87% | +52.79% |
| Depreciation | ₹1,904 cr | ₹1,878 cr | +1.38% | +18.07% |
| Profit before tax | ₹6,820 cr | ₹-18,170 cr | — | +32.92% |
| Tax | ₹3,195 cr | ₹-5,905 cr | — | +151.25% |
| Net profit | ₹3,625 cr | ₹-12,265 cr | — | -6.07% |
| EPS (₹) | ₹17.04 | ₹-57.64 | — | -6.06% |
Operating margin of 6.73% compares with a Energy sector median of 10.08% across 5 peers that have reported Q2FY27.
How the stock reacted
| Window | Stock | vs NIFTY |
|---|---|---|
| Results day | -0.73% | -0.35% |
Volume on the results session was 2.80× its 20-day average.
What to watch
- Whether operating margin holds above 6.73% after the 18.20-percentage-point sequential recovery.
- Whether the tax rate moves down from 46.85% in the next reported quarter.
- Whether interest growth moderates from 52.79% YoY.