HPCL shares drop 4% on back of Q1 loss, Brent nearing $97; Nomura maintains 'Neutral'- Grow Mudra

HPCL shares drop 4% on back of Q1 loss, Brent nearing $97; Nomura maintains 'Neutral'

23 Jul , 2026 By : Debdeep Gupta

Shares of Hindustan Petroleum Corporation Ltd (HPCL) fell nearly 4 percent on July 23 after the state-run oil marketing company reported a consolidated net loss for the June quarter, weighed down by elevated crude oil prices and weak marketing margins amid the West Asia conflict.

At around 11:53 am, HPCL shares were trading 3.67 percent lower at Rs 380.70 on the NSE.

Brent crude climbed as much as 2.5 percent to nearly $96.50 per barrel, its highest level since early June, after Iran-backed Houthi militants claimed attacks on two Saudi Arabian tankers in the Red Sea, raising concerns over deeper supply disruptions.

For the first quarter of FY27, HPCL posted a consolidated net loss of Rs 12,264.67 crore, compared with a net profit of Rs 4,110.93 crore in the year-ago period.

Revenue from operations rose 21 percent year-on-year to Rs 1.44 lakh crore from Rs 1.19 lakh crore, while total income also increased 21 percent to Rs 1.45 lakh crore.

The company said the quarterly loss was primarily due to suppressed marketing margins following the spike in crude oil prices triggered by the West Asia conflict. HPCL's average gross refining margin (GRM) improved sharply to $23.80 per barrel during the quarter from $3.08 per barrel a year ago.

Following the results, Nomura maintained its 'Neutral' rating on the stock with a target price of Rs 440. The brokerage said, "HPCL's 1QFY27 standalone EBITDA loss of INR 161bn was worse than our estimate for a Rs 139 billion loss... largely due to higher-than-expected losses in fuel retailing. Gross refining margin of $23.8/bbl came in 2?ove our estimate of $23.3/bbl."

Nomura added, "With oil prices remaining volatile, near-term earnings visibility for OMCs remains clouded. However, we believe that the oil market would return to a surplus, absent any geopolitical events."

The brokerage also expects HPCL's Barmer refinery-cum-petrochemical complex to gradually ramp up to full utilisation by FY28 and maintained its Neutral stance, citing the company's higher sensitivity to Brent crude prices due to its larger fuel marketing exposure.