BENGALURU (Reuters) – Indian refiner Hindustan Petroleum reported a drop in first-quarter profit on Monday, hurt by lower marketing margins as the price of crude oil remained high.
The state-run company’s standalone net profit fell 94% year-on-year to 3.56 billion rupees (about $43 million) in the quarter ended June 30.
Its average gross refining margin fell to $5.03 per barrel from $7.44 per barrel a year earlier.
KEY CONTEXT
Higher crude oil prices are a cause for concern for India, the world’s third-largest importer of the commodity.
Crude oil is a key raw material for refiners, accounting for almost all of their input costs.
Monthly fuel demand in India rose 2.6% and 6.1% year-on-year in April and June, respectively, helped by increased manufacturing and industrial activity. It fell almost 1% in May.
PEER COMPARISON
Valuation Estimates (next 12 Analysts’ sentiment
(next 12 months)
months)
RIC PE EV/EBI Revenue Profit Mean # of Stock to Div
TDA growth growth rating* analyst price yield
s target** (%)
Hindustan Petroleum 7.47 6.89 -1.36 -27.48 Hold 16 1.03 7.49
Corp
Bharat Petroleum 9.53 7.14 0.50 -38.71 Hold 22 0.97 6.67
Corporation
Indian Oil 9.85 7.10 1.39 -39.96 Hold 20 1.06 7.11
Corporation
Reliance Industries 24.35 12.16 10.22 13.94 Buy 31 0.91 0.30
* The mean of analysts’ ratings standardised to a scale of Strong Buy, Buy, Hold, Sell, and Strong Sell
** The ratio of the stock’s last close to analysts’ mean price target; a ratio above 1 means the stock is trading above the PT
APRIL-JUNE STOCK PERFORMANCE
— All data from LSEG
— $1 = 83.7274 Indian rupees
(Reporting by Varun Hebbalalu and Manvi Pant in Bengaluru; Editing by Mrigank Dhaniwala)
