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HPCL: Impresses, on prima facie…

Jan 29, 2001

Hindustan Petroleum Corporation Ltd. (HPCL) has reported a strong topline growth of 42.3%. The increase in sales is due to higher realisations with petroleum prices hiked towards the end of the previous quarter. It could also be due to higher merchant sales (purchased for resale).

(Rs m) 3QFY00 3QFY01 Change
Sales 92,728 131,927 42.3%
Other Income 208 723 248.3%
Interest 328 1,088 231.8%
Profit after Tax/(Loss) 2,210 3,388 53.3%
Net profit margin (%) 2.4% 2.6%  
No. of Shares (eoy) 226 339  
Diluted Earnings per share* 26.1 40.0  
P/E Ratio   4.4  
*(annualised)      

Prima facie the company seems to have performed better than its competitor Bharat Petroleum (BPCL). This, however, could be due to the significant rise in other income.

The interest expense of the company has increased substantially. This is resultant to the difficult industry scenario prevailing. The rise in feedstock prices (crude oil) has increased working capital requirements. Further, with dues blocked in the oil pool account, the company has had to resort to short term borrowings to overcome the gap in working capital. This has adversely impacted the bottomline.

HPCL at Rs 176 is trading at a multiple of 4.4x on 3QFY01 annualised earnings.

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