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Hindustan Petroleum Corporation Ltd Management Discussions

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Aug 21, 2025|12:00:00 AM

Hindustan Petroleum Corporation Ltd Share Price Management Discussions

A. BUSINESS ENVIRONMENT

Global Economy

The global economic landscape in CY 2024 was a tale of two speeds. Overall world output moderated slightly to 3.3% from 3.5% in the previous year. This was largely influenced by a slowdown in emerging markets and developing economies, which grew by 4.3%, compared to 4.7% in CY 2023. Conversely, advanced economies as a groupsaw growth edge up to 1.8% from 1.7%,supported by an improved outlook in the Euro Area, which grew by 0.9%.

While the easing of global inflation provided welcome relief amidst this complex environment, significant headwinds remain.Looking ahead, afocus on enhancing global economic ties and fostering innovation will be more crucial for sustainable growth than the current trend of protectionist trade policies.

Indian Economy

In FY 2024-25, Indias economic narrative was shaped by the positive impact of structural reforms. The provisional real GDP growth of 6.5% signifies a transition from a post-pandemicrecovery surge to a more stable and sustainable growth trajectory.

This consistent performance is underpinned by proactive government policies designed to enhance the nations productive capacity. Flagship initiatives such as the PM Gati Shakti National Master Plan, Startup India, and the Production Linked Incentive (PLI) Scheme have been instrumental. These programs are driving a profound transformation across manufacturing, the digital economy, and financial inclusion, building a robust framework for Indias long-term economic expansion.

	Region Wise Output (% Y/Y)
Region	CY23	CY24
World	3.5	3.3
Advanced Economies	1.7	1.8
US	2.9	2.8
Euro Area	0.4	0.9
Japan	1.5	0.1
Emerging Markets and
Developing Economies	4.7	4.3
China	5.4	5.0
South Africa	0.7	0.6
Brazil	3.2	3.4
Source: IMF WEO April25

Global Energy Scenario

In 2024, global energy demand grew by 2.2%, with a notable 4.3% surge in electricity demand due to record temperatures and increasing electrification. The energy mix showed significant shifts:

• Renewables & Nuclear: Experienced exponential growth, together accounting for over 40% of global electricitygeneration (32% from renewables, 9% from nuclear). A record 700 GW of renewable capacity was added, driven primarily by solar PV.

• Natural Gas: Demand grew robustly by 2.7% to an all-time high, with emerging markets accounting for 75% of the increase, largely for industrial use and power generation.

• Coal: Global demand rose by 1%, driven by electricity demand in China and India. China remained the worlds largest consumer, responsible for 58% of global use.

• Oil: Demand growth slowed significantly to 0.8%. In a historic shift, oils share in total energy demand fell below 30% for the first time in 50 years, with new demand driven primarily by chemical feedstocks and aviation.

Indian Energy Scenario

In 2024, India solidified its position as a primary engine of global energy consumption, recording the second-largest absolute rise in energy demand worldwide—an increase that surpassed the combined total of all advanced economies.

This burgeoning demand was met by a diversified energy mix, where coal continued to serve as the foundational source, accounting for 55% of the total energy supply and over 74% of the nations power generation. Concurrently, India became the epicenter of global oil demand growth, registering a 3.4% expansion driven by rapid urbanization and rising vehicle ownership. Natural gas consumption also surged by 10%, supported by the continued expansion of the national grid and a strong macroeconomic environment.

The scale of the nations energy appetite was significant, with total petroleum product consumption reaching 239.2 million metric tonnes (MMT), natural gas consumption at 71.9 BCM, and domestic crude oil processing at 267.7 MMT for the fiscal year (PE).

India: 2nd Largest Contributor to GlobalEnergy Demand Growth

"3.4% Growth in Indias Oil Demand"

Total petroleum product consumption - 239.2 MMT in India

Natural gas consumption - 71.9 BCM in India

International Crude Oil market

Fiscal year 2024-25 was marked by significant volatility and complexity in the global crude oil market, which navigated a dynamic interplay of geopolitical developments, macroeconomic factors, and strategic production decisions. While dated brent crude oil prices averaged US$ 78.9 per barrel for the year, this figure belies the considerable fluctuation throughout the period.

The fiscal year began with dated brent crude oil prices peaking at a six-month high of US$ 90.2 per barrel in April 2024. This initial spike was driven by heightened geopolitical tensions between Iran and Israel, sparking concerns over potential supply disruptions in the crucial Strait of Hormuz. However, as these risks did not translate into actual supply shocks, a softening trend emerged. Downward pressure was exacerbated by strong supply growth from non-OPEC+ producers, particularly record-high US shale output and resilient supply from Brazil. This was compounded by slowing global economic momentum, reflected in elevated US interest rates and weakening manufacturing activity in Europe. The first half closed with a sharp drop in September after OPEC revised its global oil demand forecasts downward.

The second half of the fiscal year saw moderate but persistent volatility. After averaging US$ 74.7 per barrel in the third quarter, prices saw a brief rebound in October to US$ 75.7 per barrel amid renewed Middle East tensions and new economic stimulus measures in China. However, as geopolitical fears eased and Chinese demand remained muted, prices gradually declined, reaching US$ 73.9 per barrelin December. The market then rallied to a four-month high of US$ 79.2 per barrel in January 2025, following new US sanctions on Russian oil and weather-related supply constraints. This proved short-lived, as the fiscal year closed with prices falling to US$ 72.6 per barrel in March, driven by OPEC+s announcement of a phased reversal of its production cuts and growing investor concerns over a potential global trade war.

Indian Crude Oil Basket

In fiscal year 2024–25, the Indian crude oil basket averaged US$ 78.6 per barrel, closely mirroring the volatility and trends seen in global benchmark prices.

The year began with the basket averaging a high of US$ 85.2 per barrel in Q1, reflecting elevated global prices. A moderating trend followed in Q2, with prices settling at US$ 78.7 per barrel as global economic growth slowed and major agencies like the IEA and EIA revised down their oil demand forecasts for 2024. This decline continued into Q3, which became the weakest quarter of the year with an average price of US$ 73.8 per barrel.

Significant fluctuations were witnessed in Q4. Following an OPEC+ decision in December 2024 to extend production cuts, prices for high-sulphur crude grades strengthened. Due to its composition, the Indian crude basket is more sensitive to these movements and consequently rose to a five-month high of US$ 80.2 per barrel in January 2025. However, this peak was shor t-lived. By the end of the fiscal year, prices declined sharply to US$ 72.5 per barrel in March amid growing fears of a global tariff war and expectations of higher crude supply from OPEC+ nations.

Indian crude oil basket price in FY 2024-25 (US$ per barrel)

Singapore Refined Product Margins against Dubai crude FY 2024-25 (US $ per barrel)

Benchmark Refining Margins

The refining sector in FY 2024–25 was characterized by a broad normalization of margins from the exceptional highs of the previous year. Despite ongoing geopolitical uncertainties, the market reverted to more typical fundamentals, with the Singapore benchmark refining margin averaging US$ 3.8 per barrel.

This overarching trend was driven by varying dynamics acrossthe product barrel, as illustrated by the performance in the first quarter. Margins for light and middle distillates faced significant compression. Naphtha margins fell to US$ -14.1 per barrel in April a sharp month-on-month drop of US$ 5.8 per barrel, Gasoline softened to US$ 8.5 per barrel down US$ 4.9 per barrel on a quarter-on-quarter basis, and Gasoil contracted sharply to US$ 14.8 per barrel a US$ 8.3 per barrel fall over the previous quarter. These declines were largely attributable to increased regional supply from the Middle East and China, coupled with subdued demand in key markets.

In contrast, the heavy end of the barrel showed strength. Marginsfor High Sulphur Fuel Oil (HSFO) improved notably toUS$ -5.1per barrel from US$ -9.7 perbarrel inthe prior quarter, buoyed by strong demand for power generation in the Middle East. This divergence highlights the complex interplay of factors that shaped the refining environment throughout the year.

This trend of divergence and volatility continued into the second quarter, where Singapore refining margins remained broadly stable at a low average of US$ 3.6 per barrel. The primary pressure during this period came from an oversupply of diesel in the Asian market, a result of higher Chinese exports and new refinery start-ups in the Middle East. This excess capacity weighed on middle distillates, with jet fuel margins declining to US$ 13.1 per barrel, the lowest since Q3 FY 2021–22, as peak summer travel demand concluded. By September 2024, 10-ppm gasoil margins had fallen to US$ 10.8 per barrel, their lowest point since September 2021. Gasoline margins also weakened significantly, reaching an 11-month low of US$ 4.9 per barrel in September, pressured by falling US prices and an influx of Middle Eastern supply. In contrast, Naphtha margins showed notable improvement, rising from US$ -12.4 to US$ -6.1 per barrel, buoyed by tightened regional supply following unplanned refinery outages in Russia.Meanwhile, HSFO 180 CST margins settled lower at US$ -5.3 per barrel, reflecting reduced demand from China for fuel oil as a refinery feedstock.

The market dynamic shifted significantly in the third quarter, which saw a strong recovery in profitability. Singapore refining margins averaged US$ 5.0 per barrel, reaching the highest quarterly level of the year. This improvement was broad-based, driven by robust demand across most of the product barrel. Gasoil margins surged to US$ 15.1 per barrel, their highest level during the year, propelled by elevated demand for heating fuel during the winter months. Jet fuel margins also picked up in anticipation of year-end holiday travel. Naphtha margins rose to US$ -3 per barrel, supported by strong demand from petrochemical plants across Asia, while fuel oil margins continued their upward trajectory to US$ -2.3 per barrel, likely driven by increased demand from marine vessels equipped with scrubbers. Gasoline was the exception, seeing a modest decline, though margins remained supported at US$ 6.5 per barrel due to healthy import demand and unplanned refinery outages.

However, this recovery proved temporary, as margins retreatedin the final quarter of the fiscal year, declining on a quarter-on-quarter basis to US$ 3.2 per barrel. Naphtha margins fell to US$ -5.5 per barrel, caught between the pressure of stronger crude prices and the support from reduced Russian supply. Gasoil margins eased slightly to US$ 14.3 per barrel amid reduced demand from China. This was counterbalanced by pockets of strength elsewhere. After a subdued start to the quarter, gasoline margins rebounded sharply in March to US$ 7.1 per barrel, driven by a surge in import demand from Southeast Asia during Ramadan. The heavy end of the barrel was the standout performer, with HSFO margins rising to US$ -2.0 per barrel—the highest quarterly level of the year—amid concerns over potential supply disruptions from Iran and Russia. This culminated in fuel oil margins peaking at US$ 0.25 per barrel in March 2025, their highest point since April 2022, aided by a sharp decline in crude prices at the fiscal years close.

Domestic Petroleum Products Consumption

Indias product consumption continued its growth trajectory in FY 2024-25, rising by 2.1% to reach 239.2 million metric tonnes (MMT), up from 234.3 MMT in the previous year. The market narrative was defined by two paralleltrends: strong, broad-based growth in major fuels driven by economic activity, and significant shifts in the consumption patterns of industrial and subsidized fuels. The primary engines of growth were the four major petroleumproducts namely Petrol (MS), Diesel (HSD), LPG, petroleum and Jet Fuel (ATF). Petrol (MS) consumption reached a decadal high of 40 MMT, growing by an impressive 7.5%, underpinned by higher vehicle sales and rising personal mobility. Diesel (HSD), which accounts for approximately 38% of total consumption, rose by 2% to 91.4 MMT, reflecting increased freight movement and economic activity. The domestic sector remained robust, with LPG consumption growing by 5.6% to 31.3 MMT. The aviation sector saw a strong rebound, with Jet Fuel (ATF) consumption increasing by 8.9% to 9.0 MMT due to a surge in tourism and passenger traffic.

In contrast, the market also reflected ongoing structural changes. Consumption of Naphtha and Bitumen declined by 4.8% and 5.4%, respectively. A policy-driven shift towards cleanerfuels and targeted bans led to a slight 0.9% decline in Fuel Oil consumption. This trend, however, boosted Light Diesel Oil (LDO) consumption by 7.2% as some industries switched. Meanwhile, the managed decline of subsidized kerosene (SKO) continued, with consumption falling by 15%.

Outlook

As we progress through 2025, the Global Economy is navigating a period of significant headwinds. The year commenced against a backdrop of heightened geopolitical instability, with the prolonged Russia-Ukraine conflict and unrest in the Middle East continuing to weigh on market sentiment. These challenges are compounded by persistent inflationary pressures, ongoing supply chain disruptions, and a sharp escalation in trade disputes that have hindered cross-border economic activity.

Amidst this complex environment, the International Monetary Funds (IMF) April 2025 World Economic Outlook projects a modest global GDP growth of 2.8% for CY 2025. Looking ahead, a gradual improvement is anticipated, with the forecast rising slightly to 3.0% in CY 2026, contingent on the mitigation of these global pressures.

The Indian economy is expected to maintain its steady growth trajectory, with a projected expansion of 6.5% in FY2026, retaining its status as the worlds fastest-growing large economy. This performance keeps India on track to become the third-largest economy globally by 2028.

This robust outlook is underpinned by strong domestic fundamentals. Key growth drivers include sustained government-driven capital expenditure, healthy corporate and bank balance sheets fostering a positive investment cycle, and double-digit credit growth. These factors are further supported by robust agricultural performance and high-capacity utilization in the manufacturing sector. However, this positive domestic picture is set against a backdrop of external challenges. Factors such as slowing global growth, potential export headwinds, persistent geopolitical risks, and the increasing threat of climate shocks may weigh on the outlook.

The global energy landscape is undergoing a fundamental transformation, driven by rising electrification, an evolving mobility sector, and the increasing prominence of renewables in the energy mix. Amidst this transition, India is emerging as the new epicenter of global energy demand growth.

Having become the worlds most populous country in 2023 with over 1.42 billion people, and as the fastest-growing majoreconomy, Indias favorable demographics areset to fuel an exponential rise in energy consumption. Projections indicate that India will account for the single largest contributor of global energy demand growth upto 2040. The outlook for global oil demand indicates a period of sustained growth, with consumption expected to rise by 1.3 million barrels per day (mb/d) year-on-year in 2025 to reach an average of approximately 105 mb/d.

This steady expansion is projected to be underpinned by resilient demand from key sectors. The primary drivers include strong growth in air travel, robust road transport activity for both passengers and freight, and sustained momentum in the industrial, construction, and agricultural sectors, particularly in non-OECD countries.

This trend is anticipated to continue into 2026 with a similar increase of 1.3 mb/d. Transportation fuels—namely gasoline, jet/kerosene, and diesel—are expected to remain the main drivers of demand growth, with additional contributions from LPG and naphtha.

The outlook for Indias oil demand indicates a period of sustained and robust expansion, positioning the nation as the single largest driver of global oil demand growth through 2030. According to OPECs latest global outlook, the countrys demand is projected to rise from 5.55 million barrels per day (bpd) in 2024 to 5.72 million bpd in 2025, a 3.06% increase.

This momentum is expected to accelerate, with demand forecastto reach 5.96 million bpd in 2026, growing at 4.20%. This expansion is underpinned by powerful structural drivers, including rapid urbanization, industrialization, and a wealthier middle class with a growing appetite for mobility and tourism. Ambitious national plans to expand road connectivity and manufacturing activities will further boost oil consumption, with total demand expected to increase by more than 1 million bpd by 2030.

5.72 million bpd

India oil demand in CY 2025

Natural gas demand in India is expected to increase in 2025, supported by the continued development of the national pipeline grid and city gas infrastructure. The primary drivers of this growth are anticipated to be higher industrial usage, particularly in the fertilizer sector, and increased consumption in the power sector as part of a broader fuel diversification strategy.

This steady growth in natural gas consumption is a key element of Indias unique energy transition pathway.

As a developing nation, India must carefully balance its international climate commitments with the need to ensure energy remains affordable and accessible for its large population. The increasing share of natural gas in the energy mix reflects this pragmatic approach, moving toward a low-carbon future while supporting sustained economic growth.

B. FINANCIAL PERFORMANCE

The Corporation reported a strong financial performance with a Standalone Profit After Tax (PAT) of ? 7,365 Crore during FY 2024-25.

HPCL continues to command strong credit ratings assigned by various credit rating agencies as follows:

Instrument	Rating Agency	Rating as of July 7th, 2025	Outlook as of July 7th, 2025	Remark
International Long-Term Rating / USD Bond Rating	Moodys	Baa3	Stable	At par with Indias sovereign rating
International Long-Term Rating / USD Bond Rating	Fitch	BBB-	Stable	At par with Indias sovereign rating
Long Term Debt	CRISIL	AAA	Stable	Highest rating grade by CRISIL
Long Term Debt	India Ratings	AAA	Stable	Highest rating grade by India Ratings
Long Term Debt	ICRA	AAA	Stable	Highest rating grade by ICRA

Gross Sales

The Corporations gross sales (inclusive of excise duty) stood at ? 4,64,247 Crore in FY 2024–25, as against ? 4,59,815 Crore in FY 2023–24. Total product sales for FY 2024–25 were 49.82 MMT, compared to 46.82 MMT in FY 2023-24.

Profit before Tax

The Corporation reported a Profit Before Tax of ? 9,621 Crore in FY 2024–25, compared to ? 19,153 Crore in FY 2023–24.

Provision for Taxation

The Corporations income tax expense for FY 2024–25 was ? 2,257 Crore, as against ? 4,459 Crore in FY 2023–24.

Profit after Tax (PAT)

The Profit After Tax for FY 2024–25 stood at ? 7,365 Crore, compared to ? 14,694 Crore in the previous year.

Depreciation and Amortisation

Depreciation for FY 2024–25 amounted to ? 6,090 Crore, as compared to ? 5,552 Crore in FY 2023–24.

Borrowings

Total borrowings stood at ? 63,323 Crore as on 31st March2025, comparedto ? 60,254 Crore as on31 st March 2024. Long-term borrowings were raised through Non-Convertible Debentures (NCDs), foreign currency bonds, loans from foreign banks, the Oil Industry Development Board (OIDB), and term loans from banks. Short-term borrowings primarily included rupee loans from banks, commercial paper, Clearcorp Repo Order Matching System (CROMS), Tri-party Repo System (TREPS), buyers credit, and revolving lines of credit.

The long-term debt-to-equity ratio stood at 0.94 as on 31st March 2025, compared to 1.06 as on 31st March 2024. On an overall basis (including both long-term and short-term borrowings), the debt-to-equity ratio stood at 1.38 as on 31stMarch 2025, as against 1.47 as on 31stMarch 2024.

Capital Assets

Net fixed assets (including capital work-in-progress) increased to ? 99,169 Crore as on 31st March 2025, from ? 95,501 Crore as on 31stMarch 2024.

Investments

Total investments stood at ? 24,235 Crore as on 31stMarch 2025, compared to ? 25,678 Crore as on 31st March 2024.

Gross Refining Margins (GRMs)

The Corporations average Gross Refining Margin (GRM) for FY 2024–25 stood at US$ 5.74 per barrel, compared to US$ 9.08 per barrel recorded in FY 2023–24 (gross of export cess). The GRM for the Mumbai Refinery averaged US$ 5.92 per barrel during the year, as against US$ 10.35 per barrel in the previous year. Similarly, the Visakh Refinery reported an average GRM of US$ 5.63 per barrel in FY 2024–25, compared to US$ 8.12 per barrel in FY 2023–24.

Earnings per Share (EPS)

Earnings per share for FY 2024–25 stood at ? 34.61, compared to ? 69.06 in FY 2023–24.

Dividend

After considering the Corporations financial performance, the Board of Directors has recommended a final dividend of ? 10.50 per equity share of face value ? 10 each for FY 2024–25.

Key Financial Ratios

Key financial ratios for the Corporation are provided as under:

Ratio Description	FY 2024-25	FY 2023-24
Debtors Turnover Ratio (times)	43.97	56.98
Inventory Turnover Ratio (times)	12.88	14.53
Interest Service Coverage Ratio (Times)*	4.42	6.92
Current Ratio	0.60	0.61
Long-term Debt Equity Ratio	0.94	1.06
Operating Margin (%)*	2.25	4.18
Net Profit Margin (%)*	1.58	3.18

*During FY 2024-25, the negative margins on LPG have impacted profitability, thus affecting these ratios.

C. STRATEGY

HPCLs medium-term strategy roadmap is currently under implementation. The strategy is designed to tap into evolving opportunities in the changing energy landscape, leverage emerging opportunities, navigate future challenges, and diversify into new business lines, which will help to de-risk the existing business portfolio.

The strategy aims to create value and deliver growth responsibly by strengthening existing businesses, leveraging new growth engines such as petrochemicals and natural gas, and seizing green and emerging opportunities with a focus on technology and innovation. Special emphasis on Environmental, Social, and Governance (ESG) parameters and building strategic partnerships will give the organization a competitive edge in the changing business landscape.

The company has undertaken several large-scale projects to strengthen its existing businesses in refining and marketing. Most of these projects are either completed or nearing completion. The capacities of the Visakh and Mumbai refineries have been expanded, accompanied by an expansion of the supply and distribution network to facilitate the evacuation of the increased refinery output. HPCL has remained the countrys second-largest retail outlet network. The completion and commissioning of these major projects will help HPCL enhance its capacities and create value in the coming years.

In the natural gas business, HPCL has successfully commissioned LNG import and regasification terminal at Chhara Port in Gujarat through its 100% subsidiary, "HP LNG Limited," in 2024-25. This will help HPCL expand its footprint in the Natural Gas business. Large-scale investments through "HPCL Rajasthan Refineries Limited" are underway to build a greenfield refinery with petrochemical manufacturing capacity through the joint venture route. HPCL has already forayed into the marketing of petrochemicals under its brand "HP Durapol." Towards expanding presence in green and emerging opportunities, HPCLs wholly owned subsidiary for green businesses, named ‘HP Renewable and Green Energy Limited, is in operation and is consolidating various opportunities. The 370 TPA green hydrogen plant at the Visakh refinery has been completed and is in operation. With respect to alternative fuels and energy storage, new avenues of value creation in the electric vehicle (EV) ecosystem are being explored in collaboration with various technology start-ups, OEMs, etc. The vast network of over 23,000 retail outlets of HPCL is being leveraged as the company forays into emerging opportunities, including non-fuel and adjacent business opportunities.

HPCL continues its focus on technology for business transformation and for delivering value to its customers. A digital strategy is in place, and various digital transformation projects have been completed or are ongoing. Cutting-edge digital technologies are being leveraged to enhance operational effectiveness and efficiency, as well as to provide enriching customer experiences.

An increased focus on Environmental, Social, and Governance (ESG) performance is becoming necessary as momentum is building up across the globe to maximize the usage of renewable energy, sustainability, and participation in the unfolding energy transition scenario. HPCL is committed to conducting business in a responsible manner by preserving the environment and contributing to sustainable development.

D. INTEGRATED MARGIN MANAGEMENT

The Integrated Margin Management (IMM) group operates with the core objective of enhancing Net Corporate Realization (NCR) by planning and optimizing the end-to-end supply chain, from crude oil procurement to customer delivery. By aligning all Strategic Business Units (SBUs) with this unified goal, IMM continued to steer the Corporations planning operations in FY 2024–25.

During the year, IMM capitalized on margin improvement opportunities through the optimal planning and processing of various crude grades, including new and opportunity crudes. This meticulous planning was instrumental in HPCLs refineries achieving their highest-ever crude throughput of 25.27 MMT. Overall value realization improved due to enhanced production volumes, increased sales of high-value products, and greater accuracy in demand forecasting. IMM also enabled the highest-ever cross-country pipeline throughput, thereby improving asset utilization.

To foster continuous improvement, the group drives margin enhancement initiatives across the Corporation through a structured platform called ‘Idea Junction. In FY 2024–25, this Initiative Management Office recorded close to 30,000 ideas with a cumulative employee participation rate of 71%, facilitated by workshops and theme-based campaigns designed to tap into hidden potential across all SBUs.

E. REFINING PERFORMANCE

Crude Oil Imports

In FY 2024–25, the Corporations crude oil imports increased to 21.98 MMT from 17.89 MMT in the prior year. This was supplemented by the procurement of 4.41 MMT from indigenous sources. The import portfolio consisted of 15.85 MMT of high sulphur crude and 6.13 MMT of low sulphur crude.

To enhance procurement efficiency and align with global best practices, HPCL established a new Crude Oil Trading Desk, which commenced operations in July 2024. This initiative has already shown positive results, with the desk tyingup the import of 4 MMT (29.1 million barrels) of crude oil, leading to a notable reduction in procurement costs during the fiscal year.

Refining

HPCLs refineries set new operational benchmarks in FY 2024–25, achieving a combined highest-ever crude throughput of 25.27 MMT, an increase from 22.33 MMT in the previous year.

This record performance was driven by exceptional output from both our refineries. The Visakh Refinery processed a record 15.31 MMT of crude, and the Mumbai Refinery achieved its highest-ever throughput at 9.96 MMT. This was a testament to our operational excellence, as both facilities exceeded their design capacities and reported an average capacity utilization of 109% even with scheduled turnarounds during the year.

HPCLs refineries set new operational benchmarks in FY 2024–25, achieving the highest-ever production of key products including MS, HSD, LPG, ATF, and Bitumen. This was accomplished by remarkable feedstock adaptability, with the processing of eight new crude grades—the highest number in a single year, surpassing the previous record of seven.

This record performance was driven by robust refinery reliability and standardized operating processes. Our adaptability was further showcased by adding 20 new grades to our crude basket, which now includes 178 globally sourced varieties. These achievements are supported by our focus on modernization; units commissioned under the Visakh Refinery Modernization Project (VRMP) now operate at their design capacities. A major milestone is the mechanical completion of Indias first-of-its-kind Residue Upgradation Facility (RUF) at Visakh, with an installed capacity of 3.55 MMTPA. This unit, which will be one of the worlds first to deploy LC-MAX technology, is in advanced stages of commissioning and is designed to deliver the highestconversion of bottom products, thereby improving refinery GRMs.

HPCL undertook several strategic projects at its refineries in FY 2024–25 to maximize the production of high-demand fuels like MS and expand its portfolio of value-added specialty products.

This progress was driven by targeted initiatives at both locations. To enhance MS production, the Mumbai Refinery successfully commissioned a unique parallel hydrotreating unit, while a revamp of the Naphtha Isomerization Unit is underway at the Visakh Refinery to increase its capacity and improve RON. In the value-added segment, HPCL successfully demonstrated the production of De-aromatised Kerosene (DAK) solvents and is implementing anew project to manufacture pharma-grade Hexane at the Mumbai Refinery. Furthermore, the Lube Modernization

& Bottom Upgradation Project is in progress at Mumbai Refinery, which will increase LOBS production from 475 KTPA to 764 KTPA and bitumen production by 487 KTPA.

To further enhance fuel products sufficiency and to meet the growing petrochemical demand, Indias first integrated Grassroot Refinery-cum-Petrochemical Complex is being developed at Pachpadra in District Balotra, Rajasthan, by HPCL Rajasthan Refinery Limited (HRRL)—a joint venture between HPCL and the Government of Rajasthan. The HRRL Refinery cum Petrochemical Complex boasts of having the highest Petrochemical Intensity Index of 26% in India. Construction of all Process Units is progressing in fullswing. Refinery units are expected to be progressively commissioned during the financial year, 2025-26.

Completion of these projects and new business initiatives will mark a significant step in optimizing refining processes, versatility,and capacity, aswell as the companys ability tocater to Indias diverse and evolving energy needs. These initiatives will also contribute to national goals of energy accessibility, affordability, security, and sustainability. In its efforts to reduce environmental impact, HPCL has adopted various strategies such as process optimization, advanced control systems, energy recovery, equipment upgrades, and employee engagement. Through these efforts, HPCL refineries have unlocked substantial energy savings and reduced emissions.

In FY 2024–25, energy conservation schemes implemented at HPCL refineries led to annual savings of 1,56,022 SRFT (including sustenance of previous schemes). This

translated to an estimated reduction of 0.50 MMT of CO2

equivalent emissions per year. Both the Mumbai and Visakh refineries achieved outstanding energy performance, witha combined EnergyIntensity Index(EII) of95.5 and a combined MBN of 74.5.

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O. JOINT VENTURE COMPANIES AND SUBSIDIARIES

HPCL HPCL conducts its business through various Subsidiaries and Joint Venture (JV) companies across diverse domains, including oil refining and petrochemicals, value-added bituminous products, marketing of petroleum products(POL), petroleum pipelines, natural gas pipelines, LPG pipelines, City Gas Distribution (CGD), LPG caverns, LNG terminals, aviation fuel farm facilities, biofuels, and green energy.

HPCL-Mittal Energy Ltd (HMEL)

HPCL-Mittal Energy Limited (HMEL) is a joint venture between HPCL and Mittal Energy Investments Pte Ltd, Singapore, with each partner holding an equity stake of 48.99%. As one of Indias leading integrated refining and petrochemical companies, HMEL owns and operates the 11.3 MMTPA Guru Gobind Singh Refinery (GGSR) in Bathinda, Punjab. The refinery houses a world-class petrochemical complex with a combined polymer capacity of2.2 MMTPA, producing grades such as HDPE, LLDPE, and various PP grades.

In FY 2024–25, HMEL delivered a record performance, achieving its highest-ever crude throughput of 13.045 MMT. The company recorded a consolidated total revenue of ?99,720.40 Crore and declared an interim dividend of 3.2% for the year. In line with its Net Zero 2040 roadmap, HMEL also made significant progress on its ESG agenda and reinforced its dedication to fostering an inclusive workplace culture of belonging, diversity, and sustainable growth.

South Asia LPG Company Pvt Ltd (SALPG)

SALPG, a joint venture between HPCL and Total Energies Marketing Holdings India, with each partner holding an equal 50% equity share, owns and operates a 60 TMT underground LPG cavern with associated receiving and dispatch facilities at Visakhapatnam.

In FY 2024–25, SALPG achieved a throughput of 1.18 MMT, recorded total revenue of ?128.72 Crore, and posted a Profit After Tax (PAT) of ?59.54 Crore. A testament to its consistent value creation, SALPG has been paying dividends continuously for the last 15 years and paid an interim dividend of 50% for 2024-25. In recognition of its excellence in Environment, Health, and Safety (EHS), SALPG also received the ‘Gold Award from CII in the Oil & Gas sector for the third consecutive time.

Prize Petroleum Company Ltd (PPCL)

Prize Petroleum Company Ltd (PPCL) is a wholly owned subsidiary and upstream arm of HPCL, engaged in the exploration and production (E&P) of hydrocarbons and offeringservices for the management of E&P blocks. PPCLs Singapore-based subsidiary, Prize Petroleum International Pte Ltd (PPIPL), held participating interests of 11.25% and 9.75% in two E&P blocks in Australia—T/L1 and T/18P. On April 10, 2024, PPIPL entered into a Sale and Purchase Agreement to divest its participating interests in these blocks to Beach Energy (Operations) Limited, with HPCL acting as the guarantor for the transaction. Prior to the completion of the sale on May 1, 2024, PPIPLs share of hydrocarbon production from the Yolla producing field (T/L1) stood at 6,941 barrels of oil equivalent (BoE) during 2024-25. In FY 2024–25, PPCL recorded a total consolidated revenue of ?21.92 Crore.

Hindustan Colas Pvt Ltd (HINCOL)

HINCOL is a joint venture between HPCL and Colas S.A., France, with each partner holding an equal 50% equity share. The company manufactures and markets bitumen derivatives for road and airfield construction across India and undertakes specialized road maintenance activities like micro-surfacing. HINCOL operates ten Bitumen Emulsion and Modified Bitumen plants and two bitumen storage terminals, with all facilities conforming to international standards such as ISO 9001:2015, ISO 14001:2015, and ISO 45001:2018. Additionally, its R&D Centre and Quality Control Laboratories are certified by NABL under ISO/IEC 17025:2005.

In FY 2024–25, HINCOL recorded a sales volume of 385 TMT and achieved its highest-ever micro-surfacing area, covering over 14 lakh square meters. This strong operational performance resulted in a consolidated total revenue of ?1,836.81 Crore and a Profit After Tax (PAT) of ?177.22 Crore. Continuing its 25-year history of consistent dividend payments, HINCOL declared its highest-ever interim dividend of 1500% for the fiscal year.

HPCL Rajasthan Refinery Ltd (HRRL)

HPCLRajasthan Refinery Ltd (HRRL), a joint venture between HPCL (74% equity) and the Government of Rajasthan (26% equity), is setting up a 9 MMTPA greenfield refinery and 2.4 MMTPA petrochemical complex in Rajasthan. This project is designed to enhance fuel product sufficiency and meet the growing demand for petrochemicals.

The project is now in an advanced stage, with all project facilitation activities completed, all LSTK contracts awarded, and construction progressing in full swing. Several process units and packages have been commissioned, including the Raw Water Treatment Plant, Nachna Water Reservoir, 220 KVA Switchyard, and the Compressed Air & Nitrogen Plant. Pre-commissioning activities are underway for other critical units such as the Diesel Hydrodesulphurisation Unit, Hydrogen Generation Unit, and Effluent Treatment Plant. To ensure seamless operations, all cross-country pipelines for crude oil transport, raw water and natural gas supply, and petroleum product evacuation have been completed.

Mangalore Refinery and Petrochemicals Ltd (MRPL)

Mangalore Refinery and Petrochemicals Limited (MRPL), a key joint venture of ONGC (71.63% equity) and HPCL (16.96% equity), solidified its position as a leading public sector enterprise in the energy sector. As a Schedule ‘A Miniratna CPSE, MRPL continues to be a vital asset in the nations refining landscape. MRPL is steadily expanding its retail footprint, currently operating 167 retail outlets as of March 2025.

The fiscal year 2024–25 was a landmark period for the company, defined by exceptional operational efficiency.

MRPLs 15 MMTPA refinery in Mangaluru achieved its highest-ever crude throughput of 18.04 MMT, resulting in an outstanding capacity utilisation of 120%. This record-breaking performance underpinned the companys financial results, culminating in a consolidated revenue of ?1,09,430.70 Crore and a Profit After Tax (PAT) of ?56.21 Crore.

Ratnagiri Refinery and Petrochemicals Ltd (RRPCL)

Ratnagiri Refinery & Petrochemicals Ltd. (RRPCL) represents a monumental collaboration between Indias leading oil marketing companies. This joint venture is strategically promoted by Indian Oil Corporation Ltd. (IOCL), Bharat Petroleum Corporation Ltd. (BPCL), and Hindustan Petroleum Corporation Ltd. (HPCL), with equity participation structured in a 50:25:25 ratio, respectively. RRPCL is tasked with developing a state-of-the-art integrated refinery and petrochemical complex on the west coast of Maharashtra, a project poised to significantly enhance the nations energy security and petrochemical capacity. The project is currently progressing with pre-project activities underway.

HPCL Biofuels Ltd (HBL)

HPCL Biofuels Ltd. (HBL), a wholly-owned subsidiary of HPCL and a cornerstone of HPCLs ethanol blending program, reported a year of significant achievements. The companys two integrated plants in Bihar generated a revenue of ?442.56 Crore in FY 2024–25.

The years operational excellence is reflected in the production figures: 11,153 KL of ethanol, 65,431 MT of sugar, and 56,483 MWh of co-generated power from 735.24 TMT of crushed cane. The companys focus on maximising value was evident as medium-grade sugar, which commands a relatively higher market price, accounted for 67.42% of total production. In a strategic move to secure future growth, the company is progressing with the expansion of its distillery to incorporate grain-based feedstock, which will facilitate year-round ethanol production.

Petronet MHB Ltd (PMHBL)

PetronetMHB Limited (PMHBL), a joint venture with ONGC holding equal equity of 50% each, plays a crucial role in theenergy infrastructure of Karnataka. The company owns and operates a vital multiproduct petroleum pipeline, efficiently transporting products from the MRPL refinery across the state.

In the fiscal year 2024–25, PMHBL achieved a throughput of 3.971 MMT, recording a total revenue of ?206.05 Crore and a robust Profit After Tax (PAT) of ?83.04 Crore. Reflecting its strong financial health and commitment to shareholder value, the company paid an interim dividend of 16.05% during the year.

A testament to its commitment to global standards, PMHBLs Integrated Management System (IMS) holds five prestigious certifications: ISO 9001:2015 (Quality), ISO 14001:2015 (Environment), ISO 45001:2018 (Health & Safety), ISO 50001:2018 (Energy), and ISO 27001:2022 (Information Security). The company continues to upgrade its technologies in line with international best practices.

Bhagyanagar Gas Ltd (BGL)

Bhagyanagar Gas Limited (BGL), a joint venture with GAIL (India) Ltd., where each partner holds a 47.515% equity stake, continues to be a leader in City Gas Distribution (CGD). The company operates extensive CGD networks across the key urban centres of Hyderabad, Vijayawada, and Kakinada.

In the fiscal year 2024–25, BGL achieved robust sales of 72,709 MT of CNG and 559.84 lakh SCM of PNG. This strong operational performance generated a revenue of ?786.40 Crore and a Profit After Tax (PAT) of ?47.05 Crore. Reflecting its consistent value creation, BGL paid an interim dividend of 5% for the year.

The companys significant market presence is supported by a formidable infrastructure base, comprising 2,568 km of MDPE pipeline, 193 km of steel pipeline, 139 CNG stations, and 3,41,997 domestic connections serving communities across Telangana and Andhra Pradesh.

Aavantika Gas Ltd (AGL)

Avantika Gas Limited (AGL), a joint venture with GAIL (India) Ltd., in which each partner holds 49.99% equity, continues to expand its City Gas Distribution (CGD) network in Madhya Pradesh, operating across Indore, Ujjain, Pithampur, and Gwalior.

In the fiscal year 2024–25, AGL delivered a strong performance, achieving sales of 55,948 MT of CNG, 682.82 lakh SCM of PNG, and 22.99 lakh SCM of CBG. This operational success translated into a total revenue of ?818.25 Crore and a Profit After Tax (PAT) of ?80.18 Crore. Reflecting its robust financial health, the company paid an interim dividend of 10% for the year.

This performance is supported by AGLs extensive infrastructure, which includes 3,258 km of MDPE pipeline, 118 km of steel pipeline, 119 operational CNG stations, and a growing base of 1,90,749 domestic connections.

GSPL India Gasnet Ltd (GIGL)

GSPL India Gasnet Limited (GIGL) is a joint venture with Gujarat State Petronet Ltd (GSPL), which holds the majority 52% stake, IOCL (26%), and BPCL (11%). HPCL holds an 11% equity stake in the company. GIGL is tasked with the development of critical cross-country gas pipelines. The company has been authorized to lay the Mehsana-Bathinda Pipeline (MBPL) and the Bathinda-Gurdaspur Pipeline (BGPL), the latter being the revised scope for the Bathinda-Jammu-Srinagar pipeline as approved by the PNGRB.

Significant progress has been made on the projects, with 1,387 km of pipeline commissioned out of a total of 1,445 km constructed. During the fiscal year, GIGL successfully completed the HRRL pipeline connectivity project and is advancing work on the GGSRL and NFL spur lines in Bathinda. In FY 2024–25, the company transported 1,343.87 MMSCM of natural gas, generating a revenue of ?265.20 Crore.

GSPL India Transco Ltd (GITL)

GSPL India Transco Limited (GITL) is a joint venture with Gujarat State Petronet Ltd (GSPL), which is the lead partnerwith a 52% stake, IOCL (26%), and BPCL (11%). HPCL holds an11% equity share inthe company. GITLhas been authorized to lay a significant 1,881 km cross-country gas pipeline from Mallavaram to Bhilwara.

The initial section of this major project, connecting the pipeline interconnection point at Kunchanapalli to the Ramagundam Fertilisers & Chemicals Limited plant, has been operational since FY 2019–20. During FY 2024–25, this commissioned section enabled the transportation of 726 MMSCM of natural gas, generating a revenue of ?118.92 Crore for the company.

Godavari Gas Pvt Ltd (GGPL)

Godavari Gas Private Limited (GGPL), a joint venture with Andhra Pradesh Gas Distribution Corporation Limited (APGDC) holding the 74% stake and HPCL holding 26%, is committed to developing the City Gas Distribution (CGD) networks in the East and West Godavari districts of Andhra Pradesh.

In the fiscal year 2024–25, GGPL reported a revenue of ?90.04 Crore and a Profit After Tax (PAT) of ?2.65 Crore. Thisperformance was driven by sales of 5350.7 MT of CNG, 93.99 Lakh SCM of PNG, and 794 KL of MS & HSD from its retail outlet operations.

The companys growing infrastructure includes 642 km of MDPE pipeline, 111.2 km of steel pipeline, 33 CNG stations, one MS/HSD retail outlet, and 1,00,907 domestic connections.

HPOIL Gas Pvt Ltd (HOGPL)

HPOIL Gas Private Limited (HOGPL), a 50:50 joint venture with Oil India Ltd (OIL), delivered an exceptional performancein FY 2024–25, marked by accelerated growth and significant operational milestones. The company achieved a remarkable 36% year-on-year growth in CNG sales, with volumes reaching 26,817 MT, and an impressive 85% growth in PNG sales, with volumes of 98.15 lakh SCM. The company also expanded its green energy portfolio with CBG sales of 737.86 MT.

This robust growth drove a total revenue of ?285.26 Crore and a Profit After Tax (PAT) of ?9.29 Crore. A testament to its execution capabilities, HOGPL completed its Minimum Work Programme (MWP) for both its geographical areas (GAs) in Haryana (GA of Ambala & Kurukshetra District) and Maharashtra (Kolhapur District GA) well ahead of the scheduled timelines. Building on this success, the company has secured authorization for the Nagaland GA in PNGRBs 12th Bidding Round, paving the way for future expansion.

These operations are supported by an infrastructure of 1,306 km of MDPE and 196 km of steel pipelines, 59,919 domestic connections, and 59 CNG stations.

HPCL LNG Limited (HPLNG)

HPCL LNG Limited (HPLNG), HPCLs wholly-owned subsidiary, has successfully completed its mandate of developing a 5 MMTPA LNG regasification terminal, bringing HPCL into the high-growth LNG sector. The greenfield terminal, located at Chhara Port in the Gir Somnath district of Gujarat, includes state-of-the-art marine infrastructure, storage tanks, and regasification facilities.

The pinnacle of the fiscal year was the successful commissioning of the terminal in January 2025. The facility is now in commercial operation, with both regasification and LNG tank truck loading units fully commissioned. The terminal received its inaugural two LNG cargoes, cementing its operational readiness. HPLNG was consolidated as a wholly-owned subsidiary in March 2021 upon the acquisition of the remaining 50% stake from SP Ports Private Limited.

Mumbai Aviation Fuel Farm Facility Pvt Ltd (MAFFFL)

Mumbai Aviation Fuel Farm Facility Limited (MAFFFL), a joint venture with Mumbai International Airport Limited (MIAL), IOCL, and BPCL, where each partner holds an equal 25% stake, delivered another year of strong growth. The company provides critical into-plane and fuel farm management services at Chhatrapati Shivaji Maharaj International Airport (CSMIA), Mumbai.

In fiscal year 2024–25, MAFFFL achieved a throughput of 17.44 lakh KL, registering a robust growth of 7.34% over the previous year. This solid operational performance translated into total revenue of ?171.10 Crore and a Profit After Tax (PAT) of ?75.96 Crore. The company continues to successfully manage the new Integrated Fuel Farm (IFF) facility, which it constructed and commissioned on an open-access basis.

HPCL Middle East FZCO (HMEF)

HPCL Middle East FZCO (HMEF), HPCLs wholly-owned subsidiary, demonstrated exceptional logistical and supply chain capabilities during the year. In an assignment of high prestige, HMEF played a key role in supporting the Antarctic expedition, successfully delivering 2,692 MT of specialized jet and bunker fuels at Cape Town. Further expanding its regional footprint, the company successfully entered the bunkering business in Oman for the first time, opening new avenues for trade.

These strategic achievements were complemented by a record-breaking operational performance in FY 2024-25. HMEF recorded its highest-ever sales volume of 7,326 MT, comprising 1,502 MT of finished lubricants, 2,692 MT of fuels, and 3,132 MT of base oil. This resulted in a total revenue of AED 29.63 million (?68.45 Crore) and a Profit After Tax (PAT) of AED 0.57 million (?1.324 Crore). HMEF operates from the Middle East and Africa, is registered under the Dubai Airport Free Zone Authority (DAFZA), and holds a trade license for lubricants and greases, petrochemicals, and refined oil products.

IHB Ltd (IHBL)

IHB Limited (IHBL), a joint venture with IOCL and BPCL holding equity in the ratio of 50:25:25, respectively, is developing a project of global significance. The company was incorporated to construct and operate the Kandla–Gorakhpur LPG Pipeline which, at a length of ~2,800 km, is the longest LPG pipeline in the world. This strategic asset is being developed to secure LPG supply for bottling plants across Gujarat, Madhya Pradesh, and Uttar Pradesh. The project has made remarkable progress, achieving 90% physical completion. A major milestone was reached during the year with the successful commissioning of a 78 km section in Gujarat, connecting IOCLs Dumad plant to BPCLs Hariyala plant.

HPCL Renewable & Green Energy Ltd (HPRGE)

HPCL Renewable & Green Energy Ltd was incorporated on 19 January 2024, as a wholly owned subsidiary of HPCL to foray into the green energy sector. The company is planned to manage business portfolios in areas such as biofuels, renewables, green hydrogen, carbon offsets, green mobility, and alternative energy.

HPRGE is currently working on multiple renewable energy projects with a total capacity of 226 MWp that are being implemented, while an additional 872 MWp is in development. These projects aim to achieve captive greening for various HPCL marketing locations and refineries through solar energy generation.

P. CAUTIONARY STATEMENT

Matters covered in the Management Discussion and Analysis report, describing the Companys objective, projections, estimates, and expectations may be ‘forward-looking statements within the meaning of applicable securities laws and regulations. The actual performance could vary from those projected or implied. Important or unforeseen factors that could make a difference to the Corporations operations include economic conditions, demand/supply and price conditions in the domestic and international market, changes in regulations and other incidental factors.

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