Hindustan Petroleum Corporation Limited (HPCL) is entering a new phase of growth after completing a significant investment cycle, with the company now focusing on unlocking value from its assets, improving operational efficiency and strengthening its balance sheet. In his address at the company’s 74th annual general meeting, Vikas Kaushal, Chairman and Managing Director, HPCL, outlined the company’s performance during 2025-26, the challenges facing the oil and gas sector and the strategic priorities for the years ahead. Edited excerpts…
The company’s performance during 2025-26 has to be seen against the backdrop of a challenging operating environment marked by geopolitical tensions, supply disruptions and price volatility. The closure of the Strait of Hormuz contributed to significant disruptions in energy supplies, while tariff-related actions in several parts of the world added to the uncertainty. Against this backdrop, HPCL continued to supply fuel and cooking gas while partially absorbing the impact of higher prices.
Record financial performance
For HPCL, 2025-26 marked a significant year in terms of financial performance. The company reported gross sales of Rs 4.76 trillion and its highest-ever standalone profit after tax (PAT) of Rs 171.75 billion. Its PAT was 17 per cent higher than the previous peak recorded in 2023-24. The company also reported an average gross refining margin of $8.79 per barrel. The strong financial performance also supported a substantial improvement in the company’s balance sheet, with the debt-equity ratio declining from 1.38 as of March 31, 2025 to 0.8 as of March 31, 2026.
HPCL proposed a final dividend of Rs 19.25 per equity share for 2025-26, taking the aggregate dividend for the year to Rs 24.25 per share. The total dividend payout stood at approximately Rs 51.6 billion.
The company also continued its focus on operational improvement through Project Samriddhi, launched in May 2025. The initiative is aimed at unlocking sustainable value, improving operational agility and strengthening execution discipline. During 2025-26, Project Samriddhi generated EBITDA improvement benefits of Rs 16.91 billion. Samriddhi 2.0 has subsequently been launched in the current financial year.
Strengthening refining capabilities
HPCL delivered a strong physical performance during the year, achieving its highest-ever refinery throughput of 26.04 million tonnes (mt) and an average capacity utilisation of 106 per cent.
The Visakh refinery processed 16.04 mt of crude, while the Mumbai refinery processed 10 mt. A key milestone was the commissioning of the residue upgradation facility at the Visakh refinery. The facility incorporates LC-MAX technology and is designed to transform 93 per cent of bottom-of-the-barrel residue, thereby improving product value realisation.
The company expects the facility, once stabilised at the designed operating performance, to position the Visakh refinery among the more sophisticated refining complexes in the region. The facility is also equipped with a digital twin, Digi Suite, which provides real-time process insights, and monitors catalyst performance and equipment health through data analytics.
HPCL has also expanded its crude sourcing portfolio. During the year, the company added 10 new crude grades and expanded its refining capability to process 188 grades of crude. Its crude sourcing network now covers the Middle East, Africa, the Americas, Europe, Russia and the Far East, in addition to domestic sourcing.
The diversified sourcing strategy is intended to enhance procurement flexibility, optimise costs and strengthen supply security.
Expanding the marketing network
HPCL recorded its highest-ever sales volume of 51.45 mt during 2025-26, registering a growth of 3.3 per cent. The company’s pipeline network, the second largest in the country, handled a throughput of 25.54 mt. The retail network expanded to 25,098 outlets. HPCL also increased its alternative energy and electric vehicle charging facilities, including battery swapping stations, to 5,533 locations. Its CNG network expanded to 2,253 sites. In the liquefied petroleum gas (LPG) business, HP Gas served nearly 99 million customers through a network of 6,389 distributors, retaining its position as the country’s second largest LPG marketer.
HPCL’s overseas operations also expanded, with its wholly owned subsidiary, HPCL Middle East FZCO, increasing its presence in markets across the Middle East and Africa. During the year, the company exported nearly 2.92 mt of petroleum products to 21 countries.
Investment cycle strengthens growth platform
HPCL continued to make progress on its capital expenditure programme during 2025-26. Several major projects were commissioned, including the Bathinda-Sangrur and Barmer-Palanpur multi-product pipelines, the Mundra crude oil terminal linked to HPCL Rajasthan Refinery Limited (HRRL) and associated crude pipelines. In marketing infrastructure, the Bhogapuram aviation fuel tank farm achieved mechanical completion and subsequently became operational.
Other projects completed during the year included the Jaipur-Panipat augmentation, the petrochemical evacuation marketing terminal at Barmer with liquid petrochemical loading facilities and the product tank trunk gantry at Padra. Several projects are progressing towards completion, including the Haldia-Panagarh LPG pipeline and the Visakh-Raipur pipeline, which are expected to strengthen the company’s LPG distribution and product evacuation capabilities.
The lubricants modernisation and bottom upgradation project at the Mumbai refinery is also progressing. The project is expected to increase base oil capacity and production of high quality lubricants, supporting margin improvement at the refinery.
Focus on R&D and sustainability
Research and development (R&D) remains an important component of HPCL’s strategy. The company’s corporate R&D centre in Bengaluru is working on technologies aimed at improving operational efficiency and cost effectiveness. During 2025-26, the R&D centre filed 118 patents, taking the cumulative patent portfolio to 779 as of March 31, 2026.
HPCL also maintained its focus on health, safety and environmental performance. During the year, the company achieved an ethanol blending rate of 19.94 per cent. Under the government’s Sustainable Alternative Towards Affordable Transportation (SATAT) initiative, HPCL added three new compressed biogas (CBG) plants, taking its total number of CBG plants under the scheme to 18.
The company’s refineries achieved energy savings of more than 86,542 standard refining fuel tonnes through various energy conservation measures.
Managing near-term challenges
The company’s performance in the first quarter of 2026-27 was affected by fresh geopolitical disruptions. The Middle East conflict and the closure of the Strait of Hormuz created significant challenges for crude and LPG availability. The closure disrupted regular imported LPG supplies and also affected crude availability. HPCL worked to arrange alternative sources of crude and LPG and continued meeting customer requirements despite demand spikes.
While these disruptions led to a significant financial loss in the first quarter of 2026-27, the company’s strong balance sheet and performance in 2025-26 enabled it to withstand the pressure during the quarter.
Three strategic priorities
HPCL’s forward agenda is centred on three principal areas: growth in the core business, improvement in production and efficiencies, and digital transformation.
In the retail business, the company is focusing on strengthening its brand and improving customer service. HPCL has introduced HP Navya, a premium LPG product, through new channels and a new delivery mechanism. In branded fuels, products such as Power 95, Power 100 and Turbojet are being expanded. HPCL is also increasing the range of services available at its retail outlets, including quick service restaurants, convenience stores, convenience kiosks and vehicle care centres.
The second priority is to improve production and efficiency across the company’s refining assets. HPCL is targeting higher efficiency, improved yields, greater crude flexibility and digitally enabled optimisation. The company expects the HRRL refinery, which has recently been inaugurated and is undergoing stabilisation, to provide a refining margin uplift. The refinery has a configuration that includes a delayed coker unit. The residue upgradation facility at the Visakh refinery is also expected to contribute to improved performance. HPCL aims to increase distillate yields from the mid-70 per cent range to above 80 per cent on a consistent basis.
Digital transformation is the third major pillar of HPCL’s strategy. The company has developed a digital roadmap, referred to as its digital North Star, covering individual business verticals as well as enterprise-level initiatives. HPCL is investing in modern cloud platforms to support advanced analytics, artificial intelligence (AI) and machine learning applications. The company is implementing real-time optimisers and advanced process controls across its refineries. Generative AI and AI agents are also being deployed in support functions. These technologies are central to the ongoing transformation of the procurement function, alongside the creation of a centralised procurement office aimed at improving efficiencies.
Next growth phase
HPCL now stands at the threshold of a new growth phase after completing one of the largest investment cycles in its history, with investments of close to $15 billion over the past five years. The company’s immediate focus is to unlock value from its assets and deliver sustainable returns to shareholders. At the same time, it intends to maintain balance sheet strength, exercise prudent capital allocation, optimise costs and improve returns on investments.
HPCL’s next growth phase will be driven as much by operational excellence as by expansion. Alongside its core businesses, the company is investing in future-focused opportunities, including biofuels, renewable energy, gas and other emerging energy solutions. The company will continue to focus on energy security while strengthening its operational capabilities, people, digital tools and processes.
HPCL aims to build on its transformation journey and position itself as a larger, more efficient energy major. The company’s future agenda therefore combines the optimisation of recently commissioned assets with continued growth in its core businesses, digital enablement and investments in emerging energy opportunities.
