Citi has reaffirmed its ‘Buy’ rating on Hindustan Petroleum Corporation Ltd (HPCL) and raised its target price to ₹510 from ₹460, citing higher EBITDA estimates for FY26 and FY27, along with potential upside from LPG under-recovery compensation by the government.
The brokerage has revised refining and marketing margin assumptions upward, driven by better-than-expected product spreads and sustained demand in domestic auto fuels. It now sees HPCL’s EBITDA rising 10% and 5% for FY26 and FY27, respectively.
Citi also highlighted the possibility of government support in the form of LPG subsidies or compensation, which, if announced, could positively impact profitability and ease working capital pressures. It believes the combination of structural volume growth, improving profitability metrics, and regulatory tailwinds makes HPCL an attractive risk-reward bet in the OMC basket.
Disclaimer: The above views are those of the brokerage and not the publication. Investors should consult a certified financial advisor before making investment decisions.
