Morgan Stanley has maintained an ‘Overweight’ rating on Hindustan Petroleum Corporation Ltd (HPCL) and raised its target price to ₹516, indicating a potential upside of 28% from the current market price of ₹403.00.
The brokerage highlighted that HPCL outperformed its and consensus expectations in Q1FY26. The company reported a core PAT of ₹59,000 crore, adjusted for an estimated inventory loss of ₹19.5 billion (US$4.7/bbl) and forex losses of ₹700 million. Integrated margins stood at US$12.5/bbl — ahead of estimates — despite including LPG losses of US$3.6/bbl.
Morgan Stanley noted that even if HPCL were to shift around one-third of its crude sourcing from Russian to Middle Eastern suppliers, the estimated 5% EPS impact is already priced in. The brokerage added that HPCL’s reported earnings suggest a ~20% upside to street estimates.
While marketing volumes grew 1.6% YoY, slightly above industry levels, the report acknowledged a decline in HPCL’s market share in transport fuels due to competitive pressure in industrial diesel.
Disclaimer: The views and recommendations expressed in this article are those of the brokerage firm, Morgan Stanley, as reported. This does not constitute a recommendation by this publication. Investors are advised to consult a certified financial advisor before making any investment decisions.
