HPCL Q2 net profit doubles, announces share buyback

HPCL Q2 net profit doubles, announces share buyback

Shares of Hindustan Petroleum Corporation (HPCL) surged more than 9% to Rs 203.95 apiece Thursday, following the state-owned refiners decision to buyback shares worth Rs 2500 crore from the open market route.
It proposed to repurchase 10 crore shares at Rs 250 per share, which is 34% higher than its stock’s closing price that stood at Rs 186.75 on Wednesday.
Meanwhile, HPCL declared earnings performance for the fiscal second quarter. It has registered a net profit of Rs 2477.4 crore in the September quarter which is more than double compared to the corresponding figure of Rs 1,052.3 crore a year ago. However, the revenue declined by 14.9% YoY, from Rs 60,868.4 crore to Rs 51,773.3 crore.
Owing to the lockdown, the company’s sales were down by over 48.5% in April this year, compared to the same period a year ago. But following successive relaxations by the government, the demand of petroleum products picked up and has reached about 98% in September against last year’s numbers.
HPCL earned $5.11 per barrel in refining crude oil to fuel during the quarter, a sharp increase from $2.83 per barrel last year. A lot of it has to do with the fall in global crude oil prices.
The refiners shares have much more intrinsic value than what is reflected in the market. Hence, the buyback must unlock value for shareholders.

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