Hindustan Petroleum Corporation Ltd (HPCL) March quarter earnings beat Street estimates, aided by strong marketing performance. However, the West Asia conflict has weakened the oil marketing company’s near-term outlook, with several brokerages projecting losses in the ongoing June quarter. HPCL management assured adequate crude availability, with supplies secured till mid-July. That said, analysts said a sharp rise in crude prices, weak product prices, continuing volatility and currency depreciation are likely to result in losses in Q1FY27, making the risk-reward unfavourable for the stock.

For the March quarter, said Equirus Securities, HPCL reported a strong beat in an otherwise challenging quarter, with earnings materially ahead of consensus expectations, driven by surprising marketing performance and strong refining profitability. Despite sharply adverse macro conditions including higher crude prices, rupee depreciation and deeply negative implied auto-fuel margins, calculated marketing margins surprisingly improved.

"Incremental benefits from the Vizag residue upgradation facility (RUF) would accrue from Q2FY27, while the Barmer refinery (HRRL) is slated for full commissioning by mid-May-26. We largely retain FY27-28E Ebitda. We retain ADD with an unchanged target of Rs 410," Emkay Global said.

Foreign brokerage Nomura India expects sharp losses in the fuel and LPG marketing segment in Q1 with the current run rate of Rs 27 per litre blended loss in petrol and diesel and Rs 680 per cylinder under-recovery in LPG. 

"We believe fuel retailing losses will be partly offset by a windfall tax on diesel exports for standalone refiners; however, OMCs are staring at significant losses in the absence of meaningful fuel price hikes," Nomura said while downgrading the stock to 'Neutral' with a lower target price of Rs 440. 

MOFSL said HPCL currently trades at 1.1 times FY27 book value. It estimated the company to deliver return on equity (RoE) of 16.2 per cent in FY28 and a 5.4 per cent FY28 dividend yield. 

"We have not assumed any significant benefit from the start-up of a bottom-upgradation unit and Project Samriddhi. We reiterate our BUY rating on the stock with an SoTP-based target of Rs 455," it said.

Nuvama said Q1FY27 may see a loss owing to weak marketing margins on high crude prices. Saying risk reward is unfavourable, it retained its 'reduce' on the stock with a target of Rs 372.