Hindustan Petroleum March-quarter net drops 28% to Rs 1,553 crore

State-run Hindustan Petroleum Corporation Ltd (HPCL) on Friday reported a 28% drop in its March quarter net profit on provisioning for rise in rentals and foreign exchange losses.

The company also announced investing Rs 26,000 crore in expanding its Mumbai and Vizag refineries. Net profit of Rs 1,552.94 crore in January-March 2016 was 28.18% lower than Rs 2,162.39 crore in the same period a year ago.

The profit was lower as the company provisioned Rs 215 crore for rise in lease rental by the Delhi government, HPCL Chairman and Managing Director M K Surana told reporters here.

Also, there was a foreign exchange loss of Rs 203 crore in the quarter. Another Rs 81 crore was set aside as provisions towards arbitration on cost of LPG cylinders, he said.

Crude oil processing was higher at 4.7 million tonnes from 4.45 million tonnes in the previous year. Fuel sales also soared to 9.05 million tonnes from 8.19 million tonnes in the fourth quarter of 2014-15 fiscal. 

Surana said HPCL will invest Rs 18,000 crore in raising Vizag refinery capacity from 8.33 million tonnes to 15 million tonnes. It will invest another Rs 8,200 crore in raising Mumbai refinery capacity to 9.5 million tonnes from current 6.5 million tonnes.

"Expansion will be synchronised with the roll out of BS-VI fuel in the country from 2020," he said. Also, HPCL is raising capacity of its joint venture Bhatinda refinery from 9 million tonnes to 11.25 million tonnes by February/March 2017, he said. For 2016-17, HPCL has planned a capex of Rs 6,300 crore.