HPCL Share Price in Focus As It Plans to Increase Vizag Refinery Capacity by 20%

Hindustan Petroleum Corporation Limited (HPCL) is planning to raise the capacity of its Vizag oil refinery by up to 20% to meet growing local fuel demand. This expansion is part of India’s strategy to enhance its crude processing capacity as the country seeks to become a global refining hub.

Capacity Expansion Plans

HPCL has already increased the Vizag refinery’s capacity to 300,000 barrels per day. However, the company is looking to further boost its annual capacity by 2-3 million metric tonnes (around 40,000-60,000 barrels per day). The final decision will be made after obtaining board approval, as stated by HPCL’s chairman, Rajneesh Narang.

New Units at Vizag Refinery

The company will soon start operations at new secondary units at the Vizag refinery, including a 3.5 million-tonne-per-year residue upgrade unit. This unit will help boost distillate yield by 10% and improve the gross refining margin (GRM) by $3 per barrel. Additionally, a 2.6 million-tonne-per-year diesel hydro desulphuriser will also be operational soon.

Meeting Rising Fuel Demand

India’s fuel demand is expected to keep rising as the economy grows. However, with the increasing popularity of EVs and a shift to renewable energy sources in industries, HPCL is focusing on future-proofing its refineries.

Petrochemical Plant at Barmer Refinery

To diversify its operations, HPCL is constructing a petrochemical plant at its Barmer refinery in Rajasthan. This refinery will have the highest petrochemical intensity in India, converting 26% of crude oil into chemicals. The refinery is expected to begin crude processing in June-July, with the petrochemical project starting in December.

Crude Import and Trading Desk

HPCL imports about 21 million tonnes of crude oil annually, with 8-9 million tonnes procured from spot markets. Last year, the company established a crude trading desk to reduce crude import costs, enabling it to negotiate better deals directly with oil sellers.

HPCL share price is currently trading at ₹333.70, down by ₹4.60 (1.36%) as of 11:08 AM IST on February 11. The stock opened at ₹332.75, reached a high of ₹338.30, and a low of ₹331.50. The company has a market capitalisation of ₹71,010 crore, a P/E ratio of 11.78, and a dividend yield of 6.29%. Its 52-week high is ₹457.15, while the 52-week low is ₹295.37.

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