HPCL Q4 Profit Falls 25%; Announces Bonus Issue
Hindustan Petroleum Corporation Ltd (HPCL) has released its financial results for the fourth quarter of the fiscal year 2023-24, revealing a 25% decline in net profit compared to the same period last year. The company attributes this decrease to lower refining margins. However, HPCL also announced a bonus issue of one share for every two shares held, indicating confidence in its long-term prospects.
For the quarter ending March 2024, HPCL reported a consolidated net profit of Rs 2,709.31 crore, down from Rs 3,608.32 crore in the corresponding period of the previous fiscal year. This dip in profitability is primarily attributed to reduced refining margins, with the company earning Rs 578.73 for every barrel of crude oil processed, compared to Rs 709.85 per barrel in the previous quarter.
Despite the decline in net profit for the quarter, HPCL’s turnover increased to Rs 1.22 lakh crore, up from Rs 1.15 lakh crore in the same period last year. This indicates robust operational performance and suggests that the company remains resilient despite challenges in the market.
In a move to reward shareholders, the HPCL board approved a bonus issue in the ratio of 1:2, meaning shareholders will receive one bonus share for every two shares held. This decision reflects the company’s commitment to enhancing shareholder value and confidence in its future growth prospects.
Looking at the broader picture, HPCL has reported a significant turnaround in its financial performance for the full fiscal year 2023-24. The company achieved a record net profit of Rs 16,014.61 crore, marking a stark contrast to the loss of Rs 6,980.23 crore incurred in the previous fiscal year. This remarkable improvement underscores HPCL’s successful efforts in optimizing operations, managing costs, and capitalizing on favorable market conditions.
The bonus issue announcement is a strategic move by HPCL to reward its shareholders and demonstrate confidence in its financial strength and future growth potential. By issuing bonus shares, the company effectively increases its share capital without affecting its reserves, thereby enhancing liquidity and marketability of its shares.
HPCL’s decision to issue bonus shares also signals its commitment to maintaining an attractive investment proposition for existing and prospective shareholders. Bonus shares not only enhance shareholder value but also improve market liquidity and broaden the shareholder base, which can contribute to greater stability and resilience in the stock price.
In conclusion, despite the short-term decline in net profit for the fourth quarter of the fiscal year 2023-24, HPCL’s overall financial performance remains robust. The company’s decision to issue bonus shares underscores its confidence in its long-term growth prospects and commitment to creating value for shareholders. With a record net profit for the full fiscal year, HPCL has demonstrated its ability to adapt to changing market dynamics and emerge stronger, positioning itself for sustained success in the future.
