HPCL had heads turning towards it in a weak market after the company's results late Thursday came in better than expectations.

By 10:04 IST on Friday, the scrip of the oil refining and marketing company edged up 1% to Rs 292.30. Volumes of around 77,525 HPCL shares were recorded on BSE till then.

On Thursday, after market hours, HPCL said that third quarter ended 31 December 2002 net profit rose a gigantic 444% to Rs 330.62 crore (Rs 3.3 billion) compared to Rs 60.81 crore (Rs 6.08 billion) in the corresponding period of the previous year. Net sales jumped 28% to Rs 14,210.23 crore (Rs 142.1 billion) from Rs 11,1156.38 crore (Rs 1111.56 billion) in DQ 2001.

Both net profit as well as net sales beat estimates of a capitalmarket.com poll of three oil analysts - a net profit of Rs 145 to Rs 158.6 crore (Rs 1.45-1.58 billion) on net sales of Rs 12,155-12,550 crore (Rs 121.55-Rs 125.5 billion).

HPCL's board of directors has also recommended an interim dividend of 20% (ie Rs 2 per share) for the financial year 2002-03. The company attributed the solid performance to buoyant international prices coupled with improved refining and marketing margins.

Growth was recorded in sales of almost all categories of produicts - LPG (9.5%), MS (8.9%), HSD retail (2.3%), AFT (6.2%), FO (6.1%), bitumen (24.4%), lubricants (27.6%), naphtha (4.5%) and LSHS (4.1%). Only kerosene (4.3%) moved negatively.

Analysts were expecting the stock to perform exceedingly well today after the strong results announced yesterday, but its gains have been toned down by concerns over the looming war between the US and Iraq. The market today has also been impacted by a slump in US indices Thursday.

Last week, the Cabinet Committee on Disinvestment announced its approval for the divestment of government stake in HPCL (as well as the modus operandi for divestment), though it has not specified the timeframe for their sale.

34.01% of HPCL's equity (government-held) will be sold to a strategic partner and 5% to the company's employees. The government will retain 12%. Currently, the government holding in HPCL, is 51.01%.

HPCL has about 4,600 retail outlets and a 20% market share in retailing petroleum products.

BSE Code: 500104