Hindustan Oil Exploration Company (HOEC) posted a standalone net profit of ₹30.40 crore for Q4 FY26, despite reporting negative revenue. This was due to a ₹258.78 crore reversal from a cancelled crude oil sale agreement with HPCL. The company expects resolution through conciliation.

Hindustan Oil Exploration Company Q4 FY26 Results

HOEC posts ₹30.40 crore standalone profit; revenue shows negative ₹194.28 crore for Q4 FY26.

Reader Takeaway: Profitability remains despite a large one-time accounting reversal; conciliation outcome is key.

What just happened

Hindustan Oil Exploration Company Limited (HOEC) announced its audited financial results for the quarter and financial year ended March 31, 2026. The company reported a standalone net profit of ₹30.40 crore for the fourth quarter (Q4 FY26). However, standalone revenue from operations for the same period was reported as negative ₹194.28 crore.

This unusual revenue figure is due to a significant accounting adjustment following the cancellation of a Crude Off-take and Sale Agreement (COSA) with Hindustan Petroleum Corporation Limited (HPCL).

Why this matters

The negative revenue is a direct result of reversing ₹258.78 crore in sales previously recognized during the year, because the COSA with HPCL was mutually cancelled due to quality issues raised by HPCL. Despite this reversal, the company achieved a positive standalone net profit, indicating underlying operational profitability. However, the cancellation and subsequent conciliation process with HPCL introduce uncertainty.

The backstory

HOEC had entered into the COSA with HPCL in the quarter ended September 30, 2025. Subsequently, HPCL raised quality-related concerns. This led to the mutual decision to cancel the agreement. As part of the adjustment, HOEC recorded its crude oil inventory at the customer's premises at its net realizable value of ₹272.63 crore.

What changes now

The company is currently engaged in a conciliation process with HPCL, facilitated by a former Chief Justice of a High Court, to resolve the dispute. The outcome of this conciliation will be crucial for potential future financial settlements and clarity on liabilities.

Risks to watch

Investors should closely monitor the conciliation process with HPCL. The dispute also highlights the risk associated with customer concentration, as a significant portion of the company's offtake was tied to a single major customer.

Auditor Remarks

Statutory auditors B S R & Co. LLP issued an unmodified opinion on the financial results. They specifically drew attention to the note detailing the COSA cancellation and the associated accounting adjustments.

Context metrics (time-bound)

For Q4 FY26, HOEC reported standalone revenue of ₹(194.28) crore and a standalone net profit of ₹30.40 crore. Consolidated net profit for the quarter stood at ₹7.77 crore.