Whalesbook
Barmer Refinery Nears Operational Readiness
Hindustan Petroleum Corporation Limited (HPCL) is nearing the operational launch of its significant Barmer refinery in Rajasthan. Crude oil is expected to be introduced into the crude distillation unit (CDU) by the end of January 2026. This 180,000 barrels per day (9 MMTPA) facility represents a substantial addition to HPCL's refining infrastructure. The refinery has already received various crude grades, including Azeri, Mesla, Nemba, and Okwuibome [cite: Live Events section of Source A].
Strategic Shift in Refining Landscape
Upon commissioning, the Barmer refinery will significantly increase HPCL's total refining capacity. This expansion is projected to elevate HPCL to become the second-largest state-run refiner in India, surpassing Bharat Petroleum Corporation Limited (BPCL). Currently, BPCL operates a total refining capacity of approximately 35.3 million metric tons per annum (MMTPA) across its Mumbai, Kochi, and Bina refineries. HPCL's existing refineries in Mumbai and Visakhapatnam, along with its stake in the Bathinda refinery via HMEL, contribute to its current refining network. Including the Barmer addition, HPCL's aggregate refining capacity, inclusive of joint ventures, is set to approach 45 MMTPA, aligning with its target of 45.3 MMTPA by fiscal year 2028.
Operational Milestones and Financial Performance
HPCL has demonstrated strong operational performance, with its refineries achieving high capacity utilization. In the first nine months of fiscal year 2026 (9M FY26), HPCL's refineries operated at peak capacity, recording the highest-ever crude throughput of 19.61 MMT. The company recently commissioned a Residue Upgradation Facility (RUF) at its Visakh Refinery, enhancing its ability to process heavy residues into higher-value products. Financially, HPCL reported a Profit After Tax (PAT) of ₹12,274 crore for 9M FY26, marking a significant year-on-year increase. The company's Gross Refining Margin (GRM) stood at a strong US$ 6.91 per barrel for the same period.
Market Position and Valuation
As of January 22, 2026, HPCL's stock was trading in the range of ₹426-428 per share. The company's market capitalization is approximately ₹91,000-92,000 crore. Its Price-to-Earnings (P/E) ratio is trading around 6 to 7 times, indicating a value-oriented investment profile based on current earnings. A board meeting was held on January 21, 2026, to review the company's unaudited financial results for the third quarter of fiscal year 2026, with a conference call following on January 22, 2026, to discuss these results.
Peer Comparison: Refining Capacity Growth
Both HPCL and BPCL are actively expanding their refining capacities. While BPCL currently operates approximately 35.3 MMTPA, it has plans to increase this to 45 MMTPA by 2028. HPCL's addition of the Barmer refinery, alongside other ongoing projects, is set to place it as a leading refiner in India. The broader Indian refining sector is experiencing growth, with plans to add substantial capacity by 2028 to meet rising domestic and export demand.