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HPCL doubles FY14 profit to Rs 1,734 cr

State-owned Hindustan Petroleum Corp Ltd (HPCL) on Wednesday reported a better than expected fourth quarter net profit of Rs 4,609.24 crore after it got lumpsum fuel subsidy.Net profit of Rs 4,609.24 crore in January-March beat street estimate of Rs 3,170-3,460 crore but was lower than Rs 7,679.31 crore net profit in the same period a year ago. HPCL Chairman and Managing Director Nishi Vasudeva said the Q4 profit is not comparable as last year the government released a backlog fuel subsidy.

Retailers like HPCL sell diesel and cooking fuel at rates way below cost. Roughly half of these losses are compensated by the government by way of cash subsidy.  The company lost Rs 9,183 crore on selling diesel, domestic LPG and Kerosene at government controlled rates in Q4. Against this, it got Rs 5,671 crore assistance from the upstream firms and Rs 6,938 crore in cash subsidy from the government.
The cash subsidy was to cover for losses HPCL had incurred in previous quarters as well, HPCL Director (Finance) K V Rao said.
In the full year, the company got Rs 15,215 crore in cash subsidy and Rs 16,771 crore in assistance from upstream firms, leaving Rs 482 crore uncovered loss. He said the company earned $4.66 on turning every barrel of crude oil into fuel as compared to $3.71 a barrel gross refining margin (GRM). Turnover rose 4.73 per cent to Rs 64,126.81 crore.

For the full fiscal 2013-14, the company reported almost doubling of net profit to Rs 1,733.77 crore. HPCL had reported net loss in two out of the previous three quarters in 2013-14.
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