HPCL shares: Up to 46% upside or 'Reduce'? Brokerages split after Q3 FY26 results

Shares of Hindustan Petroleum Corporation Ltd (HPCL) have drawn mixed reactions from select brokerages following the company's Q3 FY26 earnings, with target prices ranging from Rs 400 to Rs 627, implying outcomes that vary from limited downside to as much as 46 per cent upside from recent levels.

Elara Capital maintained a bullish stance on the stock, highlighting the recent underperformance of HPCL shares. "HPCL's stock price fell around 6 per cent in the past three months, and underperformed benchmark Nifty Index (down 2 per cent), due to expectation of LPG losses in Q4 and concern over gasoline/diesel excise duty hike, though partly offset by strengthening refining margin," the brokerage said.

Elara reiterated its positive view with a 'BUY' call, citing a supportive crude oil environment, declining capex intensity, and progress on key projects. "Q3 FY26 marks another strong quarter for HPCL, with earnings resilience despite operational disruptions at Mumbai refinery, and clearer visibility on structural improvements from refinery upgrades, efficiency initiatives, and balance-sheet repair," it added.

The brokerage noted that weak global oil demand growth and rising supply could support retail margins. While it trimmed EBITDA estimates for FY26–FY28, Elara retained its target price of Rs 627, stating it offers a 46 per cent upside from its assessed market price of Rs 428.

Motilal Oswal Financial Services (MOFSL) also reiterated a 'BUY' call. "HPCL currently trades at 1.2x FY27E P/B," the brokerage said, adding that it expects RoE of 30.5 per cent in FY26 and 21.9 per cent in FY27, along with a FY27E dividend yield of 5.3 per cent. MOFSL highlighted that its estimates remain conservative, with no major benefit assumed from recent project start-ups, and reiterated its SoTP-based target price of Rs 600.

In contrast, JM Financial struck a more cautious tone despite broadly in-line operating performance. The brokerage noted that HPCL's standalone Q3 FY26 EBITDA of Rs 7,020 crore was largely in line with its estimates, though refining EBITDA was lower due to a softer reported GRM, while marketing EBITDA exceeded expectations. It also highlighted a reduction in gross debt during the quarter. However, JM Financial upgraded the stock only to 'REDUCE' from 'SELL', retaining its target price at Rs 410, citing valuation comfort, potential returns from the Rajasthan refinery project and expectations of margin normalisation.

Nuvama Institutional Equities pointed out that Q3 FY26 EBITDA and PAT missed its estimates due to weaker refining margins, inventory losses and higher LPG under-recoveries. The brokerage flagged contamination issues at the Mumbai refinery and noted that high capex could weigh on returns. "Risk-reward unfavourable," Nuvama said, retaining a 'REDUCE' rating with a target price of Rs 400.