The board of Hindustan Petroleum Corp Ltd (HPCL) on Wednesday approved share buyback worth 2,500 crore.

The board has approved proposal to buyback 10 crore shares, which represents 6.56% equity share, at 250 per share.

The buyback price is at premium of 34% to HPCL stocks closing price on 4 November.

On Wednesday, HPCLs scrip on NSE closed 0.83% higher at 187.20.

HPCLs standalone net profit more than doubled during the September quarter at 2,477 crore as against 1,052 crore a year ago.

However, the total income decreased to 62,419 crore as compared to 66,854 crore in September 2019.

The significant improvement in the profitability in spite of challenges including lockdown due to COVID-19 pandemic was a result of strategic planning in refinery and marketing operation, containing the de-growth to less than the industry, efficient inventory management and effective production placement, HPCL Chairman and Managing Director Mukesh Kumar Surana told reporters on a call, reported PTI.

The firm earned USD 5.11 on turning every barrel of crude oil into fuel in the second quarter of 2020-21 fiscal as compared to a gross refining margin of USD 2.83 a barrel.

This included a USD 2.33 per barrel inventory gain from buying cheaper crude oil earlier and processing in Q2. This translated into 1,780 crore of gain. Besides, the firm also had a forex gain of 524 crore, he said.

Surana said the nationwide lockdown imposed to contain the spread of the pandemic in India led to significant demand contraction of petroleum products in April 2020 and the sales were down by over 48.5 per cent as compared to the previous year.

However, with the subsequent relaxations announced by the central and state governments and gradual opening up of economy, the demand of petroleum products picked up sharply. Overall sale of petroleum Products has reached to the level of 98 per cent in September 2020 compared to the sales in September 2019, the HPCL CMD said.

Domestic sales volume during July-September was 8.10 million tonnes compared to 8.95 million tonnes last year, which was 90.5 per cent of the last year volume during the same period.

During the quarter, 303 new retail outlets were commissioned taking the total retail outlet network to 17,171 as of September 2020. HPCL also commissioned 37 new LPG distributorships during the quarter, taking the total LPG distributorships to 6,153 as of September 2020.

To ensure availability of alternate fuels and offering more choices to customers, CNG dispensing facilities were commissioned at 103 retail outlets during April to September 2020, taking the total number of retail outlets with CNG facilities to 574, he said. With commissioning of 42 mobile dispensing equipment during the period to for door-to-door delivery of diesel, the total number of mobile dispensing equipment were enhanced to 60.

With inputs from PTI

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