HPCL is an Indian state-owned oil and natural gas company headquartered in Mumbai. It operates two major refineries in Mumbai and Vishakhapatnam. The document analyzes HPCL's mission, vision, products, competitors, shareholding pattern, financial performance, ratio analysis, SWOT analysis, and future outlook. It recommends automating Kandla Terminal's manual operations to increase efficiency and support effective decision making.

1. Submitted by:- MAUMITA ADHIKARY
Roll No.:- DT-09/12
Subject code:- MS-245
Submitted to:- Prof. P.K. ROY
Submitted on:- 08/07/2014
WEST BENGAL UNIVERSITY OF ANIMAL AND FISHARY SCIENCES
A CRITICAL ANALYSIS REPORT ON
HPCL
1

2. Stock price: 500104
(BSE)Rs. 290.40 +7.20
(+2.54%)
7 Mar,2014 3:55 pm IST -
Disclaimer
Headquarters: Mumbai, In
dia 2

3. OBJECTIVES
To know about the brief introduction of HPCL
To know about Mission, Vision and Quality policy of HPCL
To know about the products as well as competitors of HPCL
To know about the share holding pattern and financial
assessment of HPCL
To know about the economic analysis of HPCL
To know about the ratio analysis
To know about the SWOT analysis and the industrial
analysis(Porter’s 5 forces) of HPCL
To know about strategies and the Research & development of
HPCL
To know about future outlooks of HPCL 3

4. METHODOLOGY
HPCL is the one of the largest refineries in the INDIA. They
have a mission, vision and future outlooks to enhance the
profit in future. There are so many petroleum based
products like lubes, petrol, diesel and others which have a
large market. There are so many share holders who holds
a huge no. of shares. Nowadays, HPCL has so many
competitor refineries. As it is a growing up company, so it
many ups and down in market. It also spread its business
outside of INDIA. Many on going projects & researches is
continued by this company. Analyzing marketing
strategies suggestions is given.
4

5. INTRODUCTION
HPCLis an Indian state-owned oil and natural gas company with Navranta Status. Its
operates two major Refineries Mumbai, Maharashtra(west zone), Vishakhapatnam(east
zone). HPCL headquarters is Mumbai, Maharashtra. It’s an oil industry which found in
1974. HPCL has been ranked 260th in the Fortune Global 500 rankings of the world's
biggest corporations (2013) and 4th among India's Companies for the year 2012. HPCL has
about 20% marketing share in India among PSUs and a strong marketing infrastructure.
The President of India owns51.11% shares in HPCL. It’s holds equity stake of 16.95% in
Mangalore Refinery & Petrochemicals Limited (MRPL). HPCL was featured on the Forbes
Global 2000 list for 2013 at position 1217. It is 10th most valuable brand in India according
to an annual survey conducted by Brand and The Economic Times in 2010. HPCL also
owns and operates the lube refinery in India producing Lube Base Oil of International
Standards. This Lube Refinery accounts for over 40% of the India’s total Lube Oil
production. HPCL is constructing refinery at Bathinda, in the state of Punjab, as a joint
venture with Mittal Energy Investment Pte. Ltd.
It’s business units includes-Refineries, Aviation, Bulk-fuel, LPG, Lubes, Retail, Trade, Joint
ventures and E&P (exploration and production).
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6. MISSION, VISIONANDQUALITYPOLICY
• MISSION: The mission of HPCL is to enhance their productivity,
profitability and quality of the products so that they can be the no. 1 in
the oil industry by taking into care the cultural heritage and the
environment and the customers and employee.
• VISION: The vision of HPCL is to be World Class Energy Company to be
known for its caring and delighting its customers with good quality
products in domestic and international market. The company will be
excellence in social commitments, environment, employee welfare and
relations, health and safety norms.
• QUALITY POLICY: The company is committed to deliver “Quality
Petroleum Products” to the costumer on time, every time in order to
achieve “Total Customer Delight”. As it’s important for all companies to
obtain customer’s satisfaction.
6

7. PRODUCTS
The main petroleum products of HPCL include:
• Petrol: Known as Motor Spirit(MS) in Oil Industry. HPCL markets the product through its retail pumps spread all over
India. Its principle consumers are regular personal vehicle owners.
• Diesel: Known as Heavy Stock Diesel(HSD) in Oil Industry. HPCL markets the products through its retail pumps as well as
terminals and depots. Its consumers are not only regular auto owners but also transport agencies, industries etc.
• Lubricants: Riding on its brand - HP Lubes, HPCL is the market leader in lubricant and associated products. It commands
over 30% of market share in this sector. The popular brands of HP lubes are Laal Ghoda, Milcy, Thanda Raja, Koolgard, Racer
4, etc.
• Aviation Turbine Fuel: With major ASF(Air Service Facility) present in all major airports of India. HPCL is a key player
in this sector supplying ATF to major airlines. It has an accomplishment of sorts to supply fuel to US Air Force 1.
• LPG: HP GAS, The HPCL brand of LPG is a popular brand across India for domestic and industrial uses.
• Furnace Oil: It’s black oil which is used in ships.
• Bitumen
The KANDLA TERMINAL is basically involved in receiving , storing and distribution of the finished products like MS, HSD, FURNES
oil and lubes. In KANDLE TERMINAL there are total 24 tanks in the terminal in that 3 tanks are underground and the rest 21
tanks are above ground and there is specific tank for every specific product.
7

8. INDUSTRY COMPITITORS
(stock shares by industry, as of 27/05/2014, by BSE)
COMPANY
NAME
OPEN HIGH LOW LAST
PRICE
PRV
PRICE
CHANGE % CHG NET
PROFIT IN
Cr. (2013)
BPCL 557.40 559.40 536.50 551.10 555.65 - 4.55 - 0.82 2642.90
Chennai
Petro
95.10 96.65 92.40 94.00 94.90 - 0.09 - 0.95 - 96.80
Essar Oil 83.55 87.00 79.20 85.90 83.70 2.20 2.63 - 1,180.44
HPCL 436.0 438.00 418.40 425.40 436.75 - 11.35 - 2.60 904.71
IOC 372.00 375.00 353.20 361.65 370.65 - 9.00 - 2.43 764.54
MRPL 70.00 70.20 66.70 67.90 69.90 - 2.00 - 2.86 - 247.68
RELIANCE 1105.00 1106.00 1076.05 1087.75 1101.00 - 13.25 -1.20 21,003.00
27/05/2014 8

9. GRAFICAL FIG. OF REFINARIES ON THE BASIS OF NET
PROFIT(2013)
-5000
0
5000
10000
15000
20000
25000
NET PROFIT (2013) (Rs. Cr)
NET PROFIT (2013) (Rs. Cr)
27/05/2014 9

10. SHARE HOLDING PATTERN (CONTD.)
(as of 31-3-2012)
NAME NO. OF SHARES HOLD % HOLD
THE PRESEDENT OF INDIA 173076750 51.11
FINANCIAL INSTITUTIONS 44613071 13.97
FII’s/OCB’s 23256521 8.66
BANKS 948131 0.13
MUTUAL FUNSDS 4106835 12.45
NRI’s 928090 0.29
EMPLOYEES - PHYSICAL 270845 0.08
PUBLIC 54465407 13.31
TOTAL 338627250 100
27/05/2014 10

11. SHAREHOLDING PATTERN
% HOLD
THE PRESEDENT OF INDIA
FINANCIAL INSTITUTIONS
FII’s/OCB’s
BANKS
MUTUAL FUNSDS
NRI’s
EMPLOYEES - PHYSICAL
PUBLIC
27/05/2014 11

12. FINANCIAL ASSESSMENT
REVENUE STATEMENT
Rs. In CRORES
MARCH’13 MARCH’12 MARCH’11 MARCH’10 MARCH’09
SALES TURNOVER 215,877.41 188,327.54 142,396.49 114,888.82 131,802.84
GROWTH(%) 14.62 32.25 23.94 12.83
NET SALES 206,958.80 178,735.50 133,213.79 107,300.57 124,935.02
GROWTH(%) 15.79 34.17 24.15 14.11
TOTAL INCOME 207,251.71 180,585.38 137,984.87 111,43.20 123,584.67
GROWTH(%) 14.76 30.87 23.82 9.83
TOTAL EXPENSES 201,887.69 175,513.48 133,329.50 107,236.82 119,796.96
GROWTH(%) 15.02 31.63 24.33 10.48
OPARETING
PROFIT
4,261.66 4,046.31 3,323.07 3,313.71 3,301.28
GROWTH(%) 5.32 21.76 0.28 0.37
NET PROFIT 904.71 911.43 1,539.01 1,301.37 574.98
GROWTH(%) 0.73 0.02 18.26 126.33
29/05/2014 12

13. GRAFICAL DIAGRAM OF HPCL ON THE BASIS OF NET SALES, NET PROFIT
AND TOTAL INCOME
NET SALES
NET PROFIT
TOTAL INCOME0.00
50,000.00
100,000.00
150,000.00
200,000.00
250,000.00
NET SALES
NET PROFIT
TOTAL INCOME
29/052014 13

14. ECONOMICANLYSIS
 The High oil prices have contributed to the widening of the
current account deficit.
 Oil production in the country increased marginally and oil
imports have increased over the year.
 The consumption of petroleum products in India despite
the slowdown in the economy, increased by 5% in 2012-2013
compared to 4.9% in 2011-2012. Petroleum product
consumption in 2012-13 was reaches about 155 MMT.
 With pan-India presence in refining & marketing, the
company has given about 25% of the country retail demand of
petrol, diesel & LPG.
 Apart from its business it has also invested in exploration &
production, renewable, biofules, gas.
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15. Swot analysis
Strength
1. Network of 1400 retail outlets
and more than 250 retail in
various stages of construction.
2. State of art technologies at
refinery.
3. Very active in CSR activities.
4. First Indian private sector
company to enter petro
retailing.
Weakness
1. Company operations are
bound by Govt regulations and
fluctuations.
2. Net sales are affected due to
increasing cost.
3. Environmental hazards from
wastages.
15

16. Opportunity
1. Demand-Supply gap in India.
2. Increasing natural gas market
globally.
3. Heavy industrialization
causing an increase in
demand for fuel.
Threats
1. Threats from competitors.
2. Competitors receiving
subsidies on taxes by central
and state government.
3. Economic instability and
fluctuations in India’s policies.
16

17. INDUSTRAL ANALYSIS (PORTER’S 5 FORCES)
1. THREAT OF NEW ENTRANS:
HIGH
• Developing customer base takes
long time.
• Product differentiation.
• Capital costs are high.
• Switching cost are high.
• Access to distribution channels.
• Gestation period is long.
• Government policies.
2. BARGAINING POWER OF
SUPPLIERS: MEDIUM
• Supplier industry is dominated
by Government firms. Degree of
fragmentation is more in
supplier.
• Supplier’s products have no
substitutes.
• Product of the supplier becomes
an important input to the
product of buyer.
• Demand for suppliers products.
• Suppliers’ products have high
switching costs.
17

18. 3. BARGAINING POWER OF BUYERS:
VERY LOW
• Buyers are heavily dependent on the product.
• Purchase accounts for a small fraction of supplier’s sales.
• Products are heavily dependent on the fuel for transportation.
• Supplier can sell to anyone irrespective of any restriction.
• Product quality in the hands of the supplier.
4. THREAT OF SUBSTITUTE PRODUCTS: LOW
• Clearly low substitute products as of now.
• R&D for the substitutes in nascent stage.
• Polymers allow better performance than substitutes in most application.
• But polymers are non-biodegradable and causes concern.
• Fiber intermediates are used which have better properties than
substitutes.
• The prices charged by the firms are limited to products with similar
function.
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19. 5. RIVALARY AMONG COMPETITIVE FIRMS: MEDIUM
INTENSE RIVAIRY IS DUE TO:
• Fragmentation is low.
• Rivalry is cyclical and often happens.
• Apart from prices, there is competition in quality, cost and
support.
• Making new product introductions.
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20. RATIO ANALYSIS
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Liquidity ratio HPCL(2012)
Current Ratio 0.79
Quick Ratio 0.14
Solvency Ratio
Debt to Equity Ratio 2.87
Debt Asset Ratio 0.63
Interest Coverage Ratio 3.17
Efficiency Ratio
Receivables Turnover Ratio 2.26
Inventory Turnover Ratio 8.52
Working Capital Turnover Ratio 36.18
Valuation Ratio
Earning per share Ratio 26.92
Price Earning Ratio 11.16
Dividend Payout Ratio 0.31
Book Value Per Share 387.10

21. STRATEGIESOF HPCL
•HPCL continually invests in innovative technologies to
enhance the effectiveness of employees and bring
qualitative changes in service.
•Business process Re-Engineering exercise
•Creation of strategic business units
•EPR implementation
•Organizational transformation
•Benchmarking of refineries and terminals for product
specifications.
21

22. REASEARCHANDDEVELOPMENT
• The Energy and Resource Institute (TERI), New
Delhi: Screening and selection of efficient microbial
strains.
• Indian Institute of Science (IISc), Bangalore: “Society
for Innovation and Development” (SID) is an innovation
centre of IISc and will collaborate on behalf of IISc with
HPCL.
• Advanced Research Technologies (ART), Chevron &
IIT Kanpur: HPCL has entered into a memorandum of
understanding with the following organizations.
• Advance Refining Technologies LLC (ART).
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23. FUTURE OUTLOOK
• The target price for HPCL is 336.
• The company is coming out with a joint venture
with Rajiv Gandhi Institute of Petroleum
Technology (RGIPT).
• As per the fundamental analysis the company is
good to invest for long term investments.
• Technically the company would be less profitable
to invest in short term.
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24. LIMITATIONOF STUDY
• Data can varies in future, because it may be
changed from the time of collection.
• Most of the data source are secondary.
• As all data collected from the web and news
papers, so data may be differ from the actual.
• Other universities like Centurion University,
Pralakhemundi; Tolani Institute of Management
studies, Adipur; also reported a project on HPCL in
past years.
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SERVEYOF LITARECY

25. RECOMENDETIONANDSUGGESTION
As this terminal of the organization is mainly
working manually so it should be converted into
fully automation, to make the work done quickly,
easily, efficiently and smoothly. The automation
will help this terminal to take the decision
effectively and it will also help the information
flow.
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26. COLLECTIONOF DATAANDDATE
• Stock market – (on 7th March,2014)
• Introductions – (on 9th May,2014)
• Stock shares –(on 27th May,2014)
• Share holding pattern –(on 27th May,2014)
• Financial assessment-(0n 27th May,2014)
• Research and development – (on 27th May,2104)
• Future Outlook – (on 27th May,2014)
• Annual report of the company(pdf file) – (on 27th
May)
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27. Bibliography
• MONEYCONTROL.COM
• HINDUSTANPETROLEUM.COM
• THE TIMES OF INDIA (NEWSPAPER)
• MONEY.REDIFF.COM
• TRADEECONOMIC.COM
• WWW.GOOGLE.COM
• WIKKIPEDIA.ORG
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