Hindustan Petroleum Corp. Ltd. (HPCL) has postponed the planned demerger of its lubricants business, opting to focus instead on expanding and strengthening its consumer-facing operations before revisiting any separation, the company said. The state-run refiner said it would continue building scale and market presence in the lubricants segment to enhance value for shareholders over the long term.
The move follows HPCL’s September 2023 board decision granting in-principle approval to explore a spin-off of its lubricants division, pending clearances from India’s Department of Investment and Public Asset Management, which oversees restructuring of state-owned enterprises. The company’s latest review determined that an immediate separation would not optimize returns given the growth trajectory and profitability of its lubricants business, one of HPCL’s strongest-performing segments in recent years.
According to its 2024-25 annual report, the company remains India’s largest marketer of automotive and industrial lubricants, with plans to grow its presence in overseas markets such as Sri Lanka.
HPCL Chairman and Managing Director Vikas Kaushal said the company had concluded that expanding the consumer-oriented side of the lubricants business would create more sustainable value.
“We figured out that the better value for HPCL and its stakeholders is not to immediately deleverage – not to immediately unlock that business, but build the consumer-facing part of that business bigger and stronger, so that it gets the right return around it,” Kaushal said during the company’s second-quarter fiscal 2026 earnings call on October 31, 2025.
The refiner reported a 731% year-on-year increase in profit after tax for the first half of fiscal 2026, reaching INR 8,201 crore (U.S.$934 million), supported by improved refining margins, efficiency gains, and cost controls. HPCL has generated more than $342 million in quarterly profit for the past year, with $3.26 billion from core operations and $2.28 billion in cash flow over the same period. Total borrowings fell to $6.36 billion by September 2025, from $7.22 billion in March, lowering its debt-to-equity ratio to 1.07.