Hindustan Petroleum Falls 2.76%: Valuation Upgrade and Market Volatility Shape Week

09 February 2026: Upgrade to Buy Signals Growing Confidence

On Monday, 9 February, HPCL’s share price edged up marginally by 0.09% to close at ₹463.50, supported by a MarketsMOJO upgrade from 'Hold' to 'Buy'. This upgrade was driven by a combination of improved technical indicators and robust financial fundamentals. The technical outlook shifted to mildly bullish, with monthly MACD turning positive and Bollinger Bands suggesting potential upward price movement. However, some oscillators remained cautious, indicating mixed momentum.

Valuation metrics were a key factor behind the upgrade. HPCL’s price-to-earnings ratio stood at a low 6.41, significantly below peer Oil India’s 13.34, signalling undervaluation. The price-to-book value ratio of 1.73 and a PEG ratio of 0.04 further underscored the stock’s attractive pricing relative to earnings growth. Additionally, the company’s return on capital employed (17.12%) and return on equity (24.49%) highlighted strong profitability and efficient capital use.

Financially, HPCL demonstrated solid growth trends with net sales and operating profits expanding at double-digit annualised rates. The company’s nine-month profit after tax surged by over 260%, reflecting a strong earnings recovery. Institutional confidence was evident with a 37.01% stake held by sophisticated investors, reinforcing the positive sentiment behind the upgrade.

10 February 2026: Valuation Upgrade Reinforces Price Appeal

The following day, 10 February, HPCL’s valuation parameters were further highlighted as a catalyst for investor interest. MarketsMOJO upgraded the valuation grade from 'very attractive' to 'attractive', reflecting a slight moderation but sustained appeal relative to historical and peer benchmarks. The stock closed at ₹461.10, down 0.52% on the day, despite the positive fundamental news.

The company’s enterprise value to EBITDA ratio of 5.79 remained well below Oil India’s 10.33, indicating efficient earnings generation. Return metrics such as ROCE and ROE continued to exceed industry averages, justifying the premium valuation relative to book value. The dividend yield of 3.34% added an income component to the investment case.

HPCL’s long-term returns remained impressive, with a 35.33% gain over the past year compared to the Sensex’s 7.97%, and a five-year return of 210.81% versus the Sensex’s 63.78%. These figures underscored the stock’s strong growth trajectory and value creation for shareholders, despite short-term price fluctuations.

11 February 2026: Modest Recovery Amid Market Stability

On 11 February, HPCL’s share price rebounded slightly by 0.18% to ₹461.95, as the broader market remained stable with the Sensex gaining 0.13%. Trading volume moderated to 72,554 shares, reflecting a cautious but steady investor interest. The stock’s performance on this day suggested some consolidation following the prior day’s dip, with investors digesting the recent upgrades and valuation shifts.

12 February 2026: Sharp Decline Amid Market Weakness

Tuesday, 12 February, saw a significant sell-off in HPCL shares, with the price falling 2.13% to ₹452.10 on heavy volume of 198,056 shares. This decline coincided with a broader market downturn, as the Sensex dropped 0.56%. The sharp fall reflected profit-taking and sector-specific pressures, possibly linked to volatility in crude oil prices and regulatory uncertainties affecting the oil refining sector.

13 February 2026: Week Closes Lower on Continued Selling

The week concluded on 13 February with HPCL’s stock price slipping a further 0.40% to ₹450.30, as the Sensex declined 1.40% amid persistent market weakness. Trading volume decreased to 67,763 shares, indicating reduced liquidity. The stock’s weekly performance underlined the challenges faced despite the fundamental upgrades earlier in the week, highlighting the impact of broader market sentiment and sector volatility on price action.

Key Takeaways

Positive Signals: The MarketsMOJO upgrade to a 'Buy' rating on 9 February was supported by improved technical momentum, attractive valuation metrics, and robust financial performance. HPCL’s low P/E ratio of 6.41 and strong returns on capital (ROCE 17.12%, ROE 24.49%) highlight its operational efficiency and earnings quality. The company’s consistent profit growth and dividend yield of 3.34% add to its investment appeal.

Cautionary Notes: Despite fundamental strengths, HPCL’s share price declined 2.76% over the week, underperforming the Sensex’s 0.54% fall. The sharp drop on 12 February amid broader market weakness underscores the stock’s sensitivity to sector volatility and external factors such as crude oil price fluctuations. Mixed technical indicators and profit-taking suggest that short-term price momentum remains uncertain.

Market Context: The broader market’s modest decline contrasted with HPCL’s sharper fall, indicating stock-specific pressures. Institutional confidence remains solid with a 37.01% stake, but investors should remain mindful of macroeconomic and regulatory risks impacting the oil refining sector.

Conclusion

Hindustan Petroleum Corporation Ltd’s week was characterised by a notable upgrade in investment rating and valuation appeal, juxtaposed against a declining share price and market volatility. The MarketsMOJO 'Buy' rating reflects confidence in the company’s strong fundamentals, attractive valuation, and solid financial growth. However, the stock’s underperformance relative to the Sensex and the sharp midweek decline highlight ongoing risks and market sensitivities.

Investors should weigh HPCL’s robust earnings quality and valuation advantages against the backdrop of sector-specific challenges and broader market fluctuations. The stock’s long-term track record of outperformance remains compelling, but near-term price action may continue to be influenced by external factors beyond company fundamentals.

Upgrade at special rates, valid only for the next few days. Claim Your Special Rate →