Key Events This Week
Jan 21: Q3 FY26 results reveal 58% profit surge
Jan 23: Sharp open interest surge amid weak price action
Jan 22: Downgrade to Hold rating by MarketsMOJO
Jan 23: Technical momentum shifts to sideways trend
Jan 19: Week Opens on a Weak Note Amid Broader Market Decline
HPCL began the week at ₹453.90, down 0.85% from the previous Friday’s close of ₹457.80. This decline was in line with the broader market, as the Sensex fell 0.49% to 36,650.97. The stock’s volume was robust at over 1.44 million shares, signalling active participation despite the negative start. The initial weakness set the tone for a challenging week ahead.
Jan 20: Accelerated Selling Pressure Amid Market Turmoil
The stock price dropped sharply by 3.43% to ₹438.35, underperforming the Sensex’s 1.82% decline to 35,984.65. Volume contracted significantly to 225,974 shares, indicating reduced investor participation amid the sell-off. This day’s steep fall reflected growing concerns among traders, possibly anticipating upcoming quarterly results and broader market volatility.
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Jan 21: Strong Q3 Results Boost Fundamentals but Price Continues to Slide
HPCL reported a robust Q3 FY26 performance, with net sales reaching ₹1,15,153.20 crores, up 14.21% year-on-year, and operating profit surging 22.69%. Profit after tax for six months soared by 192.99% to ₹7,870.70 crores, reflecting strong margin recovery. Despite these impressive fundamentals, the stock price declined 2.14% to ₹428.95, underperforming the Sensex’s 0.47% fall. This divergence suggests that investors remained cautious, possibly due to valuation concerns and technical factors.
Jan 22: Downgrade to Hold Reflects Technical Setbacks Despite Strong Earnings
MarketsMOJO downgraded HPCL from a 'Buy' to a 'Hold' rating, citing a shift in technical indicators despite the company’s solid financial results. The stock closed marginally lower at ₹427.70, down 0.29%. Technical analysis revealed a transition from mildly bullish to sideways momentum, with mixed signals from MACD, RSI, Bollinger Bands, and moving averages. This downgrade highlighted a more cautious stance amid evolving market dynamics and short-term price weakness.
Jan 23: Sharp Open Interest Surge Amid Weak Price Action Signals Bearish Sentiment
On the final trading day of the week, HPCL’s derivatives open interest surged by 15.95% to 42,449 contracts, accompanied by a futures volume of 34,185 contracts and a combined derivatives turnover of ₹1,18,156 lakhs. Despite this heightened activity, the stock price fell 2.90% to ₹415.30, underperforming the Sensex’s 1.33% decline. The increase in open interest amid falling prices suggests new short positions or hedging strategies, reflecting bearish sentiment among traders. Delivery volumes also declined sharply, indicating reduced long-term investor participation.
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| Date | Stock Price | Day Change | Sensex | Day Change |
|---|---|---|---|---|
| 2026-01-19 | Rs.453.90 | -0.85% | 36,650.97 | -0.49% |
| 2026-01-20 | Rs.438.35 | -3.43% | 35,984.65 | -1.82% |
| 2026-01-21 | Rs.428.95 | -2.14% | 35,815.26 | -0.47% |
| 2026-01-22 | Rs.427.70 | -0.29% | 36,088.66 | +0.76% |
| 2026-01-23 | Rs.415.30 | -2.90% | 35,609.90 | -1.33% |
Key Takeaways
Strong Fundamentals Amid Price Weakness: HPCL’s Q3 results demonstrated robust profit growth and operational strength, with a 58% surge in profits and solid return metrics. However, the stock price declined throughout the week, indicating that fundamentals alone did not drive investor sentiment.
Technical Momentum Shift: The downgrade to a Hold rating and the shift from mildly bullish to sideways technical momentum reflect a loss of near-term upward price conviction. Mixed signals from MACD, RSI, Bollinger Bands, and moving averages suggest consolidation rather than a clear trend.
Derivatives Market Activity: The sharp rise in open interest amid falling prices points to increased bearish positioning or hedging strategies. This heightened derivatives activity contrasts with declining delivery volumes, signalling reduced long-term investor commitment.
Relative Underperformance: HPCL underperformed the Sensex by nearly 6 percentage points during the week, highlighting sector-specific or company-specific challenges. Despite this, the stock’s long-term returns remain strong, outperforming the benchmark over one, five, and ten-year periods.
Conclusion
Hindustan Petroleum Corporation Ltd. experienced a difficult week marked by a significant 9.28% decline in its stock price, underperforming the broader market’s 3.31% fall. While the company’s Q3 financial results were impressive, delivering strong profit growth and operational resilience, the market’s reaction was tempered by technical setbacks and increased bearish positioning in derivatives. The downgrade to a Hold rating and the shift to sideways technical momentum underscore a cautious near-term outlook. Investors should weigh the company’s solid fundamentals and attractive valuation against the current technical and market dynamics, which suggest a period of consolidation and potential volatility ahead.
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