Hindustan Petroleum Falls 9.36%: 4 Key Factors Driving the Weekly Decline

Jan 5: Peak Performance with New 52-Week and All-Time High

HPCL began the week on a strong note, reaching an intraday high of Rs.508.45 on 5 January 2026, marking both a new 52-week and all-time high. This represented a 2.56% intraday gain and a 0.69% closing day increase, outperforming the Sensex which declined by 0.18%. The stock’s rally was supported by robust financial fundamentals, including a 57.9% increase in profit before tax excluding other income and a 51.2% rise in profit after tax for the latest quarter. Technical indicators showed the stock trading above all major moving averages, signalling strong momentum. Institutional investors held a significant 36.73% stake, reflecting confidence in HPCL’s operational strength and valuation.

Jan 6: Early Week Sell-Off Amid Market Weakness

Following the peak on 5 January, HPCL’s shares declined sharply by 2.26% on 6 January, closing at Rs.481.30. This drop coincided with a broader market downturn, as the Sensex fell 0.19%. The stock’s volume also decreased, indicating reduced buying interest. The decline suggested profit-taking after the recent highs, with the stock beginning a losing streak that would extend through the week. Despite this, HPCL remained above its longer-term moving averages, maintaining some technical support.

Jan 7: Continued Decline with Lower Volumes

On 7 January, HPCL’s share price fell further by 1.03% to Rs.476.35, despite a marginal 0.03% rise in the Sensex. The stock’s volume dropped significantly to 71,509 shares, indicating cautious trading. Technical momentum began to shift as the stock traded below its 5-day, 20-day, and 50-day moving averages, signalling short-term weakness. This day marked the start of a downgrade in the stock’s rating by MarketsMOJO, reflecting mixed technical signals despite strong fundamentals.

Jan 8: Intraday Low and Downgrade to 'Buy'

HPCL experienced its steepest decline on 8 January, dropping 5.17% to close at Rs.451.70, with an intraday low of Rs.452.40. This 5.03% intraday fall was sharper than the Oil Exploration and Refineries sector’s 2.53% decline and the Sensex’s 1.41% drop. The stock’s technical momentum shifted from bullish to mildly bullish, with weekly MACD turning mildly bearish and On-Balance Volume indicating selling pressure. MarketsMOJO downgraded HPCL’s rating from 'Strong Buy' to 'Buy' on 7 January, citing mixed technical signals despite very attractive valuation metrics and strong profit growth. The company’s price-to-earnings ratio stood at 7.28, with a dividend yield of 3.25%, underscoring its value appeal amid the sell-off.

Jan 9: Week Closes with Mild Losses Amid Continued Pressure

The week concluded on 9 January with HPCL’s shares slipping a further 0.52% to Rs.449.35. The Sensex also declined by 0.89%, closing at 36,807.62. The stock’s volume was moderate at 94,726 shares, reflecting ongoing investor caution. Despite the recent losses, HPCL’s longer-term fundamentals remain robust, with a return on capital employed of 17.1% and profit growth exceeding 50% in the latest quarter. However, the technical outlook remains subdued, with the stock trading below key short-term moving averages and mixed momentum indicators suggesting consolidation.

Key Takeaways

Positive Signals: HPCL’s strong financial performance remains a cornerstone, with profit growth exceeding 50% in the latest quarter and a robust ROCE of 17.1%. The stock trades at attractive valuation multiples, including a low PE ratio of 7.28 and a dividend yield above 3%, appealing to value and income investors. Institutional ownership at 36.73% signals continued confidence from sophisticated market participants.

Cautionary Signals: The week’s sharp 9.36% decline highlights near-term selling pressure and technical weakness. The downgrade from 'Strong Buy' to 'Buy' reflects mixed momentum indicators, including mildly bearish MACD and On-Balance Volume trends. The stock’s failure to sustain above short-term moving averages and the sector’s underperformance suggest caution amid broader market volatility.

Conclusion

Hindustan Petroleum Corporation Ltd. experienced a volatile week marked by a peak at Rs.508.45 followed by a sustained correction that saw the stock close at Rs.449.35, down 9.36%. While the company’s underlying financial strength and valuation remain compelling, the shift in technical momentum and sectoral headwinds have introduced short-term challenges. Investors should weigh the robust fundamentals against the current technical caution, recognising that the stock is in a consolidation phase after a strong multi-year rally. Monitoring price action around key support levels and broader market trends will be essential in assessing HPCL’s next directional move.

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