Hindustan Petroleum Gains 6.01%: 5 Key Factors Driving the Rally to All-Time High

29 December 2025: Renewed Market Optimism Evident in Derivatives Activity

HPCL began the week on a positive note with a 1.43% gain to close at Rs.474.35, despite the Sensex declining 0.41%. This price rise was accompanied by a notable 14.04% surge in open interest in the derivatives segment, increasing from 28,698 to 32,726 contracts. The futures and options turnover combined to ₹96,206.31 lakhs, highlighting strong liquidity and active participation.

The stock’s price action was supported by its position above all key moving averages, signalling technical strength. However, a sharp 69.06% drop in delivery volumes suggested that speculative trading rather than long-term investor accumulation was driving the rally. The stock traded just 4.78% below its 52-week high, indicating proximity to key resistance levels.

30 December 2025: Valuation Metrics Signal Attractive Investment Opportunity

On 30 December, HPCL’s stock price retreated 1.26% to Rs.468.35 amid a flat Sensex. Despite the dip, valuation parameters improved, with the price-to-earnings ratio at a modest 7.27 and enterprise value to EBITDA at 6.12, both below industry averages. Return on capital employed (ROCE) stood at a robust 17.12%, and return on equity (ROE) was an impressive 24.49%, underscoring operational efficiency.

The stock’s dividend yield remained attractive at 3.26%, and the PEG ratio of 0.03 indicated undervaluation relative to earnings growth. HPCL’s consistent outperformance over multiple time frames, including a 16.32% year-to-date return versus the Sensex’s 8.39%, reinforced its appeal despite the slight valuation upgrade from very attractive to attractive.

31 December 2025: Multiple New Highs and Upgraded Rating Boost Momentum

HPCL’s stock surged 6.54% to Rs.499.00, hitting a new 52-week high of Rs.495.4 intraday and an all-time high close near Rs.494.55. The intraday high reached Rs.491.70, marking a 5.28% surge and outpacing the Oil Exploration and Refineries sector’s 2.02% gain and the Sensex’s 0.48% rise.

Open interest in derivatives jumped 20.86% to 26,372 contracts, with futures and options turnover exceeding ₹59,346.56 lakhs, signalling strong bullish positioning. Delivery volumes rose sharply by 212.24%, indicating increased investor conviction. The stock traded above all major moving averages, confirming sustained technical strength.

MarketsMOJO upgraded HPCL’s Mojo Grade from Buy to Strong Buy, reflecting improved valuation metrics including a PE ratio of 7.15 and EV/EBITDA of 6.06. The company’s robust financial performance, with quarterly profit before tax excluding other income up 57.9% and PAT up 51.2%, supported this upgrade. Institutional ownership remained high at 36.73%, underscoring confidence from large investors.

1 January 2026: New 52-Week and All-Time High at Rs.500.35

HPCL continued its upward trajectory on the first trading day of 2026, reaching a new 52-week and all-time high of Rs.500.35. The stock closed at Rs.498.65, marginally down 0.07%, while the Sensex gained 0.14%. Over the two-day period ending 1 January, HPCL gained 6.65%, demonstrating strong momentum.

The company’s strong fundamentals underpinned this performance, with net sales growing at 13.76% annually and operating profit expanding by 26.26%. The return on capital employed remained healthy at 17.1%, and the dividend yield stood at 3.11%. Institutional investors maintained a 36.73% stake, reflecting sustained confidence.

HPCL’s consistent outperformance over one, three, five, and ten years, with returns exceeding 20% annually and far surpassing the Sensex, highlights its long-term value creation. The Mojo Score of 81.0 and Strong Buy rating further reinforce the stock’s quality and growth prospects.

Daily Price Performance vs Sensex

Key Takeaways

Positive Signals: HPCL’s 6.01% weekly gain significantly outpaced the Sensex’s 1.35%, driven by strong derivatives market activity, multiple new highs, and a recent upgrade to a Strong Buy rating. Robust financial metrics including a PE ratio near 7.15, ROCE above 17%, and a dividend yield exceeding 3% underpin the stock’s appeal. Institutional ownership at 36.73% adds stability and confidence.

Cautionary Notes: Early in the week, delivery volumes declined sharply despite rising open interest, suggesting speculative trading. Although this reversed later with strong delivery volume increases, investors should monitor volume trends to confirm sustained accumulation. The slight valuation upgrade from very attractive to attractive indicates some premium has been priced in, warranting careful entry timing.

Conclusion

Hindustan Petroleum Corporation Ltd. demonstrated a compelling combination of strong price appreciation, robust fundamentals, and positive market sentiment during the week ending 2 January 2026. The stock’s ability to hit new 52-week and all-time highs, supported by significant open interest surges and institutional backing, highlights its leadership within the oil sector. The recent upgrade to a Strong Buy rating by MarketsMOJO further validates its quality and growth prospects.

While short-term speculative activity was evident early in the week, the subsequent rise in delivery volumes and sustained technical strength suggest a solid foundation for continued momentum. Investors should remain attentive to valuation trends and volume patterns to gauge the durability of this rally. Overall, HPCL stands out as a mid-cap stock with a strong blend of growth, income, and market positioning in the current environment.

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