Hindustan Petroleum capex plans prioritise investment

Hindustan Petroleum (HPCL) management raised its standalone capex guidance significantly to 534 billion over FY17-21 vs. 310 billion over FY16-20 earlier. Majority of the capex increase appears to be in the marketing segment which management attributed to new LPG bottling plants, lube blending plants and product pipelines. While some miss against planned timelines are likely, the new capex plans imply priority to reinvestment over balance sheet improvement. The management significantly raised its core capex guidance for the next five years. Total capex over FY17-21 was guided at 558 billion which includes 24 billion towards JVs, implying standalone capex of 534 billion.