HPCL's structured cost programme delivered ₹1,691 crore in FY26, exceeding its $0.50/bbl target. CFO K Vinod explains the permanent savings and margin focus.
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HPCL's Project Samriddhi delivered $0.54 per barrel in EBITDA improvement across its marketing volume in FY26, or ₹1,691 crore. The programme, launched in May 2025, targeted $0.50/bbl. CFO K Vinod told businessline that total accruals reached ₹1,691 crore, with a meaningful part permanent and now built into the corporation's cost base.
The savings split into ₹744 crore in recurring benefits and ₹947 crore in one-time gains. In refinery operations, the programme cut costs by ₹428 per tonne of crude throughput on 26.04 mt processed, equivalent to $0.66/bbl. In marketing, savings of ₹119 per tonne on 48.53 mt sold translated to $0.18/bbl.
Margin improvement contributed ₹1,403 crore of the total; cost-take-out initiatives added ₹288 crore. The margin gains came from a combination of crude value maximisation, refinery efficiency improvements, supply and logistics optimisation, and strategic commercial interventions, Vinod said.
Vinod described three pillars for the programme. Margin improvement and cost reduction are two; the third is structural process transformation. He emphasised that disciplined execution on a carefully prioritised set of high-impact initiatives yields far more value than spreading effort thinly across many smaller actions. The largest pool of value, he added, lies in margin-related levers across refining, supply, and marketing, rather than in cost reduction alone.
Company-wide participation made a material difference, with virtually every strategic business unit contributing, Vinod said. In an industry where profitability is shaped by geopolitical developments, crude oil price fluctuations, refining spreads, and logistics costs, operational excellence has become a critical differentiator, he stressed.
The programme was launched in May 2025 to counter sustained cost and margin pressures in the refining and marketing business. Its FY26 target of $0.50/bbl, Vinod noted, was exceeded. The permanent savings are now embedded in HPCL's cost base, providing a buffer against external pressures.
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