NEW DELHI, November 27: Hindustan Petroleum Corporation Ltd (HPCL) has recorded a 15 per cent rise in net profit to Rs 347.05 crore for the six months ended September 30, 1997, compared with Rs 301.15 crore for the same period last year.

Its gross profit was up 10 per cent to Rs 700.35 crore from Rs 636.10 crore. Despite a 26 per cent rise in interest outgo on borrowings (mostly for working capital requirements), a 22 per cent increase in depreciation charges for the company's numerous capital projects, Hindustan Petroleum managed to post a higher increase in net profit, partly because of the eight per cent drop in corporate taxes this year.

The slashing of corporate taxes to 35 per cent from 43 per cent last year, enabled HPCL to make a 10.59 per cent lower provision for taxes in the first half of this fiscal. Taxes accounted for Rs 155.92 crore of Hindustan Petroleum Corporation's gains this year, compared to Rs 174.4 crore in the first six months of last year.

Depreciation depressed HPCL's profits by Rs 197.38 crore, compared with Rs 160.55 crore in the first half of the 1996-97 fiscal. Interest outgo on borrowings ate up Rs 47.53 crore of the company's profits between April and September this year, compared to Rs 37.52 crore during the same period last year.

While the hiatus between HPCL's gross and net profit can be explained away by the lowered corporate taxes, the overall profitability of the company got a shot from the 18 per cent increase in gross sales. The oil refining and marketing company sold petroleum products worth Rs 9653.19 crore during the first six months of this year, which was 18 per cent higher than its gross sales of Rs 8143.20 crore in the first six months of the 1996-97 fiscal.

After making oil pool account adjustments, Hindustan Petroleum Corporation's net sales watered down to Rs 7202.81 crore, which was a slightly smaller hike of 13.5 per cent over its net sales during the first half of last year.

Copyright © 1997 Indian Express Newspapers (Bombay) Ltd.