Shares of Hindustan Petroleum Corp (HPCL) rose 1.3% to Rs 231.55 on Wednesday after the state-owned fuel retailer said it had signed a deal to produce, distribute and sell lubricants from global supermajor Chevron in India.

Chevron Brands International LLC (Chevron), a subsidiary of Chevron Corporation, has entered into a long-term trademark license agreement with HPCL.

“This collaboration includes the licensing, production, distribution and marketing of Chevron’s Caltex brand lubricant products, including Chevron’s proprietary Havoline and Delo brand lubricant products,” the companies said in a March 14 joint statement.”

HPCL already has its own brand of lubricants, which will be in addition to the existing brands.

Most brokerages have “buy” ratings on the stock due to rising fuel demand, strong refining margins and better-than-expected results from the marketing unit.

In February, preliminary industry data showed that India’s fuel demand rebounded the most as gasoline and diesel consumption rose by double digits after last month’s winter lull.

Gasoline sales in the first half of February rose nearly 18% to 1.22 million tonnes, compared with 1.04 million tonnes a year earlier.

Diesel is the most used fuel in the country, with sales up almost 25% to 3.33 million tonnes in the February 1-15 period compared with the same period last year.

The three state-owned oil marketing companies (OMCs), HPCL, BPCL and IOC, account for approximately 90% of the market.

Last month, HPCL posted a consolidated net profit of Rs 444.26 crore for the quarter that ended December 2022, down 67.16% from Rs 1,352.99 crore in the same period last year.

Product sales revenue was at Rs 1,15,829.87 crore, an increase of 12.3% from Rs 1,03,143.24 crore reported in the same period last year.

The average refining gross margin (GRM) for the April-December 2022 period is $11.40 per barrel (April-December 2021: $4.50 per barrel). This is before considering the impact of special additional excise duty and road and infrastructure tax imposed on exports of certain petroleum products from January 7, 2022.

Profitability was impacted during the period due to suppressed marketing margins for certain petroleum products, HPCL said.