"The increase in profit is due to higher domestic market sales and reduced inventory loss compared to the corresponding period last year. Inventory loss came down to Rs 359 crore this quarter compared to Rs 1,406 crore during the second quarter of the previous fiscal," said M K Surana, chairman and managing director of HPCL.

For the quarter under review, the company has registered 3.1 per cent increase in gross sales to Rs 47,750.60 crore compared to Rs 46,299.45 crore during the same period last year. Meanwhile, the combined gross refining margin (GRM) during the period July-September was $3.23 per barrel as compared to $2.74 per barrel during the corresponding previous period, primarily due to increase in cracks.

During July-September 2016, the domestic sales of petroleum products have increased to 8.02 million tonnes from 7.78 MT, registering a growth of 3.1 per cent over the corresponding quarter of the previous year. The sales of petrol has increased by 9.3 per cent, diesel by 1.1 per cent, LPG by 14.6 per cent, aviation turbine fuel by 11.3 per cent and lubes by 16.6 per cent over the corresponding period of the previous financial year.

HPCL is planning to raise Rs 6,000 crore through a bonds issue to finance their expansion plans. The company's board today cleared the proposal to raise this amount from domestic as well as overseas markets within a period of 12 months.

Surana said that this will be subjected to shareholder approval, which will be done through poastal route. "We have our expansion plans in Vizag and Mumbai refineries. This will also be used for development of our marketing and pipeline infrastructure," he added.

The board also approved HPCL's plan to have 25 per cent shareholding in the West Coast refinery. While Indian Oil Corporation is set to get 50 per cent stake in the Rs 1,50,000 crore refinery, Bharat Petroleum Corporation Ltd and Engineers India Ltd (EIL) are other two partners.

"We are finalising a lot of issues, including land for the project," he said.

Meanwhile, the company has said that due to the demonitisation of Rs 500 and Rs 1,000 denomination notes, the sales of petroleum products have increased by 30 per cent in the last few days.