Stock Market Today: Bharat Petroleum Corporation Ltd (BPCL), Hindustan Petroleum Corporation Ltd (HPCL), Indian Oil Corporation (IOC) remains in a sweet spot as declining crude prices coupled with expected improvement in refining outlook bode well for their earnings.
The same is being reflected in HPCL, BPCL, IOC share prices that have risen 1-4.5% during last one month outperforming the benchmark Nifty-50 index that has corrected 2.75% during the period.
Softer Brent prices
The Brent Crude price that had risen during calendar year 2025 to highs of $81-82 a barrel by Mid January, however has been seeing corrections of late. The Brent Crude has now slipped to sub $70 a barrel levels.
The softer Crude prices bode well for marketing margins outlook of Oil Marketing companies and thereby supporting BPCL, HPCL, IOC share prices. Marketing Margins are the profit margin that oil marketing companies (OMCs) as BPCL, HPCL and IOC make is basically the difference between the selling price of refined fuels (such as gasoline/ or petrol and diesel) and the cost of raw materials (crude oil) plus the refining expenses.
Since Oil Marketing Companies (OMCs) as HPCL, BPCL, IOC are dependent on imports for majority of their crude oil supplies, the lower crude oil prices also mean that they will see reduction in working capital requirements.
Analyst Views
Sustained weakness in crude is likely to help maintain healthy marketing margins, more than making up for any refining weakness in the near term, said analysts at Antique Stock Broking in their post Q3 Results review. The post budget sharp correction had left Oil Marketing Companies valuations very attractive they added. Their revised Target prices for HPCL, BPCL, and IOC stand at ₹555, ₹420, and ₹170 per share respectively
Expected improvement in Refining Margins
For FY26 OMCs should see earnings resilience, said analysts at Antique Stock Broking as they expect crude to be around $ 75 a barrel , auto-fuel margins to stay above ₹4.6 a litre , and Singapore complex GRM (gross Refining margins) to recover above $5 per barrel
Disclaimer: The views and recommendations given in this article are those of individual analysts. These do not represent the views of Mint. We advise investors to check with certified experts before making any investment decisions.
