BPCL, HPCL near record highs, zoom up to 57% from March low; here's why

Elara Capital maintain its positive view on OMCs amid subdued crude prices and expects the government to allow OMCs to earn above-historical integrated margin

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HPCL, BPCL share price: Shares of oil marketing companies (OMCs) Hindustan Petroleum Corporation Ltd. (HPCL) (₹452.4) and Bharat Petroleum Corporation Ltd. (BPCL) (₹357.55) were trading higher by up to 2 per cent on the BSE in Tuesday’s intra-day trade in an otherwise subdued market on expectations of strong earnings. 

 

The stock price of HPCL is trading close to its record high level of ₹457.20, touched on September 5, 2024. It bounced back 57 per cent from its 52-week low of ₹287.55, which it had hit on March 3, 2025.

 

Meanwhile, BPCL is quoting close to its all-time high of ₹376 touched on September 30, 2024. The stock has recovered 53 per cent from its March low of ₹234.15 on the BSE.    Track LIVE Stock Market Updates Here

OMCs expected to report a strong Q1 result

Oil marketing companies (OMCs) are expected to report strong earnings for the June 2025 quarter (Q1FY26), benefiting from lower crude prices. Oil prices declined 12 per cent quarter-on-quarter (Q-o-Q) and 18 per cent year-on-year (Y-o-Y), while retail fuel prices remained largely unchanged.

 

The impact of the ₹2 per litre hike in excise duty is partly offset by the domestic LPG price increase. Also, as oil prices moved up in June, analysts at Kotak Institutional Equities do not expect much adventitious inventory impact for BPCL and HPCL. 

 

The brokerage expects strong Ebitda growth for oil marketing companies in Q1FY26: BPCL up 53 per cent Q-o-Q and 2.1 times Y-o-Y, HPCL up 49 per cent Q-o-Q and 4.1 times Y-o-Y on a low base, and IOC up 31 per cent Q-o-Q and 2.1 times Y-o-Y.

 

BPCL and HPCL's Ebitda for Q1FY26 may rise 52-69 per cent Q-o-Q, driven by a sharp increase in auto fuel marketing margins, while IOCL's Ebitda is expected to grow 24 per cent Q-o-Q due to higher inventory losses, according to JM Financial Institutional Securities. However, the brokerage firm maintains its cautious view on OMCs as it believes OMCs’ risk-reward is not favourable given their aggressive capex plans and high valuation. 

 

However, Elara Capital maintains its positive view on OMCs amid subdued crude prices and expects the government to allow OMCs to earn above-historical integrated margins to fund their energy transition capex. As per brokerage estimates, BPCL would have to earn at least ₹3,250 per tonne integrated margin to fund its aggressive capex and double its profit in the next five years.

 

Meanwhile, HPCL expects favourable crude oil prices this calendar year, which could support margin growth. Retail network expansion and improved throughput at outlets are expected to drive further momentum. HPCL has also strengthened its marketing activities to increase market share, which is expected to support long-term growth, according to Geojit Financial Services.