OMC Stocks

Despite the near-term volatility, HPCL's valuations remain reasonable, the brokerage noted. The stock trades at 1.4x one-year forward price-to-book, slightly above its long-term average of 1.2x.

Chennai Petroleum posted PAT of ₹732 crore in Q2FY26 against a loss of ₹629 crore in Q2FY25, on account of higher GRM at USD 9.1/bbl

Analysts believe that OMCs now have a large margin of safety owing to low oil price and a large capex plan which gives them confidence that a normative level of earnings will still be maintained.

Nomura said that the INR's depreciation remains a headwind for OMCs and CGDs, as their input costs are dollar-linked while revenues are in rupees.

So far this calendar year, the BSE oil and gas index has delivered gains of nearly 8 per cent.

BPCL, HPCL, IOC, Asian Paints, and other downstream oil companies' stock surged, while ONGC, Oil India dropped after Brent crude oil slipped 5 per cent

The Indian government has increased the price of a 14.2 kg LPG cylinder by ₹50. Simultaneously, the government has raised the excise duty on petrol and diesel by ₹2 per litre, a move impacting OMCs.

The FY26 budget has allocated Rs 12,100 crore for LPG subsidiary, far lower than the anticipated value

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Analysts say the already weakening marketing margins will be a concern ahead as the fate of OMCs remains tied to uncertain crude prices and the inability to raise prices amid the coming elections

OMC stocks are displaying bearish sentiment, if fails to hold key supports then could enter medium-term selling bias.

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OMCs, however, are concerned that equity infusion might impact their share price, market valuation and market perception

Analysts said Street is worried that sustained oil price hike could put pressure on OMC margins as govt may not pass the entire burden on to customers

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BPCL, HPCL and IOC may rise up to 11 per cent in coming sessions, and if they manage to sustain their upward rally, medium-term bias may strongly shift in bull's favour.

After two tight quarters of profit-margin shrinkage due to global volatility, Indian OMCs are expected to see reduction in operational losses in the October-December quarter (Q3FY23).

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Analysts believe that OMCs would see further decline in GRMs in Q2FY23, as cracks correct on a sequential basis and lower oil prices would drive sizable inventory losses