IOCL, BPCL, HPCL hit 52-week highs; What's driving OMCs to outperform?

In the past one week, the BSE Oil & Gas index up 3.4 per cent, as compared to 0.91 per cent decline in the BSE Sensex.

Share price movement of OMCs today

 

Shares of oil marketing companies (OMCs) were in demand, with all three listed state-owned OMCs trading at their respective 52-week highs. The OMCs are in focus following improved Gross Refining Margins (GRMs) and subdued crude oil prices which will support profitability and marketing margins, according to analysts.

 

Bharat Petroleum Corporation (BPCL) (up 3 per cent at ₹369.40), Hindustan Petroleum Corporation (HPCL) (up 2 per cent at ₹487.15) and Indian Oil Corporation (IOCL) (up 2 per cent at ₹168.65) have hit their respective 52-week highs on the BSE in intra-day trade.

 

In the past one week, OMCs have outperformed the market by rallying between 6 per cent and 8 per cent. During the period, the BSE Oil & Gas index gained 3.4 per cent, as compared to 0.91 per cent decline in the BSE Sensex.

 

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Meanwhile, HPCL is quoting at its record high level on the BSE. BPCL and IOCL are quoting close to their respective all-time high levels. BPCL had hit a record high of ₹376 on September 30, 2024 and IOCL touched record high of ₹196.80 on February 8, 2024.

What’s driving OMCs to outperform the market?

 

The July to September quarter (Q2FY26) results for the Oil & Gas sector so far indicate a strong performance, primarily driven by OMCs. All three OMCs delivered a significant beat on Ebitda estimates, driven by a 44-66 per cent beat on GRM estimates and strong marketing margins, Motilal Oswal Financial Services said.

 

On August 8, 2025, the Union Cabinet approved compensation of ₹30,000 crore to three public sector OMCs for under-recoveries incurred on the sale of domestic liquefied petroleum gas (LPG). The Ministry of Petroleum and Natural Gas (MoP&NG) has approved a compensation of ₹14,500 crore/₹7,600 crore/₹7,900 crore to IOCL/BPCL/HPCL for LPG under-recoveries. The amount will be released in 12 equal monthly instalments, with accruals recognised monthly starting in November 2025.

 

Accordingly, revenue to the extent of equivalent on a monthly basis will be recognised in the relevant periods. The strategic initiative of Project Sprint has started showing improvements with green shoots visible in operational and financial performances, IOCL said in its Q2 result update.

 

Meanwhile, technically, the BSE Oil & Gas index has strongly rebounded from its previous multi-year breakout zone, indicating resumption of primary uptrend. Within this space, IOCL looks lucrative as it has broken out from its 20-month falling trendline, indicating a structural turnaround and offering further upside potential, analysts at ICICI Securities said.

 

Structurally, the stock has been maintaining its uptrend while forming a higher base in the vicinity of the rising trendline support that coincided with the 20-week EMA, held since March 2025, indicating sustained buying demand and a strengthening support base. Going ahead, the brokerage firm expects the stock to gradually rise and eventually head towards ₹179, being an 80 per cent retracement of the decline from (196-111).

 

Meanwhile, YES Securities maintains a 'BUY' rating on BPCL with a revised target price of ₹415 by assigning a multiple of 1.4x P/BV (₹351) on core business and adding investments (₹64).

 

BPCL is poised for a stronger FY26, driven by recovering refining margins, high marketing spreads, and easing of LPG subsidy pressure. While LPG under-recoveries remain a headwind (₹28,000 crore burden for OMCs), BPCL’s 25 per cent share is expected to be partly offset by robust marketing margins. Refining profitability is supported by higher gasoil cracks and improved crude sourcing flexibility, with Russian discounts (down to ~USD1.5/bbl) aiding costs. Near-term focus will remain on cash flows, subsidy absorption, and throughput stability, the brokerage firm said.