Shares of leading oil marketing companies (OMCs) including Hindustan Petroleum Corporation (HPCL), Bharat Petroleum Corporation (BPCL), and Indian Oil Corporation (IOC) rose sharply in Tuesday’s trade amid improved auto-fuel margins and optimism surrounding upcoming quarterly results. HPCL gained 4% to Rs 367.50, BPCL climbed 3.23% to Rs 282.55, and IOC rose 1.80% to Rs 130.39 on the NSE.
At 1:07 PM, HPCL was trading at Rs 364.80, up 3.40%, with a market cap of Rs 77,453 crore. BPCL’s market value stood at Rs 6.11 lakh crore, and IOC was valued at Rs 1.84 lakh crore. All three stocks rebounded following recent underperformance in 2025, during which they declined 6–14% due to concerns around LPG under-recoveries.
Brokerage optimism has buoyed sentiment. Emkay Global and Antique Stock Broking see improved fuel marketing margins—now at Rs 12/litre—as a strong earnings tailwind. Brent crude prices have corrected to $64/bbl from the Q4 average of $75, significantly enhancing the outlook for over-recoveries in FY26.
Global brokerages are closely tracking three key focus areas for these firms, as outlined by Goldman Sachs: the timing and scale of LPG subsidy disbursements, realized crude discounts, and capital expenditure updates—especially on HPCL’s Vizag refinery and Barmer project.
CLSA noted that the recent Rs 2/litre excise duty hike is modest and should generate $4 billion annually in revenue without increasing retail prices. This, coupled with a Rs 50 LPG price hike, is expected to halve under-recoveries, providing near-term comfort to OMCs.
Citi highlighted that the government has tactfully used falling crude prices to indirectly support OMCs. It estimates the excise hike could offset Rs 413 billion in LPG-related FY25 losses, maintaining profitability without formal subsidy declarations.
With multiple brokerages maintaining a ‘Buy’ rating—Emkay setting targets of Rs 450 (HPCL), Rs 375 (BPCL), and Rs 160 (IOC)—investors remain optimistic about improved valuations and earnings strength in the quarters ahead.
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