HSBC has maintained its ‘Buy’ calls on Indian oil marketing companies (OMCs) — Hindustan Petroleum Corporation Ltd (HPCL), Bharat Petroleum Corporation Ltd (BPCL), and Indian Oil Corporation (IOC) — assigning target prices of ₹480, ₹420, and ₹180 respectively. The brokerage believes multiple tailwinds are aligning for the sector.
Citing recent news reports, HSBC highlighted that OMCs may receive compensation or subsidies for their LPG business, a move that would reduce financial pressure and support profitability. Meanwhile, signals from OPEC regarding future production cuts have created expectations of softer global crude oil prices, further supporting margin expansion in the near term.
“Marketing margins are currently strong, and fuel volumes have seen an upward trend, driving robust earnings growth for OMCs,” HSBC said in its note. The brokerage emphasized that the combination of improved refining margins, retail fuel profitability, and the possibility of government support on LPG can lead to earnings surprises in the coming quarters.
The sector had been under pressure earlier due to oil price volatility and policy-related uncertainties, but analysts now see scope for a re-rating if the macro environment continues to turn favorable.
