HSBC has reaffirmed its ‘Buy’ ratings on Bharat Petroleum Corporation Limited (BPCL), Hindustan Petroleum Corporation Limited (HPCL), and Indian Oil Corporation (IOC), citing their attractive valuations following a recent correction in stock prices. The brokerage believes that oil price volatility is likely to reduce the risk of auto fuel pump price cuts, which have historically posed a significant challenge to profitability in the sector.
One of the key factors supporting HSBC’s positive outlook on the oil marketing sector is the recovery in auto fuel demand, which is expected to contribute to overall revenue growth. Additionally, improved margins in non-regulated petroleum products are anticipated to help offset the recent softness observed in marketing margins, providing stability to earnings for OMCs.
HSBC continues to see value in oil marketing companies, emphasizing that the recent decline in stock prices presents a compelling investment opportunity for investors. The brokerage maintains its ‘Buy’ stance on the following stocks, along with their respective target prices:
- BPCL: ₹440
- HPCL: ₹450
- IOC: ₹170
According to HSBC, the correction in OMC stocks makes them even more attractive, as the companies are well-positioned to benefit from demand revival and margin expansion. The brokerage expects stable oil prices and controlled fuel price movements to support better earnings visibility in the coming quarters.
Disclaimer: The above stock update is based on brokerage reports and company announcements. Investors are advised to conduct their own research and consult with a financial advisor before making any investment decisions.
