Morgan Stanley has expressed a positive outlook on India’s oil marketing companies (OMCs), citing stable fuel prices, rising crude discounts, and improving domestic demand as key factors supporting their margins. The brokerage emphasized that India’s fuel prices are benchmarked to $75 per barrel Brent, providing a stable pricing environment for OMCs.
Morgan Stanley highlighted that integrated margins for OMCs have improved due to steady fuel prices. With crude discounts widening and domestic fuel demand increasing, the brokerage believes that OMCs are well-positioned to sustain margin growth. This trend is expected to alleviate concerns around potential fuel price cuts.
The report noted that HPCL and BPCL are preferred picks among OMCs, given their stronger positioning to capitalize on these favorable conditions. The supportive market dynamics are expected to enhance profitability and operational performance, providing a positive outlook for the sector.
