Morgan Stanley said reduced Russian crude oil supply has had a limited impact on Indian refiners, with the overall earnings upcycle for the sector remaining intact as Brent crude prices continue to hover below $70 per barrel. The brokerage maintained a positive stance on the Indian energy space, stating that while retailers have been slightly affected by narrowing spreads, refining margins remain robust in a tightening global system.
According to the brokerage, the global refining landscape continues to face structural constraints, with limited incremental capacity additions and higher maintenance-related outages tightening supply. This backdrop supports stable or improved refining margins for Indian companies.
Morgan Stanley highlighted that the domestic downstream sector remains well-positioned to benefit from resilient demand, healthy product cracks, and steady utilisation levels. It identified Hindustan Petroleum Corporation Ltd. (HPCL) and Reliance Industries Ltd. as its top picks in the sector, citing strong refining and retail integration and robust earnings visibility.
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