UBS has taken a constructive view on India’s oil marketing companies, noting that strength in middle distillate spreads continues to support refining profitability even as the Singapore benchmark fails to capture real margins for diesel-heavy refiners. The brokerage said India’s diversified crude sourcing provides a natural cushion against geopolitical disruptions and enhances stability across OMC earnings.
The brokerage maintained buy ratings on all three OMCs, placing IOC as its preferred pick with a target price of ₹190, followed by BPCL at ₹425 and HPCL at ₹540. UBS believes IOC and BPCL offer the strongest risk-reward profiles owing to their refining configurations and crude diversification strategy. While HPCL remains a buy, the brokerage indicated that IOC and BPCL stand better positioned in the current margin cycle.
UBS added that favourable diesel spreads, stable demand and the ability of refiners to navigate supply-side disruptions should continue to underpin core earnings, making OMCs an attractive play in the near-to-medium term.
Disclaimer: The views above are those of UBS. Business Upturn does not endorse them. Please consult a financial advisor before making investment decisions.
