HSBC expects global oil and gas markets to tilt into surplus by 2026 — a structural shift that India has long awaited, and one it believes will materially improve the operating environment for domestic oil marketing companies. In its latest sector note, the brokerage said a sustained surplus would support higher utilisation of LNG import terminals and pipelines, boost domestic gas demand and lift profitability across major OMCs.
The brokerage has issued buy ratings on GAIL (TP: ₹235), HPCL (TP: ₹580), BPCL (TP: ₹480) and IOC (TP: ₹200), citing improved medium-term outlook and earnings visibility as the market rebalances. HSBC noted that a more stable global supply scenario typically benefits India disproportionately given its import dependence, and improved pipeline throughput should deepen gas adoption across industrial and city-gas segments.
However, it maintained a hold call on Petronet LNG with a target price of ₹320 per share, citing limited near-term catalysts. The brokerage also reiterated a reduce rating on ONGC with a target price of ₹200, suggesting that upstream profitability may remain under pressure as global supply expands and crude realisations soften.
Disclaimer: The views and recommendations above are those of HSBC. Business Upturn does not endorse them. Please consult a financial advisor before making investment decisions.
