Yes Securities has maintained ‘Buy’ ratings on leading oil marketing companies (OMCs)—HPCL (target price ₹475), BPCL (₹370), and IOCL (₹154)—despite concerns over LPG subsidy burdens. The brokerage anticipates higher profitability in H2 FY25 to offset the impact of subsidies.
The subsidy impact is projected to reach ₹40,000 crore by FY25, but robust gross refining margins (GRMs) and strong marketing performance are expected to help mitigate these challenges. Yes Securities also notes that if the government provides even 60% of the shortfall, H2 FY25 EBITDA could surpass consensus estimates.
In the absence of substantial government support, OMCs remain well-positioned to leverage their operational efficiencies for stable performance.
