2 weeks Ago
Stock Market today: Bharat Petroleum Corporation (BPCL), Hindustan Petroleum Corporation Ltd (HPCL) and Indian Oil Corporation Ltd (IOCL) saw their share prices rise up to ₹ 3.7% during the Intraday trades on Monday. The analysts reports indicate that Brent crude prices will remain below $70 a barrel and hence the same will be supportive for the Oil Marketing Companies as BPCL, HPCL, IOCL Benefits for Oil Marketing companies The Oil marketing companies as BPCL, HPCL, IOCL import crude oil from various sources and refine the Crude oil to get various petroleum products as Diesel, Petrol among others.
The Oil Marketing companies sell auto fuels and earn margins termed as marketing margins. The outlook for marketing margins remains strong as crude prices remain weak. Further the outlook for Crude prices is also seen as weak , which is positive for earnings outlook of Oil Marketing Companies as BPCL, HPCL, IOCL Analysts a Antique Stock Broking say that the sharp correction in crude to $ 64 a barrel versus Q4 average of 75/bbl) has boosted auto-fuel margin to ₹ 12 per Liter.
Despite the excise hike (effective 8th April, which now elads marketing margins moderating to ₹ 10 per Liter, analysts say this is still ₹ 5 a liter higher than our FY26 estimate of ₹ 4.8/liter. Outlook for Crude prices Analysts at JM Financial institutional Securities Ltd say that the sustained low crude price could boost OMCs' auto-fuel marketing margin though they are cautious on expectations that government is likely to mostly hike excise duty and/or cut price of petrol/diesel if crude price sustains at low levels Meanwhile on the factors putting pressure on Crude prices is the fact that Global oil inventory has risen 22mmbbl Month on Month in February’25 and likely to have risen in March’25 as well as JMFL data.
The global oil supply rose by 590kbpd MoM in March’25 despite 150kbpd decline in OPEC+ output:. OPEC+ actual output hike is likely to be lower than announced due to likely output cuts by Kazakhstan, Iraq and others as they compensate for past over-production Sustained crude weakness should support more than healthy marketing margins, more than offsetting near-term refining softness and LPG losses (which is expected to reduce sharply in the coming months!) going down to zero, analysts at Antique Stock Broking has said. With strong auto-fuel margins, GRM recovery and removal of LPG loss burden overhang OMCs are in a sweet spot, said Antique Stock Broking Disclaimer: This story is for educational purposes only.
The views and recommendations above are those of individual analysts or broking companies, not Mint. We advise investors to check with certified experts before making any investment decisions, as market conditions can change rapidly, and circumstances may vary..
