BPCL, HPCL, IOC shares gain up to 4% amid oil price fall, Nayara petrol, diesel rate cuts

Shares of oil marketing companies (OMCs) namely Indian Oil Corporation Ltd (IOC), Hindustan Petroleum Corporation Ltd (HPCL), and Bharat Petroleum Corporation (BPCL) Ltd jumped up to 4 per cent in Thursday's trade, thanks to a fall in crude oil prices for the third straight day. The stock rose even as Nayara Energy, India's largest private fuel retailer, cut petrol prices by Rs 5 per litre and diesel prices by Rs 3 per litre across its nationwide network.

HPCL gained the most, rising 3.58 per cent to Rs 392.20 apiece. BPCL rose 3.33 per cent to hit a high of Rs 314.35 on BSE. IOC added 2.75 per cent to Rs 143.75.

"Crude settling into a narrower range, potentially reducing absolute product prices while still keeping product spreads higher than pre-war levels, implies stickiness of retail margins at recent elevated levels of Rs 8–10 per litre, barring any fresh regulatory action with respect to excise duties and/or pricing action the OMCs," ICICI Securities said on Wednesday.

The domestic brokerage believes that the earnings profile for OMCs could change materially over the next 12 months. The brokerage suggested a higher FY27 EPS and a upgrade in HPCL’s rating to 'Buy', while it reiterate 'Buy' on IOC and BPCL. ICICI Securities still factored in a weak H1FY27E for the OMCs, with high retail losses and now the potential inventory losses due to the sharp downward movement in oil and product prices, impacting earnings.

"However, with assumptions now corrected for the rest of FY27E and more optimistic assumptions for FY28E, EPS for IOCL/BPCL/HPCL sees material upsides," it said.

ICICI Securities said note that uncertainties remain on what shape, if any, the final ‘peace’ agreement
takes, which may once again drive prices into the volatile territory. But, as of now, we believe that signals on pricing and margins point to a bullish territory for the OMCs.