BPCL, HPCL, Indian Oil shares get a good call from analysts despite falling prices of crude oil. Here's why | Einsmark news

Indian Oil Corporation (IOC), Hindustan Petroleum Corporation Ltd (HPCL) and Bharat Petroleum Corporation Ltd (BPCL) Shares – The State -Opening Oil Marketing Enterprises (OMC) – has received a good view of analysts, despite the recent sharp drop in rough prices. Worldwide growth analyzes. Long, as the government is likely to rise the excise of gasoline and diesel prices. Furthermore, they believe that the risk reward is not favorable, given the overhang of LPG under values, the risks to the sustainability of the Russian crude discount and their aggressive Capeex plans. Domestic brokerage firm JM Financial said in its latest report that sustained lower crude prices could increase OMCS’s marketing margins. At the place of the $ 66 a barrel price, OMCS’s car marketing margin jumped to £ 11 a liter, compared to the historic £ 3.5 per liter (or £ 5.1 per liter, adjusted for LPG losses). However, the broker believes that it is unlikely to be sustained at these high levels in medium to long term, as historical precedent indicates that the government is likely to rise the excise tax on gasoline/diesel and/or petrol/diesel prices remain low. Furthermore, JM Financial noted that the high marketing margins of OMCS are likely to be partly counteracted by possible disadvantage risks for GRMS if the tariff war leads to a reduced global oil demand. Referring to CMIE data, the broker said the discount on Russian Ru to India in January 2025 more than Monday to USD 1.1/BBL moderated, from USD 2.6/BBL in December 2024-Lower than the USD 6-10/BBL discount in 1HCY23. However, Russia’s part of India’s rough imports strengthened Mom in January 2025 to 36.4%, from 32% in December 2024 (compared to 20% in December 2022 and just 1-2% pre-Ukraine invasion). During IOCL’s 3QFY25 merger, management shared that the Russian crude discount on USD 1-1.5/bbl in 4QFY25TD (Van ~ USD 3/BBL in 9MFY25). Furthermore, all three management of the OMCs said that the Russian crude ratio began to moderate to 25-30% (from 30-35% earlier), and there is a possibility of a further decrease in the Russian crude offer due to US sanctions. However, they added that it was premature to say whether US sanctions would lead to a full end of Russian rough imports for Indian refineries. Valuations extend beyond historical averages for HPCL and BPCL. The broker has a ‘sale’ rating on HPCL share price with a target price of £ 320 per share and at IOCL share price with a target price of £ 125, while a ‘hold’ rating on BPCL share price is maintained with a target price of £ 295. will normalize, as the government can maintain the benefit of any sustained drop in crude prices through actions and/or fuel price cuts to give the benefit to the end consumers. Furthermore, the broker said: “OMCS’s aggressive Capeex plans emphasize our most important structural concern, as many of these projects do not create long-term value for shareholders. Against current market prices: a) HPCL traded at 1.3x FY27 p/b (versus its historical average of 1.0x); of 1.4x); Stay ugly for Oil India and Ongc The broker holds a buying rating on Oil India (unchanged target price of £ 500) and Ongc (unchanged target price of £ 290), based on the Brent price adoption of USD 70/BBL (while the current market price reduces the USD 55/BBL of Net Ru- realization). The bullish attitude is also supported by a production prospect of ~ 12%/25% over the next 1-3 years. According to the broker, Oil India’s earnings growth is likely to be helped by expanding the NRL refinery from 3 mmtpa to 9 mmtpa by December 2025, supported by management’s guidance that benefits for excise rights will also continue for extensive capacity. “However, the earnings of Ongc/Oil India will be negatively affected as Brent -RU prices under USD 70/BBL Disclaimer: The views and recommendations given in this article are those of individual analysts. This does not represent the views of coin. We advise investors to check with certified experts before making investment decisions. First published: 22 Apr 2025, 09:31 AM IST