Indian OMCs remain structurally challenged by high crude prices, Ambit Capital says

Hindustan Petroleum

03/09/2026 06:36

** Indian oil marketing companies remain structurally challenged in an environment of elevated crude oil prices, brokerage Ambit Capital says
** Says, even with incremental price action, OMCs face sustained marketing under-recoveries and compressed integrated margins
** This is driven by elevated landed crude, spot-buying premiums, and surging freight and insurance costs, they add
** Brent crude prices settled 1% higher ​on Wednesday, driven by renewed military strikes between the U.S. and Iran
** On the day, Indian Oil IOC.NS down 0.2%, Hindustan Petroleum HPCL.NS down 0.1% and Bharat Petroleum BPCL.NS down 0.4%
** "Consensus expects sharp earnings recovery in Q2FY27, disregarding macro headwinds. We believe this optimism is misplaced" - brokerage 
** Says, even if the war were to end, restocking demand would keep oil prices high in FY27/28
** "We maintain an all SELL stance on OMCs, with HPCL as our top SELL given its vulnerable refining cover" - Ambit
** YTD, Indian Oil IOC.NS down 17.8%, Hindustan Petroleum HPCL.NS down 28.1% and Bharat Petroleum BPCL.NS down 17.1%

 (Reporting by Abhinav Parmar in Bengaluru)
 ((Abhinav.Parmar@thomsonreuters.com;))