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Informist, Wednesday, Oct. 21, 2026

 

By Anand JC

 

MUMBAI – Bharat Petroleum Corp. Ltd. is expected to return to profit in the September quarter after posting a loss in the preceding quarter. However, its profit is projected to decline year-on-year, as net profit almost tripled in the year-ago quarter, according to brokerage estimates.

 

Profits of oil marketing companies are expected to be under pressure year-on-year as oil prices remained elevated due to the war in West Asia in Jul-Sept. However, the companies are expected to report improved financials sequentially, supported by strong gross refining margins, inventory gains, lower liquefied petroleum gas under-recoveries, and some moderation in auto-fuel marketing losses, analysts said.

 

BPCL's net profit for the September quarter is expected to fall a little over 29% on year to INR 45.46 billion, according to the average of estimates from 12 brokerages. Projections for BPCL's net profit vary widely, with the highest estimate at INR 122.60 billion from 360 ONE Capital Market Pvt. Ltd. and the lowest at INR 6.30 billion by Prabhudas Lilladher Pvt. Ltd.

 

The company's top line for the quarter ended Sept. 30 is projected at INR 1.49 trillion, according to the average of estimates. The highest revenue estimate is INR 1.66 trillion from Nomura Equity Research and the lowest is INR 1.26 trillion from Motilal Oswal Financial Services Ltd.

 

BPCL is one of India's three state-run oil marketing companies. It is the country's second-largest oil marketing company and third-largest refiner. Its portfolio deals with fuels, lubricants, liquefied petroleum gas, natural gas, and other services. Its refineries in Mumbai, Kochi, and Bina have a refining capacity of 35.3 million tonnes per annum. They account for 14% of India's total installed capacity. Almost all of its consolidated revenue comes from the downstream petroleum business, with only a small fraction from the exploration and production business.

 

BPCL had reported a net loss of INR 39.62 billion on a revenue of INR 1.51 trillion for the June quarter. The oil marketing company's financials took a heavy beating in the June quarter due to the war in West Asia, which pushed crude oil prices above $100 a barrel from around $72-$74 earlier in the year.

 

OPERATING METRICS

BPCL's September quarter results are expected to be better than the June quarter. "Stronger distillate cracks, a 6% QoQ decline in Brent (oil) and full-quarter benefit of the May 2026 auto fuel (petrol and diesel) price hikes were the key supports," Equirus Securities Pvt. Ltd. said. Crack, or crack spread, is the difference between the market price of a barrel of crude oil and that of refined petroleum products made from it. Distillates, or middle distillates, include products such as diesel, aviation turbine fuel, and kerosene.

 

Prices of diesel shot up 36% on quarter in the September quarter. This increase in crack spreads also boosted Singapore gross refining margins, which grew almost five-fold in the September quarter, according to Nuvama Institutional Equities. Singapore gross refining margin is a financial benchmark that measures the profitability of oil refineries in Asia. It represents the gross amount a refinery makes by converting one barrel of crude oil into a specific petroleum product.

 

Oil prices fluctuated after crossing $100 per barrel in the June quarter, but moderated after peace talks between the US and Iran. However, with the situation stuck in a gridlock, oil prices ticked up once again at the end of the September quarter. This increase in oil prices is expected to boost BPCL's inventory gains.

 

Analysts expect BPCL's gross refining margin for the September quarter to be between $37 and $42 per barrel, compared to roughly $41 in the June quarter and $10.8 in the September quarter a year ago. However, this could moderate after accounting for Special Additional Excise Duty levied by the Centre on exports of petroleum products. Post the windfall tax, BPCL's gross refining margin is likely to be between $19-$25 per barrel, two brokerages said.

 

Oil marketing companies' LPG under-recoveries are expected to decline in the September quarter, partly offset by government compensation and moderation in global LPG prices, analysts said. "OMCs' (oil marketing companies) LPG under-recoveries are likely to fall off QoQ to around INR 110 billion in Q2 or INR 250 per cylinder, versus INR 212 billion or INR 510 per cylinder in Q1," JM Financial Institutional Securities Pvt. Ltd.

 

BPCL is also expected to record a marginal recovery in gross marketing margin in auto fuel products such as petrol and diesel to (-)INR 17.7 per litre from (-)INR 23.4 per litre in the June quarter. Typically, their marketing margins have been around INR 3.5 per litre.

 

BPCL's earnings before interest, tax, depreciation, and amortisation in the September quarter is expected to be INR 64.96 billion, down almost 34% on year, according to the average of estimates from 11 brokerages. The highest estimate is INR 113.91 billion from Motilal Oswal and the lowest is INR 21.30 billion from Prabhudas Lilladher.

 

"Adjusted for LPG compensation, we expect BPCL to report EBITDA of INR 84.4 billion (versus loss of INR 60 billion in Q1), driven by lower crude prices, full benefits of retail fuel price hikes, and advantage of windfall tax on exports of petrol and diesel," Kotak Securities said.

 

BPCL will announce its September quarter earnings on Friday. Wednesday, its shares ended at INR 286 on the National Stock Exchange, down 2.8% from the previous close. The stock is down nearly 9% since it announced its June quarter earnings on Jul. 22.

 

Of the 12 research reports on the company available with Informist, seven have a 'buy' or equivalent recommendation on the stock with an average target price of INR 380, up 33% from the current market price. Two brokerages have a 'hold' recommendation on the stock with a target price of INR 318 and three have a 'sell' recommendation with a price target of INR 272.

 

Following are the Jul-Sept earnings estimates for Bharat Petroleum Corp. Ltd. from 12 brokerages in descending order of the net profit estimate, in INR billion:

 

Brokerages	Net sales	Net profit	EBITDA
360 ONE Capital Market Pvt. Ltd.	1,623.16	122.60	N.A.
Motilal Oswal Financial Services Ltd.	1,255.36	75.95	113.91
Nomura Equity Research	1,663.50	75.10	111.80
Kotak Securities Ltd.	1,606.29	52.99	84.40
Emkay Global Financial Services Ltd.	1,604.95	52.95	69.72
Antique Stock Broking Ltd.	1,594.58	43.41	72.16
YES Securities (India) Ltd.	1,532.59	33.22	60.21
Nuvama Wealth Management Ltd.	1,338.53	24.34	45.29
HDFC Securities Ltd.	1,389.20	23.00	45.90
Equirus Securities Pvt. Ltd.	1,317.47	22.75	63.47
Elara Securities (India) Pvt. Ltd.	1,404.74	12.91	26.37
Prabhudas Lilladher Pvt. Ltd.	1,587.60	6.30	21.30
Average	1,493.16	45.46	64.96

End

 

US$1 = INR 94.46

 

Edited by Saji George Titus

 

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