IOCL, BPCL, HPCL end 2% higher as JPMorgan sees massive upside to FY26 earnings

The Nifty Oil & Gas index rose over a percent on May 14

Shares of state-run oil marketing companies (OMCs) — Indian Oil Corporation (IOC), Bharat Petroleum Corporation (BPCL), and Hindustan Petroleum Corporation (HPCL) — moved up to 2 percent on May 14 after international brokerage JPMorgan said the trio could beat their FY26 EBITDA forecasts by a staggering 50–80 percent in just the first half of the fiscal, if current conditions persist.

IOC rose 1.28 percent to Rs 142.97, BPCL gained 2 percent to Rs 313.25, while HPCL advanced 2 percent to Rs 397.

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JPMorgan has turned more bullish on the pack, upgrading HPCL to 'Overweight' from 'Neutral' and hiking the target price to Rs 463 from Rs 424. It also raised its price target for BPCL to Rs 481 (from Rs 417) and for IOC to Rs 199 (from Rs 182), maintaining an ‘Overweight’ call on both.

While inventory losses are expected to weigh on Q1 numbers, strong refining margins—especially in diesel and jet fuel—are likely to more than offset the drag, the brokerage said. Sequential EBITDA gains are still expected for HPCL and BPCL.

The strong margins are primarily driven by favourable refining margins, which have remained robust due to the global demand for refined products, particularly diesel and jet fuel. Additionally, the decontrol of fuel prices in India has provided OMCs with more pricing flexibility, helping them maintain healthy profitability levels.

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What’s working in favour of these firms is not just global demand but also pricing freedom at home. With domestic fuel prices now decontrolled, OMCs are enjoying better pricing power and stronger margins, which could sustain earnings momentum in the coming quarters.

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