OMCs Likely to See Sequential Dip in Q2FY26 Despite Annual Gains

State-run Oil Marketing Companies (OMCs):

, Bharat Petroleum ( ), and Hindustan Petroleum ( ) — are expected to post a sequential fall in earnings for Q2FY26 (July–September 2025) due to higher crude oil prices and flat retail fuel rates, which squeezed marketing margins. Crude Price Impact: • Crude oil prices rose by around 4% in rupee terms during the quarter. • Retail fuel prices, however, remained unchanged, leading to margin compression. • Analysts note partial relief from lower inventory losses and an estimated ₹30,000 crore government subsidy for subsidised LPG sales. Brokerage Forecasts: • Kotak Institutional Equities: Predicts sequential decline in profits — BPCL down 34%, HPCL down 46%, and IOCL down 36%. • On a yearly basis, however, profits are expected to rise sharply: BPCL up 41%, HPCL up 51%, and IOCL up 114%. • JM Financial: Expects a 16–37% drop in OMCs’ EBITDA sequentially due to weaker auto-fuel margins. Refining Margins (GRMs): • GRMs expected to improve quarter-on-quarter, supported by stronger diesel cracks. • JM Financial projects Q2FY26 GRMs at $6.4–6.9 per barrel versus $2.2–4.9 in Q1FY26. EBITDA Projections: • BPCL: down 37% q-o-q to ₹6,100 crore • HPCL: down 37% to ₹4,800 crore • IOCL: down 16% to ₹10,600 crore Upstream Outlook: • ONGC and Oil India likely to benefit from higher crude and gas volumes. • ONGC’s EBITDA expected to rise 1.1% q-o-q; Oil India’s by 5.9% q-o-q.