Mar-26 Review: EBITDA beat; Valuation Favourable

Research evidence excerpt

Mar-26 Review: EBITDA beat; Valuation Favourable

w, margins in the red currently: 4Q marketing profitability was 9% below JEFe. among peers

OMCs are currently making a loss of Rs 14/lt on petrol and Rs 16/lt on diesel based on 15-day 16 EBITDA (US$/bbl) BPCL IOCL HPCL

average pricing vs profit of Rs 3/lt on petrol and loss of Rs 2/lt on diesel in 4Q. OMCs have 12

raised retail fuel prices by 4% since mid-May.

LPG compensation update: The total LPG loss (net of LPG compensation received TD) is at 4

Rs 123bn as of Mar-26. BPCL has received Rs 32bn LPG compensation over Nov'25-Mar'26 0

and will receive the balance (total receivable Rs 75.9bn) monthly till Oct-26. This will directly 24FY FY25 FY26

flow to the PBT. .Source: Company reports, Jefferies

Large capex but likely strategic partner induction lowers capital commitment: Co previously Exhibit 2 - BPCL's valuation attractive related

announced a greenfield refinery project with a total capex of Rs 1tn to be commissioned by to HPCL

FY30. Co is looking to induct a strategic partner with substantial stake to reduce BPCL's capital 3.0 BPCL's valuation attractive related to HPCL

2.3commitment and ensure feedstock supply. The ongoing Bina refinery and petchem expansion

project (total capex Rs 490bn) and a new Petro residue fluidized catalytic cracking unit at 1.5

Mumbai refinery (Rs 142bn) are ongoing. We believe these would lead to increase in debt levels 0.8

and drag RoCE over FY26-29E.

-

Retain Buy: We cut our FY27E PAT by 77% factoring in marketing losses and INR closer to Jan-19 Aug-19 Mar-20 Nov-20 Jun-21 Jan-22 Sep-22 Apr-23 Nov-23 Jul-24 Feb-25 Sep-25 May-26

spot, with likely more hikes needed in retail fuel prices (timeline and quantum unknown). BPCL .Source: Bloomberg, JefferiesBPCL 1-yr fwd PB HPCL 1-yr fwd PB