Indian Oil & Gas Volatile crude prices limit upside

Research evidence excerpt

Indian Oil & Gas Volatile crude prices limit upside

21 July 2026

Indian Oil & Gas EquitiesOil & Gas

Volatile crude prices limit upside India

◆ A 25% decline in crude prices improves the earnings outlook Saurabh Jain*

for OMCs, but geopolitical uncertainties keep us cautious Analyst,HSBC SecuritiesIndia Materialsand CapitalandMarketsEnergy (India) Private

Limited

◆ At crude of cUSD90/b, OMCs are cash flow positive; lower saurabh2jain@hsbc.co.in

+91 22 6164 0691

crude benefits materially, but a roll back of relief measures

Puneet Gulati*, CFA

remains an overhang Senior Analyst, India Energy, Property & Infra HSBC Securities and Capital Markets (India) Private

◆ Maintain Hold on IOCL, HPCL, and BPCL as higher earnings puneetgulati@hsbc.co.in

+91 82 9189 7591

are offset by lower target valuation multiples

Evan Li*

Head, Asia Energy Transition Research

A decline in crude oil prices improves the earnings outlook. OMCs can deliver The Hongkong and Shanghai Banking Corporation Limited

positive cash flow (INR0.5trn combined operating profits vs INR1.4trn EBITDA in evan.m.h.li@hsbc.com.hk +852 2996 6619

FY26) at the current Brent price of USD90/b. This could improve materially to

INR2.6trn at Brent of USD75/b given earlier fuel price revisions and cuts in SAED * Employed by a non-US affiliate of HSBC Securities (USA) Inc, and is

(excise duties) totalling relief of cUSD35/b (INR17.5/l). However, we expect partial not registered/ qualified pursuant to FINRA regulations

roll back of relief measures in 2HFY27 if Brent prices remain lower, thus limiting the

cash flow generation. Our sensitivity analysis suggests a c7% cut in the potential

cash flow for every INR1/litre (cUSD1.7/b) roll back in retail pump prices/SAED.

HSBC forecasts.