India Energy and Cement – 2026

Research evidence excerpt

India Energy and Cement – 2026

AgendaSummary of J.P. Morgan views

Oil: Following the resolution of the Middle East conflict, oil prices are likely to correct but still stay above pre-conflict levels

as countries restock their depleted inventories. Over the longer term, global oil markets are likely toPagebe oversupplied due to:

a) new supply additions and b) demand substitution.

LNG: Global LNG could also face similar downward pressures from FY28, after LNG operations in the Middle East are

restored and winter demand in Europe is in the rearview. Additional supply in FY28 (mostly from the US and Qatar) could

add bearish pressure to global LNG prices and market balance.

Petchem: Petchem have recovered compared to pre-conflict levels. Companies such as Reliance, GAIL likely to benefit

from improved margins over the next few quarters.

Refining: Margins have improved due to stronger diesel cracks. Complex refineries best positioned to benefit from wider

light-heavy spreads.

Reliance: Better refining/petchem margins and weaker INR supportive for the O2C business. Valuations look reasonable as

hold co. discount is c.22% – towards the higher end of the company’s range. Any updates on the New Energy business

could lead to further upside.

Oil marketing companies: Retreating oil prices mean OMCs could fare better than initially feared. Excise duty cuts and

higher retail fuel prices may also help. The longer retail prices/excise duty remain at current levels, the more losses OMCs

can recover which they have suffered over the past 3 months. 1QFY27 results may record large inventory losses. Prefer

BPCL > IOCL > HPCL.

Gas: Industry gas volumes could come back as the situation normalizes. GAIL and PLNG should benefit.