Bharat Petroleum Corporation: Record-high GRM softens the blow in a washout quarter Refining upcycle to partly offset fuel marketing losses; retain Buy with a higher TP of INR395

Research evidence excerpt

Bharat Petroleum Corporation: Record-high GRM softens the blow in a washout quarter Refining upcycle to partly offset fuel marketing losses; retain Buy with a higher TP of INR395

Global Markets Research

Bharat Petroleum Corporation BPCL.NS BPCL IN 24 July 2026

EQUITY: INDIA ENERGY

Record-high GRM softens the blow in a washout quarter Rating Remains Buy

Target priceRefining upcycle to partly offset fuel marketing losses; Increased from INR 395retain Buy with a higher TP of INR395 INR 365

Strong beat in 1QFY27; BPCL likely to benefit from global refining upcycle Closing23 July 2026price INR 310

BPCL’s 1QFY27 standalone EBITDA loss of INR41bn was sharply above our/consensus loss

forecasts of INR158bn/INR137bn, largely due to strong refining GRM of USD41.4/bbl (please Implied upside +27.4%

see our first cut note). BPCL has consistently reported strong GRM among OMC peers over

the years given its relatively modern assets allow it a higher crude flexibility, and help produce Market Cap (USD mn) 13,922.1

higher proportion of high-value middle distillates. We expect the current strong refining crack ADT (USD mn) 32.1

environment to sustain in the near to medium term, given: 1) large-scale damages to Russian

refining capacities due to the ongoing war (Fig.7); 2) decreasing China refinery run rates Relative performance chart

leading to export curbs of petroleum products; 3) ~5% of global petroleum product flow from

the Middle East currently being stuck at sea due to the blockade in the Strait of Hormuz. BPCL

being a refinery-focused oil marketing company benefits from strong refining cracks, which

may offset a part of the losses in the fuel marketing segment (as seen in 1QFY27 results).

Entering a heavy capex cycle, supported by a strong balance sheet