Bharat Petroleum Corporation: Record-high refining GRM helps in 1Q beat Quick Note

Research evidence excerpt

Bharat Petroleum Corporation: Record-high refining GRM helps in 1Q beat Quick Note

Global Markets Research

Bharat Petroleum Corporation BPCL.NS BPCL IN 23 July 2026

EQUITY: INDIA ENERGY

RatingRecord-high refining GRM helps in 1Q beat Remains Buy

Target price INR 365 RemainsQuick Note

Closing price INR 314 22 July 20261QFY27 beats estimates as record-high GRM partly offsets fuel retailing losses

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

(we expect GRMs to be helped by inventory gains) vs our estimate of USD23.4/bbl (Fig.1 Research Analysts

). Crude throughput fell 2% q-q to 10.2mn tons. Thus, adjusted net loss at INR40bn came India Oil & Gas/Chemicals

in above our estimate of a INR131bn loss (Bloomberg consensus: INR126bn loss). Bineet Banka, CFA - NFASL

bineet.banka@nomura.comWe estimate 1QFY27 implied fuel marketing loss of INR30.4/liter in 1QFY27 (our

+91(22)4037 4044

expectation: INR22.8/liter loss) vs an implied loss of INR3.2/liter loss in 4QFY26. Implied

LPG underrecovery of INR452/cylinder in 1QFY27 came in below our estimate of

INR561/cylinder (INR85/cylinder implied underrecovery in 4QFY26).

BPCL booked an LPG underrecovery of INR54bn in 1QFY27 (INR13bn in 4QFY26), with a

cumulative net negative buffer of INR158bn as of end-June 2026. LPG loss compensation

of INR19.0bn was received in 1QFY27 towards underrecoveries made in FY25 (being paid

in 12 equal monthly installments).

Maintain Buy rating and TP of INR365

Owing to oil prices remaining volatile, earnings visibility for OMCs remains clouded in the

near term. However, we believe the oil market may return to a surplus, in the absence of

any geopolitical events.