India Fuel Retailers: Quality Outperforms: BPCL over HPCL

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India Fuel Retailers: Quality Outperforms: BPCL over HPCL

Update

July 23, 2026 01:33 AM GMT

Morgan Stanley Asia (Singapore) Pte.+MIndia Fuel Retailers | Asia Pacific Mayank Maheshwari

Equity Analyst

Quality Outperforms: BPCL Mayank.Maheshwari@morganstanley.comMorgan Stanley India Company Private Limited+ +65 6834-6719

Pranitha Shetty

Research Associateover HPCL Pranitha.Shetty@morganstanley.com +91 22 6118-3022

Hinal Choudhary

Key Takeaways ResearchHinal.Choudhary@morganstanley.comAssociate +91 22 6118-2044

Bharat Petroleum beat estimates and outperformed HPCL, which reported in-line Morgan Stanley Asia (Singapore) Pte.+

losses. BPCL's loss was US$8.4/bbl (ex-inventory gain), vs HPCL at US$20/bbl Vivek Rajamani

BPCL's book value erosion was lower than expected and the balance sheet debt Vivek.Rajamani@morganstanley.com +65 6834-6740

increase was much less. HPCL saw a 20% QoQ increase in net debt; reversal of Ryan M Heng

taxes helped conserve BV. Equity Analyst

Ryan.Heng@morganstanley.com +65 6834-6465

BPCL's GRM was US$35/bbl (ex-inventory gain), US$17-18/bbl if we include the

impact of windfall taxes, significantly outperforming Reliance, MRPL, and HPCL.

Cooking gas-related losses were US$6-7/bbl, which we estimate will be recovered

from the government.

HPCL and BPCL's diesel volumes grew ~9% YoY despite ~US$25/bbl in marketing India Oil & Gas

Asia Pacific

losses, as private players pulled back and gave up ~200bps of market share. Industry View In-Line

BPCL's core loss of ~Rs72bn after adjusting of inventory gain (US$3/bbl) and

cooking gas subsidy beat MS and consensus expectations on the back of strong

refining margins (adjusted for windfall US$24/bbl). HPCL's core loss was Rs170bn

(adjusted for inventory loss of US$1.1/bbl and tax reversal). We expect a US$8/bbl