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Informist, Monday, Jul 20., 2026

 

By Sunil Raghu

 

AHMEDABAD – Bharat Petroleum Corp. Ltd. is expected to report a steep loss for the June quarter, mainly due to marketing losses incurred after a rise in crude oil prices, freight, and insurance costs caused by the war in West Asia. These higher costs could not be passed on to consumers by way of higher pump prices for fuels, including liquefied petroleum gas.

 

Refining margins are also likely to remain subdued during the quarter, adding to the pressure on the company's overall performance, according to analysts.

 

The state-owned oil refiner and marketing company is expected to record a loss of nearly INR 113 billion for the June quarter, compared to a profit of over INR 61 billion in the June quarter last year. The highest estimate for loss is INR 179 billion from Emkay Global Financial Services Ltd. and the lowest estimate for the loss is nearly INR 42 billion from Nuvama Wealth Management Ltd.

 

Revenue for the June quarter is seen jumping nearly 22% on year to INR 1.37 trillion, led primarily by high inventory gains. From the trailing quarter, BPCL's revenue is expected to jump nearly 16%. The revenue estimates range from a high of INR 1.72 trillion by YES Securities (India) Ltd. to a low of INR 1.15 trillion by Dolat Capital Market Pvt. Ltd.

 

In the March quarter, BPCL had posted a net profit of over INR 75 billion on revenues of INR 1.19 trillion.

 

REFINING MARGINS

 

BPCL has a total refining capacity of 41 million tonnes per annum at its refineries in Mumbai, Kochi, and Bina in Madhya Pradesh. BPCL accounts for about 15% of the country's total refining capacity.

 

BPCL's earnings in the June quarter are expected to be led by the refining segment. Brokerages expect BPCL's June quarter gross refining margins to rise way above the year-ago level and some brokerages see it touch a high of $23 per barrel, up very sharply from $4.9 per barrel a year ago and $17.8 per barrel a quarter ago. The gross refining margin is the difference between the cost of crude oil and the value of refined products produced from the crude oil. It is a key indicator for pricing, profitability, and financial health of refineries.

 

Most brokerages also see a minor slip in BPCL's crude refining throughput to near 10.3 million tonnes, down about 1% on year. With higher refining margin and stable throughput, BPCL is expected to see higher refining income during the June quarter.

 

MARKETING MARGINS

 

Unlike refining, the company's marketing segment is unlikely to be able to provide any support to earnings, with petrol and diesel margins remaining under pressure due to the sharp rise in crude oil prices caused by the war in West Asia.

 

Kotak Securities sees auto fuel under-recovery of INR 270 billion for the June quarter, compared to INR 80 billion in the June quarter a year ago and INR 66 billion in the March quarter. Nomura Equity Research sees petrol and diesel marketing margins for Bharat Petroleum to turn sharply negative, with a blended loss of INR 20.7 per litre. Prabhudas Lilladher Pvt. Ltd. sees the company's marketing margins record a loss of INR 8.5 per litre on sales volumes of 14 million tonnes.

 

The government mandates state-owned oil marketing companies to supply LPG cylinders to a section of domestic customers at a regulated price, which results in oil companies making losses on such sales when international prices rise above a particular level. Though the government did compensate oil marketing companies for subsidised sales of LPG, BPCL's under-recovery on LPG widened sharply to INR 560 per cylinder for the June quarter on elevated Saudi crude oil prices and the depreciation of the rupee. The LPG under-recovery, which was around INR 80-INR 100 per cylinder in March quarter of 2025-26 (Apr-Mar), spurted to INR 170 per cylinder in April and to nearly INR 670 per cylinder in May. BPCL also serves nearly 100 million liquefied petroleum gas customers.

 

Brokerages do not see higher crude oil prices that could lead to any inventory gains, and better refining margins being enough to offset losses from selling fuels below cost. As a result, BPCL, like other state-run oil marketing companies, is expected to report significant EBITDA losses for the June quarter.

 

BPCL is expected to post negative earnings before interest, tax, depreciation, and amortisation of INR 130 billion for the June quarter, with estimates ranging from a loss of INR 185 billion from Kotak Securities Ltd. to a loss of nearly INR 38 billion by Nuvama Wealth Management Ltd.

 

Analysts will watch out for updates from BPCL management on the company's expansion projects, particularly the construction timeline for the proposed 9-million-tonne Andhra Pradesh green field refinery.

 

Analysts will also watch for progress on the INR-600-billion petrochemicals complex planned alongside the Andhra refinery and will want to know whether the project remains on track to become operational in FY28. They would also seek updates on the expansion of the 7.8 million tonnes per annum Bina refinery in Madhya Pradesh, which the company is expanding to 12 million tonnes per annum capacity.

 

The company will announce its June quarter earnings Wednesday. Its shares have fallen near 10% since it released its March quarter earnings on May 21. At 1247 IST, the stock traded 0.8% lower at INR 313.10 on the National Stock Exchange.

 

Of the 12 brokerage reports on the company available with Informist, 10 have a "buy" recommendation with an average target price of INR 365 per share. This is nearly 16% higher than the current market price. Two brokerages have a "sell" recommendation. 

 

Following are the Apr-Jun earnings estimates for Bharat Petroleum Corp. Ltd. from 13 brokerages in descending order of the estimate of net loss in INR billion:

 

Broking firm	Net sales	Net profit	EBITDA
Emkay Global Financial Services Ltd	1,592.11	-179.01	-160.83
Kotak Securities Ltd.	1,176.27	-149.98	-185.44
Dolat Capital Market Pvt. Ltd.	1,157.00	-143.81	-179.17
ICICI Securities Ltd.	1,570.20	-136.90	-170.10
Nomura Equity Research	1,305.10	-131.00	-157.80
Prabhudas Lilladher Pvt. Ltd.	1,408.40	-124.00	-147.10
JM Financial Institutional Securities Pvt. Ltd.	1,161.42	-112.47	-131.71
Motilal Oswal Financial Services Ltd.	1,188.00	-103.40	-123.30
Elara Securities (India) Pvt. Ltd.	1,306.53	-99.88	-117.96
Equirus Securities Pvt. Ltd.	1,500.20	-94.61	-109.13
YES Securities (India) Ltd.	1,727.41	-81.26	-91.24
PhillipCapital (India) Pvt. Ltd.	1,369.46	-70.82	-77.12
Nuvama Wealth Management Ltd.	1,366.09	-41.83	-38.13
Average	1,371.42	-113.00	-129.93

 

End

 

US$1 = INR 96.51

IST, or Indian Standard Time, is five-and-a-half hours ahead of GMT

 

Edited by Himanshi Gupta

 

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