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Informist, Wednesday, Jan. 21, 2026
 

By Sunil Raghu

 

AHMEDABAD – Bharat Petroleum Corp. Ltd. is expected to report a sharp improvement in its earnings for the December quarter on the back of strong refining margins, improved product cracks, and stable fuel marketing margins, according to earnings estimates compiled by Informist from 10 brokerages.

 

The state-owned oil marketing company's net profit for the December quarter is estimated to rise 48% on year to about INR 68.8 billion. In the year-ago quarter, BPCL's net profit was impacted by subdued refining margins and inventory-related pressures. Revenue for the reporting quarter is seen 4.5% lower on year around INR 1.08 trillion, reflecting softer crude-linked realisations and largely steady fuel demand. On a sequential basis, BPCL's earnings are expected to see a modest improvement, with aggregate net profit expected to show a rise of nearly 7%, and revenue is seen up nearly 3%.

 

The highest net profit estimate of over INR 87 billion is from Elara Securities (India) Ltd., while the lowest is over INR 62 billion from Prabhudas Lilladher Pvt. Ltd., which sees refining margins much lower than the estimates by other brokerages.

 

The revenue estimates range from INR 927 billion by Motilal Oswal Financial Services Ltd. to INR 1.31 trillion by J.M. Financial Institutional Securities Pvt. Ltd., which sees company's fuel marketing margins fall over one-third in the quarter, despite expected higher volumes.

 

In the September quarter, BPCL had posted a net profit of over INR 64 billion on revenues of INR 1.22 trillion. The company will make public its December quarter on Friday. A majority of the brokerages polled see BPCL's crude refining throughput at 10.2 million tonnes, up 6% on year from 9.5 million tonnes. The company's sales volume is expected at 13.5-14.1 million tonnes, up 3-5% on year.

 

REFINING MARGINS

BPCL has a total refining capacity of 35.3 million tonnes per annum at its refineries in Mumbai, Kochi, and Bina in Madhya Pradesh. BPCL accounts for about 14% of the country's total refining capacity. BPCL's strong earnings in the December quarter are expected to be led by the refining segment, boosted by firm middle distillate cracks, and lower crude prices. Brokerages expect BPCL's gross refining margins to remain well above the year-ago level, supported by a favourable crude slate and product spreads. For the December quarter, the brokerages see BPCL's gross refining margins in a range of $10.5-$13.7 per barrel, compared with nearly $6 per barrel a year ago and $11 per barrel in the September quarter.

 

The gross refining margin is the difference between the cost of crude oil and the value of refined products. It is a key indicator for pricing, profitability, and financial health of refineries globally. The benchmark Singapore GRM for the December quarter averaged $7.5 per barrel, compared with $3.8 per barrel in the September quarter and around $5 per barrel a year ago. The Singapore GRM serves as the primary benchmark for refineries in Asia, and is considered to be a key indicator for refineries globally.

 

Dolat Capital Market Pvt. Ltd. sees BPCL losing nearly $1 per barrel in the December quarter as its cost of buying crude may be higher than the actual market price.

 

The expected rise in product cracks--the difference between the price of a barrel of crude oil and that of a refined product--too, helps boost GRMs. As per the available data, crude oil prices for Indian refiners in the December quarter averaged near $64 per barrel, down 14% from last year's average of nearly $74 per barrel. Motilal Oswal lists benchmark gasoline cracks for the December quarter 68% higher on year at $23.2 per barrel and those for diesel are up 42% on year at $15.1 per barrel.

 

 

MARKETING MARGINS

The company's marketing segment is expected to provide stable support to earnings, with petrol and diesel margins remaining positive despite some sequential moderation. Analysts expect domestic fuel sales volumes to grow modestly on year, supported by steady demand from the transport sector and limited price volatility. Motilal Oswal sees BPCL's gross marketing margin for the December quarter at INR 6.5 per litre and J.M. Financial sees it INR 5 per litre, down from INR 7.5 per litre in the December quarter last year.

 

BPCL serves nearly 100 million liquefied petroleum gas customers. The government mandated the state-owned oil marketing companies to supply LPG cylinders to a section of domestic customers at a regulated, below-cost prices despite international prices being high. These companies bore the losses from these under-recoveries for a long period.

 

BPCL said its under-recovery on LPG was nearly INR 105 billion in 2024-25 (Apr-Mar). The under-recovery was estimated at INR 220 per cylinder in January and is now estimated to be down to INR 25-INR 30 per cylinder in December. On Aug. 8, the government announced a compensation of INR 300 billion to be paid to oil marketing companies in 2025-26 (Apr-Mar) as compensation for the under-recoveries. As per published data, BPCL's share of this nearly INR 80 billion, which is being disbursed in monthly instalments of little over INR 12 billion a month, beginning November. This is also expected to support the company's net profit and revenue.

 

BPCL's earnings before interest, tax, depreciation, and amortisation are expected to average INR 108 billion, up 46% from INR 76 billion in the year-ago quarter and 13% higher from INR 98 billion in the previous quarter. The EBITDA estimates range from INR 132 billion by Elara Securities to INR 98.5 billion by ICICI Securities, with higher estimates factoring in stronger gross refining margins and stable fuel marketing margins.

 

Analysts will watch for BPCL management comments about the company's expansion projects, particularly the construction timeline for the proposed 9-million-tonne Andhra 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 2027-28 (Apr–Mar). They would also seek updates on the expansion of the 7.8 million tonnes per annum Bina refinery, which the company is expanding to 12 million tonnes per annum capacity.

 

The company will announce its December quarter earnings Friday. Its shares have fallen nearly 1.4% since it released its September quarter earnings on Oct. 31. Wednesday, the stock was lower 0.9% at INR 351.95 on the National Stock Exchange. 

 

Of the 10 brokerage reports on the company available with Informist, five have 'buy' recommendation with an average target price of INR 435 per share. This is nearly 24% higher than the current market price. Two brokerages have a 'hold' rating, while three have a 'sell' call on the stock at an average target price of INR 341. 

 

Following are the Oct-Dec earnings estimates for Bharat Petroleum Corp. Ltd. from 10 brokerages in descending order of the estimate of net profit in INR billion:

 

Broking firm	Net profit	Net sales	EBITDA
	(in INR billion)
Elara Securities (India) Ltd	87.42	188.88	131.66
Motilal Oswal Financial Services Ltd	74.90	927.40	115.30
Dolat Capital Market Pvt. Ltd	72.63	1,077.37	110.70
Kotak Securities Ltd	69.495	1,102.57	106.91
YES Securities (India) Ltd	69.20	1,046.84	107.15
Emkay Global Financial Services Ltd	64.59	1,065.59	104.58
Nuvama Wealth Management Ltd	63.20	1,089.22	99.95
JM Financial Institutional Securities Pvt Ltd	62.38	1,307.60	100.28
ICICI Securities Ltd	62.30	989.30	98.50
Prabhudas Lilladher Pvt Ltd	62.10	1,108.10	102.60
Average	68.82	1,080.29	107.76

 

End

 

US$1 = INR 91.70

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

 

Edited by Akul Nishant Akhoury

 

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