Stories
OMCs Expected to See Strong Q2FY27 Profit Recovery on Improved Margins
- •State-run oil marketing companies are projected to post a combined profit of Rs 15,000 crore in Q2FY27, rebounding from a massive loss in the previous quarter.
- •The profit recovery is primarily driven by improved auto-fuel marketing margins, lower crude oil prices, and the full impact of prior retail fuel price hikes.
- •LPG under-recoveries are estimated to have eased significantly due to a decline in international contract prices, spot premiums, and domestic price hikes.
- •Indian Oil, Bharat Petroleum, and Hindustan Petroleum are all expected to return to profitability at both operating and net-profit levels.
- •Analysts caution that the recovery remains vulnerable to renewed crude oil volatility and the escalating conflict in the Middle East.
Key Questions Answered
State-run oil marketing companies are expected to report a combined profit of around Rs 14,470 to Rs 15,000 crore in the July-September quarter of FY27, bouncing back from a cumulative loss of Rs 18,150 crore in the previous quarter.
The sequential recovery is driven by improved auto-fuel marketing margins resulting from lower crude oil prices in early July and the full impact of an earlier Rs 7 per litre retail fuel price hike by the government. Additionally, domestic cooking gas under-recoveries eased due to a 19% quarter-on-quarter drop in Saudi contract prices, lower spot premiums, and higher retail cylinder prices.
IOCL is estimated to post a profit of Rs 7,303 crore, BPCL is expected to report a profit of Rs 4,520 crore, and HPCL is projected to earn a profit of Rs 2,647 crore for the second quarter of FY27.
