Shares of HPCL, BPCL, and IOC Gain Up To 25% YTD: Know Why

State-run oil marketing companies (OMCs) are seeing a rise in profitability in the third quarter of FY26. The improvement comes as refining margins strengthen, driven by higher fuel cracks and lower crude oil prices.

Gasoline and diesel cracks have increased by around US$4–5 per barrel on a quarterly basis. At the same time, crude oil prices have fallen by nearly US$4 per barrel. This combination has created a favorable environment for OMCs, supporting their earnings and helping them maintain pricing stability for consumers.

Stock Performance Reflects Optimism

The positive market sentiment has also boosted the stock prices of oil marketing companies. HPCL and BPCL have both recorded gains of about 9–10% in the third quarter so far. On a year-to-date basis, both companies and IOC have seen stock gains ranging between 16% and 25%.

This rise in share prices shows investor confidence in the companies’ short-term earnings outlook, supported by robust refining and marketing margins.

Fiscal Risks May Cloud the Outlook

However, news reports suggest that the government may face a fiscal shortfall of ₹35,000–60,000 crore for FY26. To bridge this gap, it could increase excise duties on petrol and diesel.

A ₹1-per-litre hike in excise duty could generate about ₹17,000 crore in annual revenue for the government. While this move could help reduce the fiscal gap, it would likely impact the profitability of OMCs.

HPCL Most at Risk

If excise duties are raised, HPCL is expected to face the largest impact because of its greater exposure to the marketing segment. BPCL would also be affected but to a lesser degree, while IOC, with its more diversified operations, may be the least impacted among the three.

Read more: Tata Motors Passenger Vehicles (TMPV) Date Announced: November 14, 2025.

Conclusion

For now, HPCL, BPCL, and IOC are enjoying strong refining margins and improved profitability. But investors should remain cautious as fiscal pressures could prompt government action, such as an excise duty hike, which may weigh on their future performance. The coming months will be crucial for understanding how policy decisions influence the earnings trajectory of India’s top oil marketing companies. 

Disclaimer: This blog has been written exclusively for educational purposes. The securities mentioned are only examples and not recommendations. This does not constitute a personal recommendation/investment advice. It does not aim to influence any individual or entity to make investment decisions. Recipients should conduct their own research and assessments to form an independent opinion about investment decisions. 

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