Avendus has maintained its "buy" recommendation on HPCL, BPCL and IOC. For HPCL, the brokerage has a price target of ₹590, which implies a potential upside of 27% from current levels. For BPCL, the ₹445 price target implies an upside potential of 22%, while Indian Oil shares have a 12% upside, according to Avendus' price target of ₹185.
The brokerage said that the earnings of these companies in the first half of financial year 2026 were "exceptionally strong" and that the outlook remains strong.
The sudden diesel crack spike was led by a supply disruption, which has already normalized, according to Avendus, which added that it sees the levels between $18 to $22 per crack, as more sustainable on a medium-term basis, which bode well for both refining and marketing segments of these companies.
With crude prices remaining at benign levels, marketing margins may remain above normal for these companies, providing cushion to any potential hike in prices.
Avendus believes that valuation of these companies continue to remain attractive with BPCL and HPCL trading at a discount between 15% to 20% to their historical multiple.
Majority of the analysts who have coverage on these oil marketing companies have a "buy" recommendation on them.
Shares of HPCL are trading 1.2% higher at ₹465.35, while those of BPCL are trading 0.6% higher at ₹367.25. Shares of Indian Oil are outperforming their peers, trading 2% higher at ₹166.8. These stocks have gained between 12% to 25% so far in 2025.
