Hindustan Petroleum Corporation Limited, Bharat Petroleum Corporation Limited and Indian Oil Corporation Limited in mid-February as petrol/diesel gross marketing margins declined to an average of Rs 2.3 per liter/Rs 0.2 per litre. Since then, it has been revised by 9-18%. from an average of Rs.8.0/Rs.3.4 per liter in Q4 FY24 to Rs.
The current weakness in marketing margins is primarily due to geopolitical headwinds, continued refining capacity maintenance (which has kept diesel crude refining margins high), and higher freight rates for oil/product transportation. ing.
As such, we expect marketing margins to normalize at higher levels starting in the second quarter of 2025 as the impact of these events subsides.
HPCL, BPCL and IOCL are currently trading at 1.1x, 1.4x and 1.2x their share prices at the end of FY2026. In contrast, the valuations in October 2023 are 0.8 times, 1.0 times, and 0.7 times, respectively. However, the marketing margin of Motor Spirit/High Speed Diesel in October 2023 has decreased significantly to Rs 2/-7 per litre.
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