Oil And Gas Q2 Review: OMCs Drive Overall YoY Strength; Gas Companies See Lower Margin: ICICI Securities

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ICICI Securities Report

Q2 FY26 Ebitda/PAT improved 33%/36% YoY and 3%/9% QoQ, respectively, for our oil and gas coverage universe. The rise in Ebitda was driven by strong YoY growth seen in the OMCs, Reliance Industries and GulfOil Lubricants, with gas companies/upstream reporting weaker earnings.

Strong refining margins, decline in LPG under-recovery and improvement in RIL’s consumer segments drove the YoY operational improvement, even as retail fuel margins saw some YoY softness for the OMCs.

A further decline in APM allocation raised gas costs and dragged margins for city gas distributions.

Lower crude realisations impacted upstream earnings, with one-off factors impacting Oil India’s production as well.

We remain positive on downstream names and selective on the gas space; but upstream may remain under pressure in the near term.

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