Shares of oil marketing companies such as Hindustan Petroleum, Indian Oil Corporation and Bharat Petroleum are rallying in trade on Monday after the United States reached a peace agreement with Iran, potentially putting an end to a month-long conflict that had led to crude prices skyrocketing.
All three stocks are buzzing in trade, with both HPCL and BPCL surging more than 4% while IOC has gained 3.77%. This rally comes after a long period of drawdowns, with shares of HPCL, BPCL and IOC falling 12%, 22% and 25%, respectively, since the start of the war in late February.
The heavy drawdowns came after these OMCs had to incur massive losses due to higher crude prices. To put things into perspective, these companies are expected to report combined Ebitda losses of around Rs 55,000-60,000 crore in the first quarter of FY27, compared to a normalised Ebitda run rate of Rs 30,000 crore a quarter.
Marketing margins, meanwhile, were at negative Rs 14 per litre. But that should improve soon on the back of falling crude prices. In fact, marketing margins have already turned positive at Rs 4.6-4.8/litre based on current crude prices. This is for the first time marketing margins have turned positive since the first week of March.
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