Following Bharat Petroleum Corporation Limited's (BPCL) Q1 FY27 financial results, major global brokerages Citi and Macquarie have reaffirmed their positive outlook on the state-run Oil Marketing Company (OMC). Despite the company facing severe margin pressures in the recent quarter, institutional confidence remains anchored by BPCL's core operational resilience.
Citi has maintained its Buy rating on the stock, issuing a target price of Rs 350 per share.
- Operational Execution: The brokerage noted that BPCL's "Q1 operational superiority was on full display," underscoring how effectively the company managed its throughput and operations despite a highly challenging macro environment.
- Top Sector Pick: Emphasizing its confidence in the company's fundamentals, Citi highlighted that it continues to prefer BPCL within the broader OMC space.
Macquarie echoed an optimistic sentiment, maintaining an Outperform rating and setting a higher target price of Rs 370 per share.
- Segment Performance: Macquarie captured the quarter's core theme by noting, "Q1FY27 marketing drags, refining cushions." While the marketing division suffered heavy losses due to unpassed crude costs, better-than-expected refining performance helped mitigate the overall financial blow.
- Stable Supply: The firm observed that the underlying supply situation for BPCL remains comfortable, providing operational stability.
- Near-Term Caution: Looking ahead, Macquarie cautioned that the ongoing volatility in global crude oil prices is likely to continue impacting the earnings of OMCs in the near term.
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