Bharat Petroleum Corporation (BPCL IN) – Q3FY26 Result Update – EBITDA beat; debt reduction continues – Upgrade to ‘Accumulate’
Published on 24 Jan 2026
We upgrade BPCL to ‘Accumulate’ from ‘HOLD’ as the stock is currently trading at 1.5x P/B, at a discount to its historical average (1.7x) and median (1.6x), indicating valuation comfort. Reported GRM improved to USD13.2/bbl in Q3FY26 (PLe: USD11.4/bbl), due to strong crack spreads. However, implied GMM declined to Rs6.2/lit (PLe: Rs5.5/lit). EBITDA increased to Rs116.8bn, up 54.0% YoY/19.4% QoQ (PLe: Rs102.6bn; BBGe: Rs111.3bn), driven by stronger GRM and higher refining throughput. PAT increased to Rs76.0bn, beating estimates (PLe: Rs62.1bn; BBGe: Rs67.8bn), up 63.5% YoY/18.0% QoQ. BPCL improved its balance sheet strength by reducing debt by Rs143.3bn in 9MFY26. As a result, standalone debt/equity ratio improved to 0.06x from 0.13x QoQ. We build in GRM of USD7.7/7.5/bbl and GMM of Rs5.3/5.0/lit for FY27E/28E. Upgrade to ‘Accumulate’ and revise our TP to Rs381 (earlier Rs374), based on 1.5x Dec’27E P/BV. BPCL has declared a second interim dividend of Rs10/share for FY26.
