Bharat Petroleum Corporation (BPCL IN) – Q1FY27 Result Update – Strong refining performance drives earnings beat – Upgrade to ‘HOLD’
Published on 23 Jul 2026
BPCL reported a GRM (net of SAED) of USD17.0/bbl (Pre-SAED - USD41.4/bbl). However, implied GMM reported a loss of INR5.4/ltr due to suppressed marketing margins on key petroleum products as refining cracks and crude prices increased sharply. Although the company reported a standalone EBITDA loss of INR40.8bn (incl. fx gain of INR3.5bn), it came in better than est. (PLe: -INR147.1bn; BBGe: -INR137.1bn). PAT came in at a loss of INR39.6bn, ahead of est. (PLe: -INR124.0bn; BBGe: -INR126.3bn). Based on Q1FY27 performance, we revise upward FY27E GRM estimate to USD12.3/bbl while maintaining FY28E GRM at USD6.8/bbl (earlier: USD7.1/6.8/bbl). Consequently, we revise implied GMM lower to INR0.4/ltr and INR4.8/ltr for FY27E/FY28E (earlier: INR2.4/4.5/ltr), as cracks and crude oil are expected to stay elevated in near term. We upgrade BPCL to “Hold” from 'Reduce' considering better performance in Q1FY27 with a TP of INR305 (earlier: INR270), based on 1.2x FY28E P/BV(earlier 1.1x).
