Bharat Petroleum Corporation (BPCL IN) – Q2FY27 Result Update – GRM moderates QoQ on high freight costs – ACCUMULATE
Published on 26 Oct 2026
BPCL reported a net SAED GRM of USD14.0/bbl, down QoQ from USD17.0/bbl, due to higher crude freight costs and the absence of discounts on Russian crude in Q2FY27 (pre-SAED GRM: USD32.5/bbl vs USD41.4/bbl QoQ). Implied GMM improved sequentially from a loss of INR-5.4/ltr to a profit of INR5.5/ltr, as crude oil prices remained soft during July-Aug’26 before surging above USD100/bbl in Sep’26 amid escalating US-Iran tensions. Consequently, standalone EBITDA came in better than expected at INR89.7bn (including an FX loss of INR4.0bn) vs a loss of INR-40.8bn QoQ (PLe: INR21.3bn; BBGe: INR64.4bn). Management indicated planned refinery maintenance shutdowns in Q3/Q4FY27. Accordingly, we have lowered our FY27 throughput estimate to 40.1mmt from 41.9mmt. We estimate FY27E GRM at USD16.0/bbl (Previous: USD12.3/bbl), and revise our FY28/FY29E GRM estimates to USD7.2/bbl each (FY28E previous: USD6.8/bbl). We estimate FY28/FY29E implied GMM at INR4.5/4.4/ltr, respectively. Higher capex in FY28/FY29 remains a key monitorable for maintaining the key return ratios. Maintain Accumulate with a revised TP of INR305 (earlier: INR318), based on 1.2x FY28E P/BV (unchanged).
