Bharat Petroleum Corporation (BPCL IN) – Q2FY26 Result Update – Exceeded EBITDA/PAT cons – HOLD
Published on 03 Nov 2025
MoPNG approved Rs75.94bn compensation for LPG under-recoveries.
Bharat Petroleum Corporation (BPCL) reported GRM of USD10.8/bbl (Ple USD9.1/bbl), and implied gross marketing margin of Rs7.4/lit (Ple Rs4.9/lit) in Q2FY26. Better than expected GRM and GMM resulted in an EBITDA of Rs97.8bn (Ple: Rs70.4bn, BBGe Rs80.9bn, +116.7% YoY, +1.2% QoQ). Lower than expected interest cost and inline depreciation led to an improvement in PAT, which stood at Rs64.4bn in Q2FY26 (Ple Rs37.6bn, BBGe Rs56.2bn, +168.7% YoY, +5.2% QoQ). MoPNG approved Rs75.9bn LPG under-recovery compensation, to be received in 12 monthly instalments from Nov’25. BPCL has repaid debt worth Rs.110.6bn in H1FY26. Standalone debt/equity ratio improved from 0.28x to 0.13x YoY in Q2FY26. (Q1FY26 – 0.13x) We build in GRM of USD7.5/bbl and marketing margin of Rs5.3/5.0/ltr for FY27E/28E respectively. We re-iterate our rating at ‘HOLD’ with a TP of Rs361 (earlier Rs347) based on 1.5x FY27/28E P/BV as the stock appears fairly valued.
