BPCL Share Price Target 2026: Brokerages retain ‘Add’ and ‘Reduce’ ratings amid flat Bharat Petroleum Q4 profit – Here’s why – Markets

BPCL’s peak earnings to deteriorate amid a challenging scenario due to the West Asia war and rising LPG losses.

A high capex cycle to weigh on return ratios, making risk-reward unfavourable. The brokerage is slashing FY27/28E EBITDA by 19/18% to factor in lower marketing margin and higher costs.

Q4FY26 was insulated from the West Asia war; Q1FY27E is expected to plunge, but BPCL is focusing on uninterrupted fuel supply.

Crude inventory at 27 days; lack of crude storage limits crude inventories beyond 30 days. BPCL secured crude supplies up to Jul-26.

Russian crude share, now at a premium, rose to 41% now (Q4: 31%). FY27 capex guided at Rs 250 bn. Capital allocation largely towards petchem integration and renewables.

Consolidated gross debt/equity ratio is at 0.4x; BPCL aims to keep it at < 1x despite peak capex.

Standalone gross debt was Rs 105 bn (+98% YoY). Bina petchem and refinery expansion achieved 23% progress versus the targeted 32%.

The brokerage does not foresee cost escalation as foreign-currency linked cost forms 13% of total capex. Impairment due to delay in Brazil project; first oil/gas now likely in FY31/32 versus earlier FY29.

Bharat Petroleum Corporation Limited reported Q4 EBITDA of Rs 101 billion, up 30% YoY and 29% above consensus estimates, driven by a sharp rise in GRMs to $17.8/bbl, inventory gains, and improved marketing margins, though partly offset by lower crude throughput and muted domestic sales growth.

Reported PAT stood at Rs 32 billion, down 58% QoQ due to a one-off impairment loss of Rs 43 billion, while adjusted PAT rose 51% YoY to Rs 75 billion, beating estimates by 25%.

The quarter also saw higher employee and other expenses, alongside Rs 19 billion in LPG subsidy support, with cumulative LPG losses at Rs 123 billion net of subsidy.

BPCL Share Price in Focus: Emkay on Bharat Petroleum Corporation Ltd

The brokerage, Emkay, maintains an ‘Add’ rating on Bharat Petroleum Corporation Limited with a target price (TP) of Rs 350, implying an upside potential of nearly 19.5% from current levels.

BPCL’s Q4FY26 SA adjusted EBITDA/APAT of Rs 91.0/50.3bn beat our estimates by 29%/41%, largely driven by better marketing margins (lag effect) and inventory gains, though lagged peers due to a lower inventory cycle.

The company reported GRM of USD18/bbl was slightly below our USD19/bbl estimate, but blended marketing margin of Rs4.2/kg was a 61% beat.

Despite supply disruptions, BPCL maintained adequate crude sourcing through a diversified mix, with supplies secured until July 26.

Spot sourcing rose to 50–55% from 45%, while Russian crude share increased to 40–42% from 25% in Q3, with Russian grades currently trading at a premium.

Q1FY27 is expected to be challenging amid elevated crude prices, spot premiums (USD10-12/bbl), and higher freight. BPCL booked Rs 19.0 bn of LPG subsidy and recorded impairment of Rs 43.5 bn in Brazil upstream.

LPG under-recoveries rose to Rs13.4bn in Q4 from Rs4.7bn QoQ, with current under-recoveries at Rs670/cylinder. Apr-26 MS/HSD market share stood at 30%/29.6%; BPCL is targeting 32%.

First cargo from Mozambique is expected by mid-CY28, with no additional equity requirement anticipated.

The brokerage, Motilal Oswal, maintains a neutral rating with a target price of Rs 265. Here’s why:

(Disclaimer: The above article is meant for informational purposes only, and should not be considered as any investment advice. ET NOW DIGITAL suggests its readers/audience to consult their financial advisors before making any money related decisions.)