On Monday, March 16, there was a decline in the shares of government oil marketing companies. Shares of Indian Oil Corporation (IOC), Hindustan Petroleum Corporation (HPCL), and Bharat Petroleum Corporation (BPCL) fell around 5 per cent in early trade. This fall came after a report by brokerage firm HSBC, in which it had reduced the rating of these shares.
HSBC has reduced the ratings of all three oil marketing companies to “hold”. Apart from this, it has also reduced their earnings estimates and valuation multiples. The brokerage believes that high crude oil prices may put pressure on the earnings of these companies.
Big cut in target prices
HSBC downgraded Indian Oil Corporation (IOC) to “Hold” and reduced its target price from 200 to 150. The rating of Hindustan Petroleum Corporation (HPCL) was also reduced to “Hold”. Its target price was reduced from ₹620 to ₹360. Similarly, the target price of Bharat Petroleum Corporation (BPCL) was reduced from Rs 470 to Rs 340.
The brokerage says that even if the average price of crude oil remains around $75 per barrel, these companies may still suffer losses in their marketing operations, which may later impact their earnings.
Different perspective on ONGC
On the other hand, HSBC has a different view on the shares of Oil and Natural Gas Corporation (ONGC). The brokerage has maintained its “reduce” rating on this stock, but increased its target price from Rs 200 to Rs 240. According to the report, upstream companies like ONGC may benefit from higher crude oil prices. However, risks associated with government policies may limit their additional earning potential.
Views from other analysts
According to Bloomberg data, 23 out of 34 analysts covering HPCL have issued a “Buy” recommendation for the stock. Similarly, out of 34 analysts covering IOC, 20 have given a “buy” rating. At the same time, out of 33 analysts covering BPCL, 24 have advised to buy shares.
stock movement
During Monday’s trading session, around 10:30 am, shares of Hindustan Petroleum were seen trading at around Rs 351.30, a decline of around 4.73 per cent. BPCL shares fell by about 2.90 percent. They came to the level of about 310.05. At the same time, shares of Indian Oil Corporation were trading at Rs 148.95, which was a decline of about 4.85 percent. Since the beginning of the year 2026, the shares of these three oil companies have seen a decline ranging from 10 percent to 29 percent.
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