Indian Refining Companies Analyzed

YES Securities recently released a report predicting a continued rise in shares of Indian refining companies. This growth is fueled by strong profits and favorable payouts, thanks to rising profits in the global refining business and low crude oil prices. The report suggests companies like Chennai Petroleum, Mangalore Refinery, Reliance Industries, BPCL, IOCL, and HPCL are likely to see their stock prices increase significantly.

Key Points

• Strong profits drive refining company stock increases.
• Low crude oil costs contribute to the positive outlook.
• YES Securities recommends buying specific shares.
• Standalone refiners show strong performance potential.
• Global refining shortages boost refining margins.
• Rupee fluctuations impact OMCs’ profitability margins.

The report highlights that refining companies are doing well because global demand for refined products is high – refineries are making more money. Additionally, the price of crude oil hasn’t gone up, which helps these companies remain profitable. YES Securities believes that stocks of companies like Chennai Petroleum, Mangalore Refinery, Reliance Industries, BPCL, IOCL, and HPCL will rise by as much as 27.5% from where they are now.

So far this year (2025-26), the stocks of these companies have already increased by up to 50%, with Chennai Petroleum (CPCL) leading the way. Other companies like HPCL, BPCL, and IOCL have also risen around 25% each. Reliance Industries’ shares have increased by 21.2% and MRPL’s by 11.3%. It’s important to note that the broader market, the Nifty 50 index, has only gone up by 10.5%, and the Nifty Oil & Gas index has jumped by 12.5% during the same period.

Analysts at YES Securities believe that Indian refineries are perfectly positioned to take advantage of the current situation. They have a bigger supply of products like diesel and gasoline, they can buy their supplies from different places, and their operations are becoming more efficient. This means they can earn more money as refining margins – the difference between what they pay for crude oil and what they sell their products for – are at their highest levels in two years.

Currently, refineries in the United States, Europe, and Asia are making a lot of money due to a shortage of refined products, and there’s a large supply of crude oil available. India is benefiting from this situation because it can buy crude oil at discounted rates due to sanctions against Russia. Although some Russian crude may stop flowing into India, the amount will decrease as trade patterns change.

However, there’s a risk. The Indian Rupee is getting weaker compared to the US Dollar. This means that the cost of buying crude oil and selling refined products will increase, impacting the profits of companies like BPCL, HPCL and IOCL. For every 1 rupee drop in the Rupee’s value, marketing margins (the profit margins on gasoline and diesel) could be affected by about 0.5 rupees per liter.

For example, the Rupee has fallen from 87.3 to 90.56 since mid-August 2025. This situation is concerning because it could slow down the growth of these refining companies.

“Investing in strong, adaptable refineries offers a compelling path to future returns amidst global market volatility.”