OMCs Poised for Strong Q3FY26 on Robust Refining Margins

• State-run oil marketing companies (OMCs) like Hindustan Petroleum, Bharat Petroleum, and Indian Oil are expected to report strong Q3FY26 results.
• Healthy refining margins, with Singapore GRM averaging $7.5/barrel, are the primary driver for the anticipated strong performance.
• Despite a 6% sequential decline in average oil prices and unchanged retail prices, product cracks led to higher refining margins.
• LPG compensation recognition and lower per-cylinder under-recoveries will support blended marketing margins.
• Upstream companies like ONGC and Oil India are expected to see a decline in crude oil realizations due to falling Brent crude prices and global oversupply.

Why It Matters: OMCs are set for a strong Q3FY26 driven by high refining margins, despite challenges in crude prices and marketing.