Budget may tap oil windfall? JM Financial flags excise-duty risk for HPCL, BPCL, IOCL; backs Oil India, ONGC
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With the Union Budget 2026-27 just weeks away and Brent crude hovering near $60 a barrel, JM Financial is urging investors to pick their oil and gas bets carefully. The brokerage has reiterated buy ratings on Oil India and ONGC, while warning of fiscal risks for state-run oil marketing companies, maintaining a sell on HPCL and reduce calls on IOCL and BPCL, citing potential excise-duty hikes that could offset gains from low crude prices. JM Financial said subdued crude prices could continue to support near-term marketing margins for OMCs but cautioned that the government could use the upcoming Budget to claw back revenue gains through higher excise duties on petrol and diesel. “OMCs’ blended auto-fuel GMM of ~INR 8.2/ltr (vs. historical GMM of INR 3.5/ltr) implies INR 3-4/ltr scope for a hike in excise duty,” the brokerage noted. “Every INR 1/ltr increase in excise duty can boost central government revenue by INR 165 bn annually.” Upstrea...