ICICI Securities has upgraded Bharat Petroleum Corporation to a 'Buy' rating with a significantly higher target price of ₹415 in its research report dated July 24, 2026. The brokerage has also revised its target price upward from the previous ₹400, citing the company's strong Q1FY27 performance and improved operational metrics. This upgrade reflects the company's resilient GRMs, expansion in refining and petrochemical capacities, comfortable leverage position, robust dividend yield, and the revival of its Mozambique project.
BPCL reported a GRM (net of SAED) of USD17.0/bbl (Pre-SAED - USD41.4/bbl) for Q1FY27, demonstrating strong refining performance. However, the company faced challenges with implied GMM reporting a loss of ₹5.4/ltr due to suppressed marketing margins on key petroleum products as refining cracks and crude prices increased sharply. Despite these headwinds, the company's standalone EBITDA loss of ₹40.8bn (including fx gain of ₹3.5bn) came in significantly better than estimates, with analysts expecting a loss of ₹147.1bn (PLe) and ₹137.1bn (BBGe). The strong GRM performance was partly offset by losses in retail fuel margins and higher LPG under-recovery, which drove overall losses in H1FY27.
Based on Q1FY27 performance, ICICI Securities has revised upward the FY27E GRM estimate to USD12.3/bbl while maintaining the FY28E GRM at USD6.8/bbl. The brokerage has also revised implied GMM estimates lower to ₹0.4/ltr and ₹4.8/ltr for FY27E/FY28E (earlier: ₹2.4/4.5/ltr), as cracks and crude oil are expected to stay elevated in the near term. The revised estimates reflect the company's improved operational performance and better-than-expected Q1FY27 results.
ICICI Securities maintains its bullish outlook on BPCL driven by five key factors: resilient GRMs, expansion in refining and petrochemical capacities, comfortable leverage position, robust dividend yield, and the revival of its Mozambique project. The brokerage's revised target price of ₹415 is based on these positive fundamentals and expectations of continued operational improvements in the refining sector. The company's strong Q1FY27 performance, with adjusted EBITDA loss of ₹40.8bn beating both Street and I-Sec estimates, reinforces the positive investment thesis despite near-term challenges in retail fuel margins.
