Prabhudas Lilladher keeps BPCL at Accumulate, cuts target to Rs 305

what happened

Analysts at Prabhudas Lilladher have kept an Accumulate rating on Bharat Petroleum Corporation (BPCL) and lowered their target price to Rs 305 from Rs 318, according to a report carried by TradingView. The brokerage said the company's net SAED refining margin fell to $14.0 per barrel in Q2FY27 from $17.0 a quarter earlier, reflecting higher crude freight costs and no longer receiving discounts on Russian oil.

Standalone EBITDA reached INR 89.7 bn, above the brokerage's INR 21.3 bn estimate and the INR 64.4 bn BBGe, despite a INR 4.0 bn FX loss. Crude prices stayed soft in July and August 2026 before climbing above $100 per barrel in September amid rising US-Iran tensions. Management flagged planned refinery shutdowns in Q3 and Q4 FY27, so the brokerage cut its FY27 throughput forecast to 40.1 million tonnes from 41.9 million.

The brokerage raised its FY27 margin forecast to $16.0 per barrel from $12.3 and set FY28 and FY29 at $7.2 each. Higher capex in FY28 and FY29 remains the key factor for keeping return ratios intact.

why it matters

For refiners, profits depend on the gap between product prices and feedstock costs, so crude above $100 and pricier freight weigh on refining economics, while planned maintenance limits output in the second half of the year. Investors will watch whether heavier capex erodes the return ratios behind the valuation of 1.2x FY28E P/BV.

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