IOC vs BPCL vs HPCL: Which oil PSU stock to buy after Q4 results, falling crude prices?

Stocks to buy: All three oil market companies - Indian Oil Corporation (IOC), Bharat Petroleum Corporation (BPCL) and Hindustan Petroleum Corporation (HPCL) - are in the limelight amid weakness in crude oil prices and quarterly earnings for the fourth quarter of the financial year 2024-25 (Q4 FY25).

The question remains which PSU oil stock looks best poised for gains against this backdrop.

Earnings Snapshot

IOC Q4 Results

IOC's Q4 net profit rose 50% year-on-year (YoY) growth in standalone net profit to ₹7,264.85 crore, due to inventory gains, as the company processed crude oil bought at lower prices and sold products made from it when prices had risen.

Revenue from operations, however, fell 1% to ₹2.17 lakh crore in Q4. IOC's gross refining margins (GRM) for Q4 stood at $7.85 per barrel, as against $8.39 a barrel in the same period last year.

HPCL Q4 Results

Meanwhile, HPCL reported an 18% YoY rise in its standalone net profit for Q4 FY25 to ₹3,355 crore. Its total income for the quarter under review stood at ₹1,19,126 crore, 2.7% lower than ₹1,22,386 crore posted in the March quarter of FY24.

Q4 FY25 witnessed a very strong operational performance. Refineries recorded the highest-ever quarterly throughput of 6.74 million tonne. The company board recommended a final dividend of ₹10.50 per equity share for FY25.

BPCL Q4 Results

However, BPCL saw a 24% decline in standalone net profit to ₹3,214.06 crore in Q4. Its revenue from operations fell 4% YoY to ₹1.26 lakh crore. Market sales rose 1.82 per cent to 13.42 million tonnes in Q4 and by 2.66 per cent to 52.40 million tonnes in FY25.

The board of directors of the company announced a final dividend of ₹5 per equity share.

IOC outperformed with 50% YoY profit growth to ₹7,265 crores, driven by superior operational efficiency despite flat revenues, explained Atul Parakh, CEO of Bigul. He added that HPCL grew 18% to ₹3,355 crore thanks to increased crude throughput (6.74 MMT vs 5.84 MMT) and stronger domestic sales. Meanwhile, BPCL's profits fell, hammered by plummeting refining margins that nearly halved from $14.14 to $6.82 per barrel and ongoing LPG subsidy burdens.

"The real story behind BPCL's underperformance? Their GRM collapsed to $6.82/barrel from a whopping $14.14 last year. Meanwhile, HPCL increased crude throughput to 6.74 MMT (up from 5.84 MMT) and boosted domestic sales to 12.11 MMT," Parakh explained.

Crude on slippery slope spells windfall for OMCs

All three stocks are also in focus amid weakening crude oil prices. Lower crude prices tend to boost refining margins and improve profitability for oil marketing companies.

After briefly sliding below $60 per barrel, Brent crude oil prices have rebounded to $63 apiece. However, they are still significantly lower by 14% for the year.

"A fall in global oil prices directly could have a positive impact on refining margins and improve the marketing segment profitability, particularly for companies like HPCL, BPCL, and IOCL, but erode the earnings for the upstream players – ONGC and Oil India," YES Securities said in a report.

So far this year, IOC share price is up 1.61% while BPCL has risen 2.96% and HPCL has lost 7%.

IOC vs BPCL vs HPCL: Which stock to buy?

Fundamentally, analysts believe OMCs will continue to do well because GRMs are expected to be strong.

"By and large, these oil marketing companies are likely to do well because gross refining margins (GRMs) are expected to remain strong, and crude oil prices should stay within a stable range, despite ongoing geopolitical tensions. These crises may create short-to medium-term pressure, and occasionally, we might see some unusual spikes. However, even during those spikes, prices tend to revert to long-term averages," said Kranthi Bathini of Wealthmills Securities.

He added that while oil marketing companies look good for the long term and can offer stable returns, among them, IOC remains my preferred choice for long-term investment.

"On a longer-term, I like IOC because of its better dividend yield, stable price, and strong future business plans—especially in alternative energy and green hydrogen. IOC remains my top priority in the pecking order," said Kranthi Bathini.

Echoing similar views, Parakh said after the Q4 results, IOC emerges as a better performer among the three OMCs. "With crude prices continuing their downward trend, IOC looks best equipped to capitalise thanks to their operational efficiency gains and superior scale. For investors looking at the OMC space right now, IOC offers the most compelling story and strongest momentum," Parakh added.

However, on technical charts, BPCL is showing momentum, according to Anshul Jain, Head of Research at Lakshmishree Investments.

"Post Q4 results, IOC has tested the 50% retracement of its fall from the high at 149 and is now facing resistance. A close above 150 may trigger fresh momentum. HPCL is nearing strong weekly resistance at 417, suggesting possible consolidation. In contrast, BPCL is sustaining above its 92-day cup and handle breakout level at 312, indicating strength, and may head towards the next target of 368 in the near term," Jain said.

Disclaimer: This story is for educational purposes only. The views and recommendations made above are those of individual analysts or broking companies, and not of Mint. We advise investors to check with certified experts before making any investment decisions.