JPMorgan downgrades Hindustan Petroleum as brokerage turns cautious on oil marketing companies

JPMorgan has turned cautious on the oil marketing companies (OMCs) and its only preference is Indian Oil Corporation (IOC) with a target price of Rs 163.

JPMorgan has turned cautious on the oil marketing companies (OMCs). The firm has downgraded Hindustan Petroleum Corporation Ltd (HPCL) to “underweight” from “overweight” with a target price of Rs 207 largely because HPCL has the highest marketing to refining ratio. The brokerage firm also said that HPCL also has the highest earnings risk.

JPMorgan also downgraded Bharat Petroleum Corporation Ltd (BPCL) to “neutral” from “overweight” with a target price of Rs 423. It also cut its FY23-24e EPS estimates by 15-55 percent.

However, the brokerage firm has an “overweight” rating on Indian Oil Corporation (IOC) stock with a target price of Rs 163 largely because IOC has a large refining portfolio which could offset marketing losses.