Bharat Petroleum (BPCL.BO): 2QFY27: Resilient Performance

Citi's take on BPCL's 2QFY27: EBITDA improved qoq from -Rs41bn to Rs90bn, broadly in line with our Rs93bn expectation. Refining margins moderated sequentially after a solid 1Q and were slightly below expectations, and opex was higher than expected, largely offset by narrower marketing inventory losses and slightly better marketing profitability. Reported GRM moderated from $41/bbl in 1Q to $33/bbl in 2Q versus our $37/bbl estimate, possibly due to inventory losses (1Q closing inventory valued at c.$95/bbl, higher than peers); HPCL's GRM improved from $24/bbl to $32/bbl, and on a 1H basis BPCL averaged $37/bbl vs $28/bbl for HPCL. Marketing profitability improved on the full-quarter impact of 1QFY27 fuel price hikes and LPG under-recoveries narrowing from Rs54bn to Rs34bn;