The oil and gas (O&G) sector, which houses some of the biggest companies of Dalal Street, is expected to report a strong operational performance in the third quarter of the financial year 2025-26 (Q3 FY26), led by oil market companies and Reliance Industries.
Nuvama Institutional Equities, in a note, said that it forecasts O&G’s Q3FY26E aggregate EBITDA to jump 17% YoY, led by OMCs/RIL/CGDs, partially offset by ONGC and gas utilities. At the same time, Prabhudas Lilladher (PL) Capital sees O&G’s Q3 EBITDA growing by over 13% YoY.
OMCs expected to lead
Oil refining and marketing companies are expected to post a strong show in Q3, as average oil prices declined by 10% YoY, while retail sales were unchanged.
“Due to elevated product cracks, refining margins will be sharply higher and implied marketing earnings weaker. Reported numbers will also get a boost from LPG compensation of ~ 50 billion,” estimated Kotak Institutional Equities.
Singapore GRM improved to $4.9/bbl in Q3FY26 from $4/bbl in Q2FY26, driven by sustained strength in transportation fuel cracks.
Nuvama said that EBITDA for OMCs could surge 68% YoY, led by strong GRMs and lower LPG under-recoveries. Meanwhile, KIE expects EBITDA to rise 9-18% sequentially (31-141% YoY), with volatility remaining high.
PL Capital said that while marketing margins for OMCs are expected to remain under pressure, the strength in refining margins supports earnings visibility. It upgraded FY27 EPS estimates for OMCs by 5–6%.
RIL
Led by strong oil-to-chemicals and digital growth, brokerages also see Reliance Industries posting strong growth in Q3. “We estimate 9% YoY rise in RIL’s consolidated EBITDA on a strong O2C and digital showing, partially offset by muted Retail growth and O&G weakness,” said Nuvama.
It added that O2C EBITDA is likely to jump 13% YoY on 21% YoY growth in Singapore GRM led by petrol/diesel spreads. KIE also estimates a 9.3% YoY jump in overall EBITDA with O2C EBITDA rising 15% YoY on better refining and weaker INR, partially offset by weak petchem.
Upstream oil companies
In contrast, upstream companies are expected to face earnings pressure, as the decline in crude oil prices is likely to weigh on realizations.
ONGC and Oil India are expected to report a QoQ decline in EBITDA to Rs 17,460 crore, down 8.2% QoQ, according to PL Capital. Kotak has pegged ONGC’s EBITDA decline at 10% YoY and Oil India’s at 2.7% YoY.
Gas companies
A mixed show is expected from gas companies, with gas utilities expected to report weak numbers, while a low base could support Indraprastha Gas Limited (IGL).
IGL and GGL’s EBITDA per scm is expected to rise 7% YoY to 4.6 and 4.7, supported by lower operating expenses and softer spot LNG prices, said Nuvama. Additionally, benefit from lower Gujarat VAT and a low base will likely prop up IGL’s numbers, said KIE. In contrast, MGL’s EBITDA per scm is likely to remain flat at 8.3 due to higher operating costs, as per Nuvama.
For GAIL, Nuvama sees an EBITDA decline of 7% YoY due to weak petrochemical margins and lower LPG realisations. Petronet LNG’s EBITDA is likely to remain flat, as modest volume growth is offset by higher operating expenses, it added.
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