Hindustan Petroleum’s transformation, which was delayed due to geopolitical issues in 2022, is now back on track, the brokerage said in a Nov. 8 note. The oil marketer will have full integration by 2026. The company is becoming more integrated into fuel production and marketing and will see its dependence on external oil product purchases fall by nearly half by the end of FY25 and to almost zero in 2026, it said.
The brokerage expects Hindustan Petroleum’s relative underperformance of earnings and multiples to BPCL and IOCL to reverse as integration increased. Full integration has helped other major oil marketing companies navigate volatile energy markets better, according to Morgan Stanley.