HPCL vs BPCL, IOCL vs ONGC: Which Oil Stock to Pick as $110 Crude Becomes the New Normal, With Experts Favouring Upstream Over OMC Stocks

HPCL vs BPCL, and IOCL vs ONGC, is the debate on Dalal Street as Brent crude hovers near $110 a barrel. On OMC stocks, experts quoted in the media argue investors should avoid oil marketing companies (OMCs) and prefer exploration and production (E&P) companies, but the picture is more nuanced after a quarter in which OMCs returned to profit. This article compares the four stocks, plus Oil India, on valuation, earnings and risks.

Prices and ratios are as of 11:53 AM IST on 2 November 2026. Brent slipped nearly 3% on 2 November to about $110 on easing Middle East tension, according to media reports.

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HPCL vs BPCL vs IOCL vs ONGC: Quick Comparison

Metric	HPCL	BPCL	IOCL	ONGC	Oil India
Price (NSE)	Rs 348.30 (+2.28%)	Rs 291.50 (+2.32%)	Rs 134.44 (+3.30%)	Rs 229.64 (+1.89%)	Rs 460.40 (+1.41%)
Market cap	Rs 72,240 cr	Rs 1.23 lakh cr	Rs 1.84 lakh cr	Rs 2.84 lakh cr	Rs 73,767 cr
P/E ratio	50.30	7.80	3.67	6.35	7.74
P/B ratio	1.37	1.21	0.79	0.76	1.27
Return on equity	2.73%	15.58%	20.25%	11.14%	11.41%
Dividend yield	7.14%	6.06%	6.19%	3.21%	2.54%
Debt to equity	1.40	0.62	0.60	0.47	0.65

Source: NSE and BSE data. HPCL's P/E looks high because its trailing earnings include a heavy first-quarter loss; it is not a sign of an expensive business.

Why $110 Crude Is a Problem for OMCs

OMC stocks buy crude at global prices but retail petrol, diesel and LPG prices are tightly managed. At high crude, brokerages warn, OMCs can face negative petrol and diesel marketing margins, higher LPG under-recoveries and higher freight and landing costs. That is what happened in Q1 FY27: the three companies reported a combined loss of about Rs 18,150 crore (IOCL loss Rs 2,661 crore, BPCL loss Rs 3,962 crore, HPCL loss Rs 11,526 crore). Price hikes in May then repaired margins in Q2.

Q2 FY27: OMCs Back in Profit, but Quality Is Mixed

IOCL, BPCL and HPCL together reported a profit of about Rs 30,106 crore in July to September 2026, according to a report, but about Rs 7,000 crore of IOCL's profit came from a one-off inventory gain. BPCL's profit was reported at about Rs 4,863 to Rs 4,993 crore, 21% to 22.5% lower than a year earlier, with revenue up about 30%. Brokerage estimates had expected petrol margins near Rs 2.9 per litre and diesel near Rs 1.3 per litre in Q2.

The overhang is LPG under-recoveries. Accumulated under-recoveries stood at Rs 67,888.91 crore on 30 September 2026: IOCL Rs 32,505.69 crore, HPCL Rs 18,048.82 crore and BPCL Rs 17,334.40 crore. The Cabinet's Rs 30,000 crore compensation, to be paid in 12 tranches, covers less than half of that. HPCL's chairman estimated the loss at Rs 245 per cylinder in October, rising to Rs 327 in November.

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HPCL vs BPCL: Which OMC Is Better Placed?

In HPCL vs BPCL, brokerages see HPCL as the most vulnerable OMC because only about 51% of its throughput is refined in-house against 74% for BPCL and 80% for IOCL, and its distillate yield is lower at 76% against 85% for BPCL and 80% for IOCL, based on a note from September. Equirus Securities named BPCL its preferred OMC, calling it a contrarian call on a crude correction, since BPCL's better ratio and highest distillate yield give a stronger buffer. HPCL also carries the highest debt to equity of the group at 1.40.

IOCL vs ONGC: Refiner or Producer?

In IOCL vs ONGC, IOCL trades at a P/E of 3.67, below book value (P/B 0.79), with a return on equity of 20.25% and a yield of 6.19%, but its latest profit is boosted by inventory gains and LPG losses are the largest of the three OMCs. ONGC and Oil India are the direct beneficiaries of high crude realisations, and analysts said earlier that this was not fully reflected in valuations. Brent crude at $110 helps upstream, but their risks are policy-related: HSBC has flagged policy risk for ONGC, because windfall levies are a risk, and recent changes to windfall taxes on fuel exports add to the uncertainty.

HPCL vs BPCL vs IOCL vs ONGC: Scenario View

Crude scenario	OMCs (HPCL, BPCL, IOCL)	Upstream (ONGC, Oil India)
Stays near $110	Margin pressure, LPG losses, depends on price hikes and compensation	Higher realisations, but windfall and subsidy-sharing risk
Falls toward $90	Marketing margins improve; inventory losses possible	Realisations fall; stocks usually weaken
Spikes above $120	Losses widen unless prices rise	Gains, with higher policy risk

With OMC stocks and upstream stocks, at $110 crude the choice is a bet on policy as much as on oil. No one scenario is certain, and a diversified approach avoids relying on a single direction of crude.

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Conclusion

HPCL vs BPCL and IOCL vs ONGC come down to crude and policy. At $110 Brent, upstream names look better placed on realisations, while among OMCs, brokerages see BPCL as sturdier than HPCL and IOCL as cheapest but flattered by inventory gains. LPG under-recoveries of Rs 67,889 crore and capped retail prices keep OMC earnings fragile.

Frequently Asked Questions on HPCL vs BPCL vs IOCL vs ONGC

Why are experts avoiding OMC stocks at $110 crude?

Ans. At $110 crude, OMCs can face negative petrol and diesel marketing margins, higher LPG under-recoveries and higher freight costs because retail prices are managed. Q1 FY27 produced a combined loss of about Rs 18,150 crore. Experts therefore prefer upstream companies such as ONGC and Oil India, which gain from higher crude realisations.

Which is better, HPCL or BPCL?

Ans. Brokerages see BPCL as better placed than HPCL: BPCL refines about 74% of its throughput against HPCL's 51% and has a higher distillate yield of 85% against 76%. HPCL also has higher debt to equity at 1.40. Equirus named BPCL its preferred OMC. Both remain exposed to marketing margins and LPG losses.

Is IOCL a good buy at a P/E of 3.67?

Ans. IOCL looks cheap at a P/E of 3.67 and a P/B of 0.79, with a return on equity of 20.25% and a yield of 6.19%. But about Rs 7,000 crore of its Q2 profit was an inventory gain and it has the largest LPG under-recoveries at Rs 32,505.69 crore, so the low P/E reflects risk.

Will ONGC and Oil India benefit from high crude?

Ans. Yes, higher crude raises realisations for upstream producers, and analysts have said this is not fully reflected in their valuations. ONGC trades at a P/E of 6.35 and P/B of 0.76, and Oil India at 7.74 and 1.27. The main risk is policy, such as windfall levies or subsidy-sharing requirements.

What are LPG under-recoveries and why do they matter?

Ans. LPG under-recoveries are losses OMCs make by selling domestic LPG below cost. Accumulated amounts reached Rs 67,888.91 crore on 30 September 2026, split among IOCL, HPCL and BPCL. Government compensation of Rs 30,000 crore, paid in 12 tranches, covers less than half, so the unpaid balance weighs on earnings and cash.

How did OMCs perform in Q2 FY27?

Ans. They returned to profit after Q1 losses: a report put the combined profit of IOCL, BPCL and HPCL at about Rs 30,106 crore, helped by price hikes in May and about Rs 7,000 crore of inventory gains at IOCL. BPCL's profit was about 21% to 22.5% below a year earlier. Quality of earnings is mixed.

What happens to these stocks if crude falls?

Ans. If crude falls toward $90, OMC marketing margins typically improve and their stocks tend to rise, as seen when OMCs gained up to 5% while upstream stocks fell about 2% in June 2026 when Brent dipped below $90. Upstream stocks usually weaken. Inventory losses can offset the benefit at OMCs in the short term.

Which oil stock should I buy at $110 crude?

Ans. There is no single answer. Upstream stocks benefit most from high crude but carry policy risk, BPCL is considered the strongest OMC, and IOCL is cheapest but has the largest LPG losses. Consider your risk limits and diversify. This is not investment advice, so consult a SEBI-registered advisor.