Loading Now

PSU OMC’s capex spend to grow by 4.5% in FY26

PSU OMC’s capex spend to grow by 4.5% in FY26


The capital expenditure (capex) by State-run oil marketing companies (OMCs), which account for around 90 per cent of the total sales of auto and jet fuels, will grow by 4.5 per cent y-o-y to around ₹69,000 crore in FY26.

PSU OMCs — Indian Oil Corporation (IOCL), Bharat Petroleum Corporation (BPCL), and Hindustan Petroleum Corporation (HPCL) —are cumulatively expected to spend around ₹66,000 crore as capex in the current financial year ending March 2025.

According to the investor calls held by the three CPSUs, India’s largest fuel retailing company, IOCL is expected to spend around ₹35,000 crore as capex in FY26. On the other hand, BPCL and HPCL are likely to pour in ₹18,500-19,000 crore and ₹13,000-15,000 crore, respectively.

In FY25, IOCL’s capex is likely to be in the range of ₹35,000 crore, whereas BPCL and HPCL are projected to spend ₹16,000 crore and ₹13,000-15,000 crore, respectively.

“OMCs’ capex run-rate is likely to remain strong, led by refining (and also petrochemicals) given managements’ expectation of India’s oil demand growing at 4-5 per cent CAGR for the next 10-15 years,” JM Financial said in a recent report.

Budget focus

Analysing the FY26 budget allocation to the three OMCs shows that the government has proposed a higher allocation keeping in view India’s rising energy consumption. These investments are spread over exploration & production (E&P), Refining & Marketing and Petrochemicals.

Under investments in public enterprises, the cumulative budget estimate (BE) for FY26 for the three OMCs is higher by 15.75 per cent at around ₹65,293.85 crore compared to the BE for FY25. The growth is around 6.47 per cent compared to the revised estimate (RE) for FY25.

However, the investment in FY26 is down by 4.47 per cent compared to the actual estimates (AE) for FY24.

For IOCL, the Ministry of Petroleum and Natural Gas (MoPNG) has proposed a BE of ₹35,293.85 crore in FY26, which is higher by 14.14 per cent compared to BE for FY25. However, it is lower by 1.48 per cent against the RE for FY25.

In the case of BPCL, the FY26 BE is higher by 42.31 per cent to ₹18,500 crore compared to both the BE and RE for FY25. However, HPCL’s FY26 BE is lower by 8 per cent compared to the BE and RE for FY25.





Source link

Post Comment