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OMC shares outlook: Shares of oil and marketing companies (OMCs) are in focus in Thursday's session after the centre has agreed to pay LPG subsidy losses. As of writing the copy, shares of Indian Oil Corporation traded with gains of 1 per cent at Rs 152.2, while HPCL traded with a cut of 0.7 per cent at Rs 441.8 per share.

Meanwhile, BPCL shares also traded higher with 0.19 per cent at Rs 349.3 per share.

The government today announced the ministry has given in-principle nod for compensating state-run oil marketing companies for losses incurred on the subsidised sale of LPG cylinders, according to people familiar with the matter.

Further as per reports, the government is working on compensation mechanism on subsidised sale of LPG for the cylinders.

Vaibhav Vidwani, Research Analyst at Bonanza said, "The government’s confirmation to compensate state-run Oil Marketing Companies (OMCs) for under-recoveries on subsidized LPG sales marks a significant positive catalyst for the sector. This move reduce margin pressures that have weighed on IOC, BPCL and HPCL amid volatile crude prices and price caps, thereby enhancing earnings visibility and financial stability."

He added that Indian Oil Corporation benefits from OPEC+’s recent decision to increase oil production by 548,000 barrels per day in August, which could help stabilize crude prices and support margins. IOC aims to reach net-zero emissions by 2046 through renewable energy adoption and efficiency improvements, targeting 200 gigawatts of renewable capacity by 2050 and becoming a $1 trillion company by 2047.

Bharat Petroleum is well-positioned with a balanced portfolio and strong refining capabilities, offering attractive growth potential over the next few years.

Hindustan Petroleum, while more sensitive to margin swings, also stands to gain from improving market conditions and government support. Overall, the LPG compensation and India’s long-term energy vision provide a strong foundation for OMC stocks.

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