Brent crude could remain elevated at around $80 a barrel over the next 12 months, even as oil supply recovers, according to analysts at JM Financial. The brokerage expects the higher crude-price environment to favour upstream producers Oil India and ONGC, while retaining a ' Reduce' rating on oil marketing companies (OMCs) on valuation and earnings concerns.

JM Financial analysts Dayan and Mittal, Shivam Gupta and Anupam Jakhotia have retained a Buy rating on both Oil India and ONGC, with target prices of Rs 560 and Rs 300, respectively. The analysts, meanwhile, have reaffirmed their ' Reduce' ratings on HPCL, BPCL and IOCL, with target prices of Rs 375, Rs 290 and Rs 135, respectively.

Why JM Financial prefers Oil India and ONGCJM Financial said Oil India offers a 15-20% EPS compounding story over the next three to five years and said it prefers the stock. The brokerage cited the expansion of Oil India’s NRL refinery capacity from 3 million tonnes per annum to 9 million tonnes per annum by the end of FY27E and the expected gradual ramp-up to 100% utilisation over two to three years.

45 million tonnes in FY26. 2 billion cubic metres in FY26, along with the ramp-up of NRL’s expanded capacity.

Gas output could subsequently rise to 5 billion cubic metres once evacuation pipeline facilities are in place, JM Financial said. The brokerage also expects a possible reversal of the excise cut on auto fuel, which could restore an excise benefit of around $16 a barrel for the NRL refinery..

5 per litre. 5 per litre below the historical average of Rs 8 per litre.

5 per litre. 5 per litre fuel price hike."

We have a Reduce on HPCL/BPCL/IOCL (TP: Rs 375/290/135) as i) valuation is significantly above trough valuation and, hence, not favourable on risk-reward basis; ii) we expect OMCs to face delays in recovery of under-recoveries (including LPG) during Mar-Jun’26; iii) crude price is likely to remain elevated ~USD 80/bbl in the next 12 months due to huge restocking demand; and iv) structural concerns around their aggressive capex plans in the refining and petchem business," said the brokerage. HPCL sees sharpest book-value erosionJM Financial noted that large marketing losses in Q1FY27 resulted in a 19% decline in HPCL’s consolidated book value to Rs 250 per share at the end of Q1FY27, from Rs 308 at the end of FY26.

By comparison, IOCL and BPCL saw book-value erosion of 1% and 2%, respectively. IOCL’s book value stood at Rs 154 per share at the end of Q1FY27, compared with Rs 155 at the end of FY26, while BPCL’s stood at Rs 230 per share, against Rs 234 at the end of FY26.