Earnings of OMCs seen weak as Q1FY27 under-recoveries bite: Report

Brokerage PL Capital expects weak Q1FY27 earnings for OMCs, projecting under-recoveries of Rs7.0/litre on petrol and Rs10/litre on diesel even after a Rs10/litre excise cut, with LPG losses estimated at around Rs500/cylinder. LPG under-recoveries had surged to Rs610-670/cylinder in May 2026 from about Rs170/cylinder in April 2026, and Saudi CP prices are expected to rise 47 per cent QoQ in Q1FY27. While near-term sentiment improved after Brent crude fell below USD80/bbl on the US-Iran ceasefire, volatility, inventory rebuilding, and the risk of phased rollback of the Rs10/litre excise duty remain key overhangs for OMC profitability.