BofA-Oil Gas-India Takeaways from meeting with Ministry of Petroleum and Natural Gas-20250929

Oil & Gas PSUs undervalued?

We recently attended an interactive analyst/investor meeting with the Ministry ofPetroleum and Natural Gas (MoPNG). The ministry believes that the O&G PSUs areundervalued despite (i) unparalleled scale; (ii) consistent and profitable growth (9.8%EBITDA CAGR over FY15-25); (iii) a diverse portfolio, with companies valued belowindividual parts. With improving execution and focus on efficiency gains along withpolicy and governance stability, the ministry believes that the O&G PSUs provideinvestors a compelling value proposition.

Companies focusing on cost efficiency, growth…

MoPNG reinforced its expectation that OMCs and upstream PSUs should deliver onefficiency, growth and customer centricity given: (i) targeted EBITDA improvement/costsaving plans launched (Samriddhi by HPCL and Project Sprint by Indian Oil); (ii)consistent investments towards growth, with most companies at the end of their capexcycle (HPCL, IOCL); (iii) future-proofing of the business via expansion in petchem, gasand renewable energy; (iv) improvement in retail experience and service quality andleveraging of digital technology to enhance efficiency.