Archive · 6 Oct 2026
Morgan Stanley Sees Three-Year Upswing for Indian Refiners
Morgan Stanley thinks Indian fuel companies may have a few strong years ahead.
It expects the money they make from refining fuel to improve.
It also says the amount of fuel stored around the world is low and demand is holding up.
India is adding refining capacity in 2026–27, with much of the new output expected to be diesel and jet fuel.
The bank thinks those products are in especially tight supply.
It sees a possible three-year period of stronger refining conditions.
Morgan Stanley prefers Hindustan Petroleum and Bharat Petroleum, and also rates Indian Oil positively.
But government limits on fuel prices, lost customers or project delays could hurt the companies.
Morgan Stanley expects a supportive earnings environment for Indian fuel retailers as refining and marketing margins improve.
The bank forecasts a three-year refining upcycle, citing tight global fuel inventories, resilient demand and limited capacity additions.
It says nearly half of incremental Indian refining output in 2026–27 is expected to be diesel and jet fuel.
Morgan Stanley prefers Hindustan Petroleum and Bharat Petroleum, while also rating Indian Oil Overweight.
The brokerage identifies risks including government fuel-price controls, market-share losses and delays to refinery projects.
- Who
- Morgan Stanley and Indian fuel retailers, including Bharat Petroleum, Hindustan Petroleum and Indian Oil.
- What
- Morgan Stanley forecasts a supportive earnings environment and a three-year refining upcycle for Indian refiners.
- When
- The outlook covers an expected three-year upcycle and refers to refining capacity additions in 2026–27.
- Where
- India, within the global fuel and refining market.
- Why
- The bank cites improving refining and marketing margins, tight global fuel inventories, resilient demand and a product mix weighted toward diesel and jet fuel.
- Forecast upcycle
- Morgan Stanley sees a three-year runway for the refining upcycle.
- Inventory outlook
- The report says global fuel inventories are near their 2022 lows.
- Capacity additions
- India is expected to add significant refining capacity in 2026–27.
- New output mix
- Nearly half of incremental output is expected to be weighted toward diesel and jet fuel.
- Preferred stocks
- Morgan Stanley prefers Hindustan Petroleum and Bharat Petroleum.
- Coverage ratings
- The report lists Bharat Petroleum, Hindustan Petroleum and Indian Oil as Overweight.
- Reported price changes
- The article says private fuel retailers raised fuel prices by 4–5% during the week covered by the update.