Crude oil prices are showing no signs of letting off. After the biggest weekly gain on record for US crude last week, prices are up by nearly 30% on Monday, nearing the mark of $120 per barrel. The oil prices rising are a major negative for Indian markets, considering its net importer status. Here’s how companies in India get impacted due to the higher oil prices:
3 Min Read
1 / 6Crude oil prices are showing no signs of letting off. After the biggest weekly gain on record for US crude last week, prices are up by nearly 30% on Monday, nearing the mark of $120 per barrel. The oil prices rising are a major negative for Indian markets, considering its net importer status. Here’s how companies in India get impacted due to the higher oil prices:
2 / 6ONGC & Oil India | Rising oil prices are a positive for upstream companies like ONGC and Oil India as a rise in prices by $1 dollar can benefit the annual revenue of these companies by ₹300 crore to ₹400 crore.
3 / 6OMCs Like HPCL and Peers | HPCL, BPCL and Indian Oil are negatively impacted by the rise in oil prices. An increase in raw material costs pressures the companies’ margins and also impact their operating performance. Government sources have also told CNBC-TV18 that pump prices will not go up despite the rise in prices.
4 / 6Paint Stocks | The rising oil prices is also a negative for Paint Companies as crude is a key input material used in their operations. HSBC wrote in its note that cost inflation is back for paint companies after nearly four years and price hikes could lead to a narrowing of value-volume gap. However, market and competitive structures are different, as per HSBC’s note. Asian Paints and Berger Paints saw price targets being cut by HSBC with a “neutral” stance.
5 / 6Aviation Stocks | Airline stocks such as InterGlobe Aviation are not only facing pressure from the West Asia conflict due to a disruption in flight schedules, they also have to grapple with rising oil prices, which will increase their costs, and a weak rupee, which will add to the pressures. HSBC wrote in a note earlier this month that apart from any direct losses due to cancellations, any spike in oil prices can impact the profitability of these companies.
6 / 6Tyre Stocks | The war in West Asia has already increased the raw material component costs by 15% to 20%, according to a CLSA note. Crude forms 45% of the raw material basket and that, along with rising natural rubber prices and a weak rupee will further impact the gross margins and profitability of tyre companies such as Apollo Tyres, MRF and JK Tyres, along with their peers. “With tyre companies either initiating capex cycles in FY27 or focusing on post‑acquisition deleveraging, this margin compression is likely to pressure FCF generation, capital structure, and near‑term valuation multiples,” the CLSA note said.
