BPCL, HPCL, IOC rally may run out of steam

MUMBAI: The rally in Indian OilNSE -0.23 % Corporation (IOCNSE -1.19 %), Bharat Petroleum Corporation (BPCLNSE -1.67 %) and Hindustan Petroleum Corporation (HPCLNSE -2.49 %), which are among the world’s most expensive refiners, is likely to be limited going ahead, said foreign brokerage CLSA.

IOC, BPCL and HPCL have rallied 19-25 per cent in the past one month on hopes of a stable government after elections and potential of a strong fourth quarter result, thanks to record marketing margins.

The brokerage said expensive valuation, normalisation of marketing margins and refining capacity would limit upside in these stocks.