Reliance may take 4% hit on earnings if India shifts away from Russian oil, Morgan Stanley says

Morgan Stanley says if India shifts from Russian crude after U.S. sanctions, Reliance RELI.NS earnings could fall about 4% in FY27

Brokerage notes that, a large part of the impact for Reliance would be cushioned by higher product margins on diesel, gasoline and higher refinery utilization rates, as global refining infrastructure remains very tight

Overall impact on earnings for Indian refiners and consumer cos should be about 5-12% - MS

While lower crude discounts will have negative impact on margins, state-owned fuel retailers like HPCL HPCL.NS can source on discount from private refiners

Global refining margins likely to stay elevated through 2027 on underinvestment and capacity delays; lower Russian fuel exports could tighten supply further, benefitting Indian refiners

YTD, RELI up ~19%, HPCL up ~7%; IOC IOC.NS and BPCL BPCL.NS up ~10% and ~13% respectively