StocksMarket.in

Hold Bharat Petroleum Corporation; target of Rs 375: ICICI Direct

June 26
01:25 2019

ICICI Direct’s research report on Bharat Petroleum Corporation

Bharat Petroleum Corporation (BPCL) reported Q4FY19 results that were above our estimates on the profitability front on account of better-than-expected performance in the marketing segment. However, reported GRMs disappointed and were at US$ 2.7/bbl below our estimate of US$ 5.2/bbl during the quarter on a weak operational performance. Core GRMs were at US$ 2.5/bbl in Q4FY19. Revenues declined 4.9% QoQ to Rs 83941.7 crore on account of lower average oil prices. On account of healthy numbers from marketing segment, EBITDA increased to Rs 4805 crore above our estimates of Rs 4225.2 crore. On the profitability front, reported PAT was at Rs 3124.9 crore above our estimate of Rs 2496.5 crore.

Outlook

We are neutral on BPCL at the current juncture given the volatility in oil prices and new government’s intent to pass on costs to consumers during high oil prices. BPCL’s ability to maintain normal marketing margins and trend in refining margins will determine its near term performance. We have a HOLD recommendation on the stock with a target price of Rs 375 (based on average of P/BV multiple: Rs 289/share and P/E multiple: Rs 360/share).

For all recommendations report, click here

Disclaimer: The views and investment tips expressed by investment experts/broking houses/rating agencies on moneycontrol.com are their own, and not that of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.

Subscribe to Moneycontrol Pro and gain access to curated markets data, exclusive trading recommendations, independent equity analysis, actionable investment ideas, nuanced takes on macro, corporate and policy actions, practical insights from market gurus and much more.

Related Articles

Archives