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This Oil Stock has Potential to Grow 37 per cent in a Year. Know Details

By: Aparna Deb

Last Updated: February 04, 2022, 17:08 IST

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Fuel prices May 22: Check petrol, diesel rates in your city today.

Ekmay Global Financial Services Ltd. has 'add' call on Bharat Petroleum Corporation. Know details

Ekmay Global Financial Services Ltd. has ‘add’ call on Bharat Petroleum Corporation with a target price of Rs 515. The current market price of Bharat Petroleum Corporation Ltd. is Rs 376.30. In its research report, the brokerage said that in a time frame of one year Bharat Petroleum Corporation Ltd. price can reach defined target. Bharat Petroleum Corporation Ltd., incorporated in the year 1952, is a large cap company (having a market cap of Rs 86,433.88 Crore) operating in gas & petroleum sector. Bharat Petroleum Corporation Ltd. key products/revenue segments include petroleum products, oil crude, other operating revenue, subsidy for the year ending March 31, 2021.

BPCL Financials

For the quarter ended 31-12-2021, the Bharat Petroleum Corporation Ltd. reported a consolidated total income of Rs 95,914.55 crore, down -6.51 per cent from last quarter total income of Rs 1,02,596.50 crore and up 43.56 per cent from last year same quarter total income of Rs 66,809.47 crore. Company reported net profit after tax of Rs 2,354.28 crore in latest quarter.

“Q3FY22 saw BPCL clocking highest growth among OMCs in petrol/diesel sales. The market share improved to 29 per cent. Demand is steady despite Omicron impact. It has 27 per cent market share in LPG, while ATF sales grew by 33 per cent (international flights are still down). Diesel/petrol cracks rose to USD12.6/12.8 per barrel in Q3, supporting GRMs (lower China exports, winter demand, and lower global inventories)," the brokerage said in its report.

BPCL Investment Rationale

The ‘add’ rating on Bharat Petroleum (BPCL) with a target price of Rs 515 is premised on the following things.

  • BPCL posted Q3FY22 standalone EBITDA/PAT of Rs42.5bn/Rs24.6bn, down 5 per cent/9 per cent QoQ. EBITDA missed our estimate by 27 per cent due to lower marketing income, which was affected by a one-time inventory loss arising from a cut in auto-fuel excise duty in Nov’21.
  • Reported GRM of USD 9.7/bbl was better than our USD 7.5 est. Refinery utilization was healthy at 116 per cent. Total marketing volumes beat by 6 per cent, with domestic sales flat YoY vs. 4 per cent decline for the industry. BPCL fared the best in marketing and auto-fuel sales in Q3.

BPCL Valuation

“We value BPCL on a SOTP basis at 6.3x blended March’24E EV/EBITDA, BORL at 5x and investments with a 30 per cent holdco discount. Key risks are adverse petroleum prices/margins/currency, project delays and disinvestment uncertainties," the note said.

According to latest reports, the privatisation of the oil refiner Bharat Petroleum Corporation Limited may have been pushed back to the next fiscal year as no bidder visited the firm’s premises in the last quarter, a senior company official said on Wednesday.  The government is selling its entire 52.98 per cent stake in BPCL for which three expressions of interest (EoIs), including one from billionaire Anil Agarwal-led Vedanta Group, have been received.

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    first published:February 04, 2022, 17:06 IST
    last updated:February 04, 2022, 17:08 IST