IndiaInfoline has maintained its buy rating on Chennai Petroleum Corporation with a target price of Rs 459 in its May 16, 2008. "CPCL reported a GRM of USD 9.6 per barrel in Q4 FY08 as against USD 6.4 per barrel in Q4 FY07, as increase in product prices outpaced rise in crude oil prices. Over the last one year the company has improved its distillate yield by about 150bps and has also increased intake of sour crude by about 100bps. These initiatives have been a key factor in strong GRM trends for the company."

"CPCL is significantly undervalued compared to global as well as regional peers. It is trading at 5.4x FY09E earnings of Rs 64.6 and 3.5x EV/EBIDTA. We believe with increase in complexity of refinery over the next one year through debottlenecking should help CPCL maintain its GRMs above its long term average even if global GRMs head for a sharp fall. We maintain BUY on the stock with a target price of Rs 459," an upside of 31%," says IndiaInfoline's research report.

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