Accumulate Hindustan Petroleum Corporation; target of Rs 457: Prabhudas Lilladher

Accumulate

Prabhudas Lilladher's research report on Hindustan Petroleum Corporation

We upgrade the stock to ‘Accumulate’ on improving operational efficiency and completion of major projects, leading to an improvement in return ratios. Refining throughput increased 5.8% YoY to 6.4mmt and reported GRM stood at USD8.9/bbl, both in line with our estimates. Marketing volumes improved 10.5% QoQ/3.7% YoY to 13.3mmt (PLe: 13.4mmt) with an implied GMM of Rs5.4/lit (PLe: Rs5.5/lit). EBITDA (incl. forex loss of Rs2.4bn) improved 1.9% QoQ/17.6% YoY to Rs70.2bn (PLe: Rs72.9bn, BBGe: Rs75.2bn). Improved performance in 9MFY26 led to 99.1%/206.1% YoY growth in EBITDA/PAT. HPCL has commissioned its Vizag refinery and expects it to commence commercial operations in Q1FY27. As per Mgmt, opex-to-turnover ratio declined YoY in 9MFY26. We build in a GRM of USD7.2/7.3/bbl for FY27E/28E. On the marketing front, we estimate GMM at Rs5.6/4.8/lit for FY27E/FY28E.

Outlook

We value the company at 1.2x of Dec’27E PBV (previous: 1.3x at FY27/28E) and upgrade the rating to ‘Accumulate’ from ‘HOLD’ arriving at a TP of Rs457 (previous: Rs501).

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.

Hindustan Petroleum Corporation - 2301026 -prabhu