Upcoming Webinar :Register now for 'ULIP as an investment during economic recovery' powered by Bajaj Allianz

Buy Hindustan Petroleum Corporation: Target Of Rs 260: Sharekhan

Sharekhan is bullish on Hindustan Petroleum Corporation recommended buy rating on the stock with a target price of Rs 260 in its research report dated November 05, 2020.

Nov 11, 2020 / 11:37 AM IST
 
 
live
  • bselive
  • nselive
Volume
Todays L/H
More

Sharekhan's research repor on Hindustan Petroleum Corporation


Q2FY21 PAT at Rs. 2,477 crore (up 2.4x y-o-y) substantially beat street estimates led by large inventory gains of Rs. 1,780 crore and beat in core GRM at $2.7/bbl. However, earnings missed our estimate due to lower marketing margins. HPCL outperformed peers with strong core GRM of $2.7/bbl vs. $1.5/bbl for BPCL and negative $1/bbl for IOCL; refinery utilization of 103% (vs. 79.5%/82% for IOCL/BPCL). Board approved share buyback not exceeding Rs. 2,500 crore at maximum buyback price of Rs. 250/share (34% premium to closing price of Rs. 187 on November 04, 2020) from open market. Buyback and healthy dividend yield of ~8% to support stock prices.


Outlook


HPCL would report highest earnings growth among OMCs (expect PAT CAGR of 38% over FY20-FY23E versus 20% for IOCL and BPCL). Moreover, valuation is attractive at 0.8x/5.1 FY23E PBV/PE. Hence, we recommend a Buy on HPCL with PT of Rs 260.


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.

Broker Research
first published: Nov 11, 2020 11:37 am

stay updated

Get Daily News on your Browser
Sections