Hold BPCL; target of Rs 799: R K Global

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26 Aug, 2025 12:21

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R K Global has recommended hold rating on Bharat Petroleum Corporation (BPCL) with a target of Rs 799, in its May 28, 2012 research report.

“Higher upstream discounts and budgetary support saved the day. Bharat Petroleum Corporation Limited (BPCL) reported three fold growth in net profit of Rs39628.3mn on a 42.9% Y-o-Y growth in net revenue of Rs646421.8mn during Q4FY12. On annual basis, company reported 15% decline in net profit on 39.8% growth in its net revenue.”

“During the quarter, BPCL reported net revenue of Rs646421.8mn (R K Global est. Rs605699mn, Var.: +6.7%) as compared to Rs452515.1mn in Q4FY11, registering 42.9% Y-o-Y growth (5.2% growth on sequential basis). On annual basis, company reported 39.8% Y-o-Y growth in net revenue to Rs2118662.2mn (R K Global est. Rs2111316mn, Var.: 0.35%). The revenue growth is attributed to budgetary support of Rs91532.3mn (Rs196713.9mn for FY12 as against Rs94188.8mn for FY11) provided by the government this quarter. Market sales improved 2.4% Y-o-Y to 8.23mmt while export sales moderated 6.3% Y-o-Y to 0.89mmt during Q4FY12. Crude throughput contracted -2.1% Y-o-Y to 6mmt during Q4FY12 against 6.13mmt during Q4FY11. Per unit average realization also improved on account of higher budgetary support.”

“BPCL reported 152.9% Y-o-Y growth in its operating profit of Rs54952.8mn for Q4FY12, while for full year, company reported 7.8% Y-o-Y growth in its operating profit of Rs55686mn during FY12 on account of higher discounts from upstream companies. Upstream oil companies have provided subsidy discounts of Rs43336.5mn (Rs128572.0mn for FY12 as against Rs69600.4mn in FY11) this quarter as against Rs34185mn in Q4FY11. This led OPM to expand 370bps to 8.5% as cost of raw material consumed as a percent of total income fell 1.2% Y-o-Y to 36.3% and purchase of products for resale fell 0.7% to 52.1% while employee cost and O&M expense declined by 1.6% and 2.2% respectively. However, average GRM during FY12 declined 29.3% Y-o-Y to $3.16/bbl during as against $4.47/bbl during corresponding period last year.”

“At CMP, the stock is trading at P/E and EV/Core EBITDA of 14.2x and 11.8x respectively of FY13E EPS of Rs51.0 and Core EBITDA of Rs39345mn respectively. At our target price of Rs799, the stock offers an upside potential of 9.3% from current level. We reiterate our “hold” recommendation on the stock with an upside potential,” says R K Global research report.   

Shares held by Mutual Funds/UTI

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