BPCL and HPCL fall despite strong Q4 nos; brokerages assign mixed ratings

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Shares of Bharat Petroleum (BPCL) plummeted more than 5 percent, while shares of Hindustan Petroleum (HPCL) fell more than 3 percent intraday on May 21 despite the oil refining majors reporting strong Q4 numbers.

BPCL in its BSE release said net profit for the quarter ended March 2019 grew 16.21 percent at Rs 3,124.91, compared to Rs 2,688.97 crore in the corresponding quarter last year.

Revenue soared 10.33 percent to Rs 83,941.67 crore from Rs 76,080.39 crore on a yearly basis.

Meanwhile, HPCL reported a 70 percent jump in its fourth-quarter net profit as inventory gains and rupee appreciation negated a dip in refinery margins.

Net profit in January-March came at Rs 2,970 crore against Rs 1,748 crore in the same period a year back, said HPCL Chairman and Managing Director MK Surana.

Brokerage firm CLSA has a sell rating on both companies, with a target at Rs 300 for BPCL and Rs 210 for HPCL.

According to CLSA, BPCL's core performance has been weak accompanied by lower-than-expected inventory gains. The brokerage said HPCL's refining was in line, but the company missed on marketing.

Deutsche Bank, on the other hand, has a buy rating on both oil refining majors, with target at Rs 465 for BPCL and Rs 335 for HPCL.

The brokerage has a buy rating for BPCL on an estimated 28 percent increase in refining segment EBITDA over FY19-21, while it said that marketing has offset weak refining performance for HPCL.

At 1149 hours, BPCL was quoting at Rs 372.05, down 5.22 percent. HPCL was quoting at Rs 284.75, down 3.01 percent on the BSE.