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Last Updated : Jun 14, 2018 03:46 PM IST | Source: Moneycontrol.com

Buy Bharat Petroleum Corporation; target of Rs 490: KR Choksey

KR Choksey is bullish on Bharat Petroleum Corporation has recommended buy rating on the stock with a target price of Rs 490 in its research report dated June 05, 2018.

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KR Choksey's research report on Bharat Petroleum Corporation


Revenues came in at INR 652.3 bn (+14.4% YoY, +7.6% QoQ) on account of higher throughput resulting into market sales. Throughput increased by 30.4% YoY to 7.85 MMT for Q4FY18 ( 6.02 MMT in Q4FY17). Market sales stood at 10.37 MMT as against 9.26 MMT in Q4FY17, up 15.8% YoY. Gross Margin for the quarter improved by 138 bps YoY to 12.9% on account of improved marketing margins as well as better inventory management. As for the refining segment, GRM for the quarter stood at $6.51/bbl as against $6.01/bbl in Q4FY17. Operational performance for the quarter improved due to lower employee expenses (-33.4% YoY) leading to an OPM of 5.7% (+139 bps YoY, +48 bps QoQ). EBITDA came in at INR 37.4 bn (+51% YoY, +17.5% QoQ). Despite higher tax expense for the quarter (25.6% v/s 16.4% in Q4FY17), PAT stood at INR 26.7 bn (+45.2% YoY, 24.7% QoQ) on account of lower forex losses of INR 257 mn as against losses of INR 2,694 mn (-90.4% YoY) in Q4FY17. PAT margin stood at 4.1% (+87 bps YoY, +56 bps QoQ). The board has recommended a final dividend of INR 7 per share.


Outlook


We valued the company by assigning a multiple of 7.5x on the FY19E EBITDA/share of INR 85.0 and arrived at a target price of INR 490 (potential upside – 20.3%). We maintain BUY rating on the stock.


For all recommendations report, click here


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First Published on Jun 14, 2018 03:46 pm
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