Buy Bharat Petroleum Corporation; target of Rs 505: Prabhudas Lilladher
Prabhudas Lilladher is bullish on Bharat Petroleum Corporation has recommended buy rating on the stock with a target price of Rs 505 in its research report dated March 02, 2021.
March 02, 2021 / 04:50 PM IST
Prabhudas Lilladher's research report on Bharat Petroleum Corporation
BPCL board approved the sale of 61.65% stake in Numaligarh Refinery (NRL) to a consortium of Oil India, Engineers India and Government of Assam for an EV of Rs160bn. The transaction values NRL at P/E of 8x/10x and EV/E of 5x/8x FY19/20 respectively. The transaction is likely to be closed within a month of getting all the approvals. This is in line with BPCL management commentary to close the transaction by Q4FY21 end. Proposed stake sale is a precursor to eventual divestment of BPCL, which will likely conclude by H1FY22E.
Reiterate BUY as BPCL remains a prized asset given its footprint across energy value chain. We value BPCL at PER 9X FY22 and add value of investment and E&P.
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