HDFC Securities is bullish on Hindustan Petroleum Corporation has recommended buy rating on the stock with a target price of Rs 463 in its research report dated 08 Aug 2018.
HDFC Securities' research report on Hindustan Petroleum Corporation
HPCL’s 1QFY19 EBITDA came in at Rs 31.91bn, up 96% YoY owing to 22% increase in GRM to USD 7.15/bbl (including inventory gains of USD 3.47/bbl). Marketing volumes were up 5% YoY while gross marketing margins were down 9.4% YoY to Rs 3.61/ltr. PAT stood at Rs 17.19bn up 86% YoY on lower other income at Rs 3.06bn (-46.4% YoY) and higher interest cost at Rs 1.91/bn (+33.5% YoY).
We believe, with recent corrections most negatives seem to be priced in and valuations are compelling. Our SOTP target is Rs 463 (5x Jun 20E EV/e for standalone refining, 8x EV/e for marketing, 9x for pipeline and Rs 159/sh from other investments). Maintain BUY.
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