Buy HPCL; target of Rs 427: Motilal Oswal

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26 Aug, 2025 12:21

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Motilal Oswal's research report on HPCL
The Department of Investment and Public Asset Management (DIPAM) has invited bids for appointing an advisor for strategic sale of the government’s 51.11% stake in HPCL to ONGC. The bid document mentions the following methodologies for achieving the best valuation for HPCL: discounted cash flow, relative valuation, asset -based valuation, and market valuation. We study the four possibilities to estimate what the reserve price could be. We also take a look at the possibility of a control premium.

Outlook

However, with expected premium valuation for sale to ONGC, it has appreciated. Using the last 60 days’ average, the valuation of the company stands at INR 356/ share.

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