Hold Bharat Petroleum Corporation; target of Rs 286: Prabhudas Lilladher

Prabhudas Lilladher's research report on Bharat Petroleum Corporation

Bharat Petroleum Corporation (BPCL) reported lower-than-expected Q3FY25 results with EBITDA of Rs75.8bn (up 68% QoQ, PLe: Rs83bn, BBGe: Rs80bn). PAT came in at Rs46.5bn (up 94% QoQ, PLe: Rs48.6bn, BBGe: Rs52.6bn). GRM stood at US$5.6/bbl. GMM as per our calculation came in at Rs7.4/ltr. The company declared an interim dividend of Rs5/share. Average Singapore GRM in Q4-TD is ~US$3/bbl, while GMM on petrol/diesel has moderated to Rs10.9/6.6/ltr. Thus, near-term weakness is likely to persist on both the refining and marketing front.

Outlook

We expect GRM to bounce back to the long-term average of US$5-7/bbl in FY26/27 and build in a GRM of US$5.7/6/6/bbl for FY25/26/27E. On the marketing front, we estimate a GMM of Rs5.2/4.1/4.1/ltr for FY25/26/27E. The stock is currently trading at 1.3/1.2x of FY26/27 P/BV. We maintain HOLD rating with a TP of Rs286 based on 1.3x FY27 P/BV.

For all recommendations report, click here