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Last Updated : Nov 12, 2019 12:35 PM IST | Source: Moneycontrol.com

Hold Bharat Petroleum Corporation; target of Rs 515: ICICI Direct

ICICI Direct recommended hold rating on Bharat Petroleum Corporation with a target price of Rs 515 in its research report dated November 08, 2019.

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ICICI Direct's research report on Bharat Petroleum Corporation


Bharat Petroleum Corporation (BPCL) reported Q2FY20 results that were below our estimates on the profitability front mainly on account of weak performance in refining. Although the refining segment profitability disappointed due to a weak operational performance as well as inventory losses, the marketing segment performance remained stable. The reported GRMs disappointed and were at US$3.4/bbl (our estimate: US$6/bbl). Subsequently, EBITDA came in at Rs 2374.9 crore, below our estimate of Rs 3358.7 crore. PAT during the quarter was at Rs 1708.5 crore, below our estimate of Rs 1922.3 crore. However, on a QoQ basis, PAT increased 58.9% as Q2FY20 had net tax reversal whereas Q1FY20 tax rate was at 20.5%.


Outlook


We are neutral on BPCL at the current juncture given the sharp run-up in stock price and volatility in global GRMs. We have a HOLD rating on the stock with a target price of Rs 515. (based on average of P/BV multiple: Rs 532/share, P/E multiple: Rs 499/share).

For all recommendations report, click here

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First Published on Nov 12, 2019 12:35 pm
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