ICICI Direct recommended hold rating on Bharat Petroleum Corporation with a target price of Rs 515 in its research report dated November 08, 2019.
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%.
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
Disclaimer: The views and investment tips expressed by investment experts/broking houses/rating agencies on moneycontrol.com are their own, and not that of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.LIVE NOW... Video series on How to Double Your Monthly Income... where Rahul Shah, Ex-Swiss Investment Banker and one of India's leading experts on wealth building, reveals his secret strategies for the first time ever. Register here to watch it for FREE.