ICICI Direct recommended hold rating on Hindustan Petroleum Corporation with a target price of Rs 295 in its research report dated November 11, 2019.
ICICI Direct's research report on Hindustan Petroleum Corporation
Hindustan Petroleum Corporation’s (HPCL) Q2FY20 results were below our estimates on account of poor operational performance on refining front. Although the refining segment disappointed, marketing segment performance remained stable. The topline declined 11.2% QoQ to Rs 66455.2 crore on account of lower product sales. The GRM’s stood at US$ ~2.8/bbl below our estimate of US$ 5.7/bbl in spite of inventory gains of US$0.3/bbl. Subsequently, EBITDA came in at Rs 2318.9 crore (up 41.1% QoQ) below our estimates of Rs 2596.9 crore. The reported PAT was at Rs 1052.3 crore below our estimates of Rs 1480.4 crore.
We have a HOLD recommendation on the stock with a target price of Rs 295 (based on average of P/BV multiple: Rs 310/share and P/E multiple: Rs 279/share).
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