Bharat Petroleum Corporation Limited shares closed 2.07 percent down at Rs 352.9 after Jefferies downgraded the stock to underperform on September 20.
The foreign brokerage firm has set the target price at Rs 310 per share.
Jefferies expects BPCL to incur Earnings Before Interest Tax Depreciation and Amortisation loss in the second half of FY24 due to increased marketing losses in diesel. The brokerage firm has cut BPCL’s EBITDA margin by 22 percent for FY24.
Also read: BPCL share price flat on fundraising plan; Citi maintains a 'buy' rating
Jefferies said that the Oil Marketing Companies (OMCs) are currently facing significant losses of approximately Rs 9 per litre on diesel, leading to a potential combined loss of around Rs 450 billion in the second half of FY24, assuming current Brent and diesel prices. With important elections in December, the possibility of reducing retail diesel or gasoline prices cannot be dismissed, said the brokerage firm. However, Jefferies expects Indian Oil Corporation Limited to be the least affected due to its favourable refining-to-marketing ratio among peers.
BPCL shares have gained 5.3 percent since January 1 and 9.21 percent in the last one year.
BPCL’s sales were down 6.6 percent Year-on-Year (YoY) at Rs 112,985 crore in the April-to-June quarter. The company made a profit of Rs 10,644 crore in Q1FY24 as compared to a loss of Rs 6,148 crore in the same period last year.
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