Bharat Petroleum Corporation Ltd. share price target

The correction in oil prices led to super-normal marketing margins for OMCs in Q4FY19, which led to lower margins QoQ. However, on an absolute basis, the marketing segment reported a stable performance in Q1FY20. We expect similar profitability from this segment in coming quarters. In terms of marketing sales, BPCL reported growth of 1.3% YoY to 11.1 MMT, below our estimates on account of lower-than-expected LPG and diesel sales. Going forward, we expect marketing sales volumes to grow at 3.5-4.5% CAGR over the next two years. The crude throughput in Q1FY20 was higher...

10 bps to 38.1%, other expenditure decreased 10 bps to 5.5%, staff cost remained flat at 1.4% and purchase of stock in trade decreased 40 bps to 48.7%. Other income rose 27% to Rs 1057.61 crore. Interest cost rose by 61% to Rs 352.58 crore. Depreciation rose 23% to Rs 914.88 crore. PBT was up 27% to Rs 4595.14 crore. Effective rate...

We expect BPCL's core EBITDA (adjusted for inventory and forex gains/losses) growth to lag peers' in the absence of refining capacity expansion. Besides, the interest cost will increase as a consequence to jump in debt. We downgrade to NEUTRAL with a SOTP target of Rs 409/sh (5.5x Mar 21E EV/e for standalone refining, 6.0x Mar 21E EV/e for marketing and pipeline businesses plus Rs 129/sh for other investments). We like BPCL owing to its impeccable refining assets. However, it is in the weakest spot among OMCs, with no refining capacity addition in foreseeable future and increase in interest cost on account of increasing debt. Hence, we downgrade to NEUTRAL.

BPCL's Q4FY19 result was a beat to our forecast owing to strong marketing profit and inventory gain. Revenue was up by 13.4% YoY to Rs739.9bn, EBITDA/PAT was up 29.1%/16.9% YoY to Rs48bn/Rs31.2bn respectively. Core GRM remained weaker like other OMCs, in line with our expectation, at US$2.6/bbl vs US$5.6/bbl in Q4FY18. We are still awaiting for the turnaround in GRM at Kochi terminal as FY19 GRM of US$3.6/bbl was lower than Singapore benchmark. We introduce FY21 financials and roll over our valuation which gives a new TP of Rs412. As the stock has already given 17%...

forex gain of INR2.8b, as against a gain of INR0.5b in 4QFY18 and INR1b in 3QFY19. PAT came in at INR31.2b (+17% YoY; 40% beat). Core GRM stood at USD2.6/bbl (our estimate: USD3.0; 4QFY18: USD5.6; 3QFY19: USD6.0). Core GRM was higher at Mumbai (USD3.03) and lower at Kochi (USD2.14) refineries. Refinery throughput of 8.2mmt (+5% YoY, +10% QoQ) was in line with our estimate. Implied marketing margin, inclusive of inventory gain, was at an all-time high of INR6.5/liter (v/s INR4.6 in 4QFY18 and INR2.9 in 3QFY19). Net of...

610 bps to 41.6%, other expenditure decreased 150 bps to 4.5%, staff cost fell 20 bps to 1.1% and purchase of stock in trade decreased 20 bps to 51.8%. Other income rose 36% to Rs 967.19 crore. Interest cost rose by 69% to Rs 336.9 crore. Depreciation rose 15% to Rs 778.14 crore. PBT was down 81% to Rs 589.51 crore. Effective...

We maintain NEUTRAL. BPCLs 3QFY19 EBITDA came in at Rs 7.37bn, down 76.9% YoY and 69.5% QoQ, primarily due to Rs. 33.33bn of inventory losses, partially offset by Rs. 6.59bn of forex gains. Adjusting for inventory losses and forex gains, core EBITDA was Rs 34.11bn up 140% YoY and 78.2% QoQ. Operationally, it was a strong quarter with core GRM (excluding inventory losses of USD 3.27/bbl) at USD 6/bbl vs USD 5.73/bbl in 3QFY18.

BPCL's Q3FY19 results were a beat to our estimates on all front on the back of better sales volume, forex gains and more than expected core GRM. While revenue was up 30.6% YoY to Rs791bn, EBITDA/PAT both declined by 76.9% YoY to Rs7.3bn/Rs4.9bn respectively mainly due to huge inventory losses. Crude throughput/sales volume grew marginally by 3%/2% YoY to 7.5mmt/11.5mmt. Reported GRM stood at US$2.8/bbl while core GRM came at US$6.0/bbl in Q3FY19 vs US$4.9/bbl in Q3FY18. We are raising our SOTP based target price to Rs395 from Rs348 earlier on the back of strong...

ICICI Securities Ltd | Retail Equity Research Bharat Petroleum Corporation (BPCL) reported Q3FY19 results that were below our estimates on the EBITDA front mainly on account of...

BPCL's Q2FY19 results were below our estimates due to lower sales volume coupled with lower inventory gains of Rs14.3 bn and higher forex losses of Rs9.3 bn. Revenue was up 35.6% YoY to Rs723 bn while EBITDA/PAT declined 31%/48% to Rs24/12.2 bn. Crude throughput grew by 8% while sales volume declined 2.8% YoY to 10.1mmt (-10.6% QoQ). Core GRM fell to US$3.3/bbl while reported GRM declined 30% YoY to US$5.6/bbl. We expect GRM expansion at Kochi to kick-in post ramp up of Propylene Unit to feed its upcoming Petchem facility from FY20. We are raising our exchange rate assumption to Rs70 from Rs68 for H2FY19 and FY20. We are cutting our TP to Rs333...