Bharat Petroleum Corporation Ltd. share price target

The correction in oil prices led to super-normal marketing margins for OMCs in the latter part of last fiscal year, post which marketing margins have stabilised to normal levels. We expect similar profitability from this segment in the coming quarters. In terms of marketing sales, BPCL reported a growth of 1.7% YoY to 10.3 MMT, below our estimates on account of lower than expected diesel as well as overall product sales. Going forward, we expect marketing sales volumes to improve to 3.5-4.5% CAGR over the next two years. Crude throughput in Q2FY20 was higher YoY at 7.7 MMT, lower than...

The stock has surged ~35% in a month and almost fully reflects our bull case, leaving little upside. Government's demonstrably weak stance on auto fuel pricing (across different political regimes), expected credit rating downgrades (likely on losing implicit GoI support on balance sheet) and rich valuations compel us to downgrade BPCL to SELL A group of Secretaries on disinvestment has approved the strategic sale of Government of Indias (GoI) entire 53.2% stake in BPCL. The Department of Investment & Public Asset Management (DIPAM) has floated a request for proposal inviting transactions, legal advisors and asset valuers for this purpose. Yet, there is uncertainty on whether this will lead on to genuine privatisation or yet another stake sale to a Public Sector Unit (PSU).

We believe divestment of BPCL to private sector will help maximize revenue Change in Estimates | Target | Reco although it is unlikely to alter market dynamics in the near term. While...

Bharat Petroleum Corporation Ltd is one of India's leading Oil & Gas companies. It operates refineries located in Kochi, Mumbai, Bina and Numaligarh. The company's marketing infrastructure consists of...

BPCL consolidated net sales rose 6% to Rs 76325.39 crore for the quarter ended June 2019 compared to corresponding previous year period. This included subsidy from the government of Rs 139.22 crore down 44% on a y-o-y basis. Excluding compensation from the government sales of the company rose 6% to Rs 76186.17 crore. OPM of the company fell 250 bps to 3.9%. As a result operating profits fell 35% to Rs 2981.84 crore. Cost of material consumed as a percentage to net sales (net of stock adjustments) fell 30...

BPCL Q1FY20 result was a miss to our forecast on EBITDA and PAT front owing to higher inventory loss. Revenue was up 6.4% YoY to Rs763.2bn, EBITDA/PAT was down 43.7%/53.1% YoY to Rs21.8bn/Rs10.7bn respectively. Reported GRM came at US$2.81/bbl whereas core GRM came at US$3.6/bbl which was in-line to our forecast. We have cut our EBITDA forecast for FY20E by 10% to factor in high inventory loss whereas we have kept our EBITDA forecast for FY21E unchanged. We continue to maintain our TP of Rs412 based on 7x on EV/EBITDA. Upgrade to BUY from HOLD due...

For BPCL, core GRMs are expected to improve further by USD 0.5 to 1.0/bbl by FY22E on account of gradual increase in share of heavy and cheap crude at its Kochi refinery.Additionally, restoration of marketing margins as elections have concluded is a key positive. Our SOTP target is Rs 434/share (5.5x Jun 21E EV/e for standalone refining, 6.0x Jun 21E EV/e for marketing, and pipeline business and Rs 129/sh for other investments). Maintain BUY. Inventory losses and shutdown of BPCLs refinery has resulted in a muted 1Q performance. However, we maintain our BUY owing to its impeccable refining assets and healthy free cash flows (Rs 66.55bn) over FY21-22E.

BPCL reported a GRM of USD2.8/bbl, lower than our estimate of USD3.0 and USD7.5 in 1QFY19. Consequently, EBITDA was down 53% YoY/QoQ at INR21.5b, despite a decline of INR1.6b in other expenses. Adj. EBITDA was up 37% YoY at INR26.0b, with the refining inventory loss at INR1.3b and the marketing inventory loss at INR3.3b. Forex gain was at INR0.3b for the quarter (v/s a loss of INR7.1b in 1QFY19 and a gain of INR2.8b in 4QFY19). Reported PAT was at INR10.8b (-53% YoY). BPCL has reported first-quarter earnings based on Ind-AS 116. Depreciation...

BPCL's Q1FY20 EBITDA at Rs 21.8bn (44% YoY) outperformed estimates on higher GRMs (US$ 2.8/bbl after US$ 0.8/bbl inventory loss).

Despite good performance in marketing segment, Bharat Petroleum Corporation (BPCL) has reported weak operating performance in 1QFY20 with EBITDA falling by 44% YoY and 55% QoQ to Rs21.8bn (in line with our estimate) led by lower refining throughput and margin. It reported a GRM of US$2.81/bbl in 1QFY20 vs. US$7.49/bbl in1QFY19. We believe 4% YoY fall in crude throughput was mainly due to Mumbai refinery upgradation for BS-VI fuel. Its net profit declined by 53% YoY and 66% QoQ to Rs10.7bn (11% above our estimate) mainly due to higher interest cost (+50% YoY and +28% QoQ). Notably, its debt increased by Rs15.5bn sequentially. Further, adoption of Ind AS-116 resulted into net Rs520mn decrease in PBT. In Jul'19, benchmark complex...