Hindustan Petroleum Corporation Ltd. share price target

HPCLs 3QFY17 EBITDA came in at Rs 28bn. Interest cost remains low (-68% YoY), owing to lower oil under recovery. PAT was at Rs 15.9bn. Results are not comparable to the previous periods owing to the impact of inventory, forex and oil under-recovery.

HPCL reported a weak set of numbers in Q2FY17 on the back of higher than expected inventory loss and lower than expected volume. The company's revenue remained flattish YoY to Rs421 bn (below IDBIest) while EBITDA came at Rs12.6 bn vs a loss of Rs667 mn (-65% QoQ) and net profit grew to Rs7 bn against a net loss of Rs3.2 bn, below expectation. Crude throughput decreased 4% YoY to 4.5mmt (-9.8% QoQ) while sales volume increased 3.2% to 8.2mmt (-8.3% QoQ). GRM came at US$3.2/bbl in Q2FY17, up from US$2.7/bbl in Q2FY16. Total under-recoveries on SKO came at Rs3.6 bn which was fully absorbed by the government. We are revising our SOTP based TP upwards to Rs457 (based on 11x FY18E EPS) from Rs400 earlier on the back of improved...

HPCLs 2QFY17 EBITDA was Rs 12.6bn. Interest cost remains low (-31% YoY) owing to lower oil under recovery. PAT was Rs 7.0bn. Due to impact of inventory/forex the results are not comparable to previous periods. The sequential decline in EBITDA was led by absence of inventory gains in 2Q.

ICICI Securities Ltd | Retail Equity Research Hindustan Petroleum Corporation's (HPCL) Q2FY17 results were below our estimates. Topline declined 7.4% QoQ to | 47822.5 crore, marginally lower than our estimate of | 52148.2 crore EBITDA at | 1260.9 crore was lower than our estimated EBITDA of | 1850 crore primarily due to lower-than-expected GRMs of US$3.2/bbl (inventory loss of $1/bbl) against our expectation of US$4.7/bbl. HPCL achieved crude throughput of 4 MMT in Q2FY17...

India’s domestic petroleum consumption growth will be 4-5x the world average, and is expected to grow at ~5% over the coming decade. However, the mix is expected to change in favor of gas (current share at ~7% v/s world average of ~24%) and clean energy sources. Indian petroleum consumption will be supported by (a) rising affluence and urbanization, (b) massive potential in end-market growth, (c) young, vibrant and upwardly mobile working class and (d) stable and pro-development government. Supportive macroeconomic trends that will drive energy demand and mix include: (a) improving GDP – more freight movement, (b) increasing disposable income, (c) thrust on clean energy sources and (d) demographic change with a higher share of working age population.

Valuation : Pure play petroleum marketing companies - US based CST Brands (CST US; M Cap: USD3.6b) and New Zealand based Z Energy (ZEL NZ; M Cap: USD2b) trade at >10x EV/EBITDA. These valuations (in-line with the underlying business dynamics) are more similar to consumer business than refining or oil & gas. They value HPCL (on FY18E) at 5x for refining and 7.5x for marketing to arrive at a fair value of INR1,490 implying a 19% upside. HPCL trades at 8.8x FY18E standalone EPS and 7x FY18E consolidated EPS of INR175. Maintain Buy.

HPCL reported a strong result in Q1FY17 on the back of higher adventitious and inventory gain supported by higher crude throughput & product sales volume. The company's revenue declined 12.9% YoY to Rs448 bn (below IDBIest) while EBITDA increased 17% YoY to Rs36.3 bn (+36% QoQ) and net profit grew 30% YoY to Rs21 bn, beats expectation. Crude throughput increased 20% YoY to 4.5mmt (-4.7% QoQ) while sales volume increased 4% to 8.9mmt (-1.4% QoQ). GRM came at US$6.8/bbl in Q1FY17, down from US$8.6/bbl in Q1FY16 (IDBIest US$7.1/bbl) which includes US$2/bbl of inventory gain. Also, the company's adventitious gain from marketing business came at nearly Rs10 bn which boosted profits. Total under-recoveries came at Rs3.3 bn which was fully...

HPCL’s reported strong results in 1QFY17 led by the inventory gains of ~Rs 11bn. EBITDA was Rs 36bn and RPAT was Rs 21bn. Results are not comparable owing to inventory, forex and under-recovery impacts.Growth in FY17 may be challenging considering the higher base and muted GRM trend. The benefits of lower crude prices (balance sheet healing and lower interest cost) are mostly priced in. Expansion in marketing margins is the only trigger left. We are positive on HPCL owing to a structural uptrend in marketing segment. The stock has moved up by ~80% over the past 6-months. We see a correction in near term (better entry point) led by the weakness in GRM and no further inventory gains.

Their SOTP target is Rs 1,350 (4x FY18E EV/e for standalone refining, 6.5x EV/e for marketing and Rs 255/sh from other investments). Maintain BUY.

ICICI Securities Ltd | Retail Equity Research Hindustan Petroleum Corporation's (HPCL) Q1FY17 results were above our estimates. The topline increased 22.4% QoQ to | 51661 crore, higher than our estimate of | 46299.6 crore. However, revenues were largely in line with our estimates, adjusting for change in accounting method due to Ind-AS EBITDA at | 3626.8 crore was higher than our estimated EBITDA of | 2394.5 crore due to inventory gain of | 1100 crore and higher-thanexpected GRMs of US$6.8/bbl against our expectation of US$6.3/bbl....

Hindustan Petroleum Corporation Ltd. (HPCL) is a Government of India Enterprise with a Navratna Status, and a Forbes 2000 and Global Fortune 500 company. It has two business segments which are engaged in refining, marketing and transportation of petroleum products, and Exploration & Production of Hydrocarbons. It owns and operates two refineries, which produce a range of petroleum fuels and specialties, one in Mumbai (West Coast) with a capacity of around 6.5 million metric tons per annum (MMTPA) and the other in Visakhapatnam (East Coast) with a...

HPCL held another analyst meet within a span of four months to give updates about its aggressive capex plans, different initiatives for improving efficiency, and for investors to interact with the new CMD, MK Surana. Prior to this, Surana was the CEO of Prize Petroleum, an upstream arm of HPCL.HDFC Securities SOTP target is Rs 1,100 (~5.3x FY18E EV/EBITDA for stand. And Rs 199/sh for other investments). Maintain BUY.

Trendlyne has 8 reports on HINDPETRO updated in the last year from 2 brokers with an average target of Rs 1070.Broker has a rating for HINDPETRO with 1 upgrade,2 price upgrades in past 6 months and 1 downgrades,1 price downgrades,2 upgrades and 3 price upgrades in past 1 Year.