Hindustan Petroleum Corporation Ltd. share price target

ICICI Securities Ltd | Retail Equity Research Hindustan Petroleum Corporation's (HPCL) Q3FY16 results were above our estimates on the profitability front. Revenues declined...

HPCL reported an EBITDA of Rs 22.4bn, led by strong GRM of US$ 7.9/bbl. Results are not comparable owing to inventory, forex and under-recovery impacts. Lower crude prices reduced UR and therefore, the interest cost was down -32% YoY. APAT was Rs 10.4bn.

HPCL reported a poor quarter led by inventory losses of ~Rs 14bn as crude prices fell by 17% between July and September. The reported operating loss was Rs 0.6bn, while net loss was Rs 3.2bn. Interest cost remained low owing to 89% fall in gross oil under recovery (UR). Quarterly results of OMCs are ambiguous as they get distorted by inventory, forex and UR impact.

HPCL reported strong results led by 6 years high GRM and inventory gains. Reported EBITDA was Rs 31bn, however, adj. (for forex, inventory, net UR) EBITDA was Rs 22bn ( 32% YoY). Interest cost remains low owing to 90% fall in gross UR. RPAT was Rs 15.9bn.

HPCL reported strong results in 4Q as EBITDA came in at Rs 35bn. Quarterly results are not comparable owing to timing mismatch in subsidy payments and inventory & forex impact. EBITDA for FY15 rose to an all time high of Rs 57bn ( 8%). PAT grew to Rs 27bn ( 54%) helped by lower interest cost (-47%).

HPCL reported an EBITDA loss of Rs 0.4bn vs. a loss of Rs 10bn YoY. Results are not comparable as (1) No net under recovery in 3QFY15 vs. Rs 34bn YoY (2) Inventory loss due to sharp fall in crude prices led to a GRM of USD (1.0)/bbl vs. 2.3 (3) Forex impact.

HPCL a fortune 500 company is one of the major integrated oil refining and marketing companies in India. They operate two coastal refineries, one at Mumbai (West Coast) having a capacity of 6.5 million metric tonnes per annum...