Hindustan Petroleum Corporation Ltd. share price target

Refinery upgrades to boost GRMs, throughputs by 65% Focused on increasing margins; earnings visibility high; valuations attractive We attended the HPCL analyst meet. Following are the key takeaways:...

ICICI Securities Ltd | Retail Equity Research Hindustan Petroleum Corporation's (HPCL) Q4FY16 results were above our estimates. The topline declined 3% QoQ to | 42195.2...

We believe in the near term, benefits from lower crude in terms of balance sheet healing and lower subsidy under-recovery are priced-in. The only trigger left is the marketing margin expansion. However, there may not be a linear increase in margins owing to political compulsions and the government?s directive to increase ethanol blending. We maintain our estimates and TP. Our SOTP target for HPCL is Rs 850 (~4.7x FY18E EV/EBITDA for standalone business and Rs 190/sh from investments).

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.