Hindustan Petroleum Corporation Ltd. share price target

HPCL Q1FY21 result was a strong beat to our and consensus estimates led by robust marketing profits however refining profits remained muted. The company's revenue declined 47% YoY to Rs377.2bn led by 26% decline in product sales volume to 7.2mmt and lower crude oil price. However on a positive surprise, refining throughput grew by 1.3% to 3.97mmt. Reported/Core GRM came at US$0.04/-0.9/bbl, lower than our estimates. We are raising our FY21 EBITDA/PAT estimates by 6.2%/9.4% to factor in strong beat and keeping FY22E estimates largely unchanged. We are raising our TP to...

We maintain our FY21/22 earnings estimates. During Q1FY21, core standalone EBIDTA adjusted for inventory gains was healthy at Rs37.2bn (+71%YoY) despite lower refining margins ($0.04/bbl vs $0.75/bbl in Q1FY20). Weak global demand and high inventory levels to likely keep crude oil prices...

HPCL reported net revenue of Rs. 66,155cr in Q4FY20, a fall of 2.6% YoY due to drop in crude oil prices during the quarter. The crude throughput fell 1.3% YoY to 4.54mmt (+9.1% QoQ) at Mumbai and Visakh refineries. However, pipeline throughput went up 2.0% YoY to 5.72mmt. Domestic sales volumes fell 7.8% YoY to 9.25mmt due to weaker transportation fuel demand and contraction in economic activities amidst COVID-19 lockdown throughout the nation. Oil prices impacted the margins Gross refining margins (GRM) for the quarter contracted to USD -1.23/bbl (vs....

A sharp reduction in oil demand owing to Covid-19 outbreak resulted in a significant drop in crude oil prices. As a result, average Brent crude oil prices declined by US$12/bbl QoQ to US$50.6/bbl with closing Brent price at US$21.5/bbl. On account of the same, the company reported marketing inventory loss of | 1529 crore. However, core marketing margins were relatively steady during the quarter. Marketing sales de-grew 7.8% YoY to 9.3 MMT mainly due to a decline in diesel sales. Going forward, we expect marketing sales volumes at 37.4 MMT & 42.2 MMT in FY21E and FY22E,...

We tweak our FY21/22 earnings estimates. In FY20, core EBIDTA adjusted for inventory and forex loss was stable at Rs103bn (-4%YoY vis--vis -55%YoY reported) despite lower refining margins ($1.0/bbl vs $5.0/bbl in FY19). Sharp drop in crude oil prices dragged down reported FY20 PAT, however, with its recovering part of the losses will be reversed. Benign crude oil prices to likely support marketing margins in medium term, whereas lower operating cost to...

17 June 2020 Reported EBITDA stood at INR0.7b; while EBITDA adj. for inventory stood at INR41.8b (v/s est. Thus, core GRM stood at USD9.6/bbl, with inventory loss of USD10.8/bbl. HPCL recorded an exceptional item of INR10b on account of the downward revaluation of inventories due to the COVID-19 impact. USD4.2/bbl of inventory loss (resulting in adj. The company has re-measured its DTL benefits and has thus written back tax of INR15.

Blended marketing margin rose 16% qoq to Rs5.7/kg, a 7% miss. Domestic/total sales volumes declined 8%/5% yoy, with petrol/diesel down 3%/9%. Gross debt rose 58% yoy/50% qoq to Rs430.2bn. Core EPS for Q4 stood strong at Rs11.9, a 30%+ beat. We raise FY21/22E EPS by 1%/9% due to low taxes/higher marketing margins, offsetting volume declines. We cut TP by 13% to Rs280, assuming higher debt. We reiterate Buy and OW stance in EAP. We remain positive on OMCs and HPCL is our top pick. Result highlights: Opex was broadly in line, with employee cost having Rs697mn provision due to PF trust investment diminution, while Other Expenditure was down 6% yoy/3% qoq....

HPCL's Q4FY20 PAT was battered by Rs 41bn in inventory losses.

Crude prices witnessed a sharp decline in March due to spread of Covid-19 across the globe and Opec deal failure. A likely increase in oil output by both Saudi Arabia and Russia from Q1FY21E and lower demand are expected to lead to a sizeable oversupply in the oil market. Subsequent low oil prices are expected to significantly affect ONGC's profitability....

We expect company's earnings to grow at healthy 21.8% CAGR over FY20-22E supported by ongoing capacity expansion and expected improvements in GRMs and reiterate our BUY rating on the stock, with a revised TP of Rs. 289 based on SOTP. Topline improves sequentially, but declines YoY In Q3FY20, Revenue grew 16.2% QoQ to Rs. 70,750cr but declined 1.9% YoY owing to drop in crude throughput. The planned shut downs at Visakh refinery due to BS-VI upgradation resulted in decline in throughput to 4.16mmt (8.8% YoY). Pipeline...