Hindustan Petroleum Corporation Ltd. share price target

HPCL's, is engaged in the business of refining of crude oil and marketing of petroleum products, Profit Slumps But Beats Estimates Hindustan Petroleum Corporation Limited (HPCL) reported a profit of Rs 247.55 crore in...

5 February 2019 HPCL reported a core GRM of USD10/bbl in 3QFY19, resulting in core EBITDA of of INR35b was higher than our estimate of INR19.7b, resulting in EBITDA of v/s INR2.7b in 3QFY18 and a loss of INR8.9b in 2QFY19. PAT declined 87% YoY (- 77% QoQ) to INR2.5b. Against SG GRM of USD4.3/bbl in the quarter, HPCL reported a core GRM of USD10/bbl. However, inventory loss of USD6.3/bbl resulted in a reported GRM of USD3.7/bbl.

Our SOTP target is Rs 260 (5x Sep 20E EV/e for standalone refining, 6x EV/e for marketing and pipeline and Rs 93/sh from other investments). Maintain BUY. HPCLs 2QFY19 EBITDA came in at Rs 21.22bn, down 27% YoY and 33% QoQ majorly due to forex losses and lower GRMs. The company made forex losses of Rs 8.87bn (vs gain of Rs 0.2bn 1QFY18 and loss of Rs 5.4bn in 1QFY19) owing to the depreciation of rupee. Reported GRM was down 36% YoY% and 33% QoQ to USD 4.8/bbl (inventory gains of USD 2.12/bbl).

HPCL's Q2FY19 result came below our expectation mainly driven by lower than expected sales volume, weaker GRM and higher forex losses. Revenue was up 42.1% YoY to Rs675bn while EBITDA/PAT was down 27%/37% YoY to Rs21.2/10.9 bn. Crude throughput grew by 2.6% YoY to 4.8mmt whereas sales volume remain flattish YoY to 8.8mmt. The company reported inventory gains of Rs12.8 bn and forex loss of Rs8.9 bn. We are revising our exchange rate assumption to Rs70/US$ for H2FY19E and FY20E, which led to a marginal change in estimates. We are keeping our TP unchanged at Rs248. However, due to 39% run-up since our last report (on 5th Oct'18), we downgrade...

ICICI Securities Ltd | Retail Equity Research Hindustan Petroleum Corporation's (HPCL) Q2FY19 results were below our estimates on the profitability front mainly on account of a...

However, recent sharp correction in the stock price has factored in most of the negatives. Hence, we maintain HOLD' rating on the stock with a revised target price of Rs 187 using the sum of the part (SOTP) valuation methodology. Higher crude oil prices drive revenue HPCL reported 26% YoY increase in net sales in Q1FY19 driven largely by higher crude oil prices. While domestic marketing sales volume rose by 5% YoY to 9.63 MMT, crude oil throughput surged 17% YoY to 5.45 MMT. Marketing sales volume growth was led by increased sales of motor spirit (Petrol) ( 6.9% YoY), high speed diesel (2.7% YoY), LPG (11.3%), aviation turbine fuel...

Currently, the stock is trading at 6.1x FY21E EV/EBITDA and 7.0x FY21E P/E. Hence, we believe that the stock is currently undervalued. Maintain BUY with target price of Rs 476/share. HPCLs 1.34% YoY growth in EBITDA and 2.7% growth in PAT in FY18 was misleading as the FY17 base was formed due to high inventory gains and one-off costs. However, FY18 performance reflects strong operational performance in both refining and marketing businesses. Core EBITDA (net of inventory gains/losses, forex gains/losses, one-off costs, and other operating income) and PAT were thus up 34.5% and 49.2% YoY.

Hindustan Petroleum Corporation Ltd.'s (HPCL) profit for the quarter ended June beat analyst estimates on inventory gains. HPCL reported a profit of Rs 1719.21 crore in Q1FY'19 compared to profit of Rs 924.75 crore in Q1FY'18, up by 86% while net sales rose 26% to Rs 67628.85 crore. Budgetary support from the government was Rs 274.37 crore in Q1FY'19 compared to Rs...

Revenue increased by 11.26% to Rs. 67331.52 Cr in Q1FY19 when compared to the previous quarter. Hindustan Petroleum Corporation Ltd Q1FY19 results Comment

HPCL's Q1FY19 result came ahead of our expectation led by strong inventory gains of Rs19.1 bn, partially offset by forex loss of Rs5.4 bn. Adjusting to these, result is largely in-line with expectation. Revenue was up 26.5% YoY to Rs676bn while EBITDA was up 96% YoY to Rs31.9bn and PAT was up 85.9% YoY to Rs17.1bn. Weak refining profits was more than offset by relatively stronger marketing profits which increased 28% YoY to Rs16.4 bn (adjusting to inventory gain). We are revising our estimates upwards by ~10% for both FY19/FY20E to factor in higher marketing profits. Though, we are cutting our TP to Rs336 from Rs351 on lower multiple owing to uncertainty on marketing margin...