Geojit has given Buy recommendation for Hindustan Petroleum Corporation with a target price of Rs. 336 in its research report issued on May 26, 2021
Geojit’s research report on Hindustan Petroleum Corporation
Q4FY21 revenue grew 13.1% YoY on account of strong demand recovery observed post-lockdown relaxation in FY21. GRM stood at US$ 8.11/bbl (inventory gains of US$ 4.61/bbl) driven by higher volumes in lubes and other high margin products. EBITDA reported at Rs. 4,666cr (vs. Rs. 707cr loss in Q4FY20), as margin improved to 6.2% (vs. 1.1% loss in Q4FY20) on low material and operational costs. Adj. PAT declined 24.0% YoY on higher taxes. HPCL’s operational capabilities supported by proper demand planning to varying macro trends have enabled them sail through FY21 comfortably. Outlook remains positive with improvement in GRM and potential to execute planned projects.
Hence, we reiterate our BUY rating on the stock with a revised target price of Rs. 336 based on SOTP valuation.