ICICI Direct has given Hold recommendation for Bharat Petroleum Corporation with a target price of Rs. 495 in its research report issued on Jun 01, 2021

ICICI Direct’s research report on Bharat Petroleum Corporation

Bharat Petroleum Corporation (BPCL) reported Q4FY21 results that were better than our estimates on the profitability front on account of inventory and exceptional gains. Revenues increased 14.1% QoQ to Rs 98755.6 crore, against our estimates of Rs 100818 crore. Marketing sales at 11.2 MMT were marginally better than estimated. Reported GRMs at US$6.6/bbl (our estimate: US$4/bbl) were lifted by inventory gain of US$4.2/bbl. Subsequently, EBITDA at Rs 5057.9 crore (up 17.5% QoQ) was higher than our estimate of Rs 3006.1 crore. The company reported an exceptional gain of Rs 6993 crore. Consequently, reported PAT was at Rs 11940.1 crore, up 329.9% QoQ (our estimate: Rs 1881.8 crore).

Outlook

We roll over valuations to FY23E and maintain HOLD recommendation on the stock with a target price of Rs 495 based on average of P/BV multiple and P/E multiple at Rs 495/share each (earlier TP: Rs 350).

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