Prabhudas Lilladher has given Buy recommendation for Bharat Petroleum Corporation with a target price of Rs. 505 in its research report issued on Feb 09, 2021
Prabhudas Lilladher’s research report on Bharat Petroleum Corporation
We change our FY23E earnings estimates by 32% to incorporate inventory gains of Rs37.8bn in 9MFY21 and make minor changes; FY22/23 earnings are changed by 6%/4%. During Q3FY21, core standalone EBIDTA adjusted for inventory gains and forex gains was at Rs34.6bn (+178%QoQ) due to higher marketing earnings. We believe uncertain global demand and high inventory levels will likely keep crude oil prices range bound to support marketing margins in medium term.
Outlook
Meanwhile GRMs will recover with pickup in economic activity and lower operating cost (due to soft spot LNG prices) will support refining earnings. BPCL remains one of our preferred divestment play in the oil and gas sector. Maintain BUY with a TP of Rs505 (Rs479 earlier).