Prabhudas Lilladher has given Buy recommendation for Hindustan Petroleum Corporation with a target price of Rs. 445 in its research report issued on Nov 03, 2021
Prabhudas Lilladher’s research report on Hindustan Petroleum Corporation
We increase our FY22-24E estimates by 5-11% to factor in to factor in higher GRMs led by 1) pickup in global economic activity and 2) gas to oil shift due to high prices even as there has been softening of marketing margins. HPCL reported lower than expected Q2 results with standalone EBITDA of Rs30.1bn (-6%QoQ; PLe Rs36.7bn) and PAT of Rs19.2bn (+7%QoQ; PLe Rs25.43bn), led by lower than expected refining earnings. Refinery operations were hit by shutdown of one unit each at Mumbai and Vizag refinery and high fuel & loss. OMCs are well placed to benefit from global pickup in economic activity post pandemic as their refining and marketing earnings will improve.
Maintain ‘BUY’ with a revised PT of Rs445 (Rs404) based on 8x PER FY23E and add value of investments.