Buy BPCL, target price Rs 420: HDFC Securities

HDFC Securities has buy call on Bharat Petroleum Corporation with a target price of Rs 420.
BPCL, incorporated in the year 1952, is a Large Cap company (having a market cap of Rs 78,266.64 crore) operating in Gas & Petroleum sector.

Investment Rationale
HDFC Securities upgraded BPCL to BUY, with a target price of Rs 420, given it has corrected 30% from its peak over the last six months, owing to pressure on auto-fuel marketing margins and an increase in LPG under-recoveries.


The brokerage believes the recent correction is overdone and see limited downside from current levels, led by: (1) improvements in refining margins, (2) resumption of daily auto-fuel price changes, and (3) a gradual reduction in LPG under-recoveries.

Financials
For the quarter ended 31-12-2021, the company has reported a Consolidated Total Income of Rs 95,914.55 crore, down 6.51% from last quarter's total income of Rs 102,596.50 crore and up 43.56% from last year's same quarter income of Rs 66,809.47 crore. The company reported a net profit after tax of Rs 2,354.28 crore in the latest quarter.

Promoter/FII Holdings
Promoters held 52.98 per cent stake in the company as of 31-Dec-2021, while FIIs owned 12.66 per cent, DIIs 21.13 per cent.