Buy HPCL, target price Rs 360: Emkay Global

Emkay Global has buy call on Hindustan Petroleum Corporation with a target price of Rs 360. The current market price of Hindustan Petroleum Corporation is Rs 292.55. Time period given by analyst is one year when Hindustan Petroleum Corporation Ltd. price can reach defined target.

Hindustan Petroleum Corporation Ltd., incorporated in the year 1952, is a Large Cap company (having a market cap of Rs 41698.23 Crore) operating in Gas & Petroleum sector.

Hindustan Petroleum Corporation Ltd. key Products/Revenue Segments include Refinery, Rent and Other Operating Revenue for the year ending 31-Mar-2021.



Financials
For the quarter ended 31-12-2021, the company reported a Consolidated Total Income of Rs 97146.50 Crore, up 10.29 % from last quarter Total Income of Rs 88085.42 Crore and up 39.64 % from last year same quarter Total Income of Rs 69571.51 Crore. Company reported net profit after tax of Rs 774.76 Crore in latest quarter.

Investment Rationale
The brokerage values HPCL on the SoTP basis, with a 6.3x blended target Mar’24E EV/EBITDA for the standalone business, 6.0x PE for HMEL stake and listed investments at a 30% holdco discount. Key risks: adverse petroleum price/margin/currency movement and policy actions and new project delays and issues

Promoter/FII Holdings
Promoters held 54.9 per cent stake in the company as of 31-Dec-2021, while FIIs owned 20.19 per cent, DIIs 15.12 per cent.