Broker’s call: BPCL (Reduce) – The Hindu BusinessLine

BUSINESS

Broker’s call: BPCL (Reduce) – The Hindu BusinessLine

AIMPWA

May 5, 2025

Table of Content

Target: ₹267

CMP: ₹321.15

Bharat Petroleum Corporation Ltd (BPCL) has reported better-than-expected Q4-FY25 results with EBITDA of ₹7,760 crore (up 2.4 per cent q-o-q, PL Capital estimates: ₹3,570 crore, BBGe: ₹5,790 crore). Adj PAT came in at ₹4,550 crore (down 2.1 per cent q-o-q, PLe: ₹1,410 crore, BBGe: ₹2,520 crore).

The company reported an exceptional item of ₹1,770 crore due to impairment loss in its wholly owned subsidiary BPRL. GRM stood at $9.2/bbl, while GMM as per our calculation came in at ₹5.9/ltr. While GMM on petrol/diesel has risen to ₹12.3/9.7/ltr in Q1-FY26-TD, average Singapore GRM continues to remain weak at $3/bbl, and with the steep decline in crude oil prices we expect the company to report inventory losses.

The company expects LPG under-recoveries to persist at ₹170/cyl. We thus build in GRM of $7.6/bbl (factoring in better configuration of Bina refinery) in FY26/27 and marketing margin of ₹4.8/4.1/ltr for FY26/27.

The stock is currently trading at 1.5/1.4x of FY26/27 P/BV. We maintain Reduce rating with a TP of ₹267 based (against previous target price of ₹261) on 1.2x FY27 P/BV.

Published on May 5, 2025

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