Prabhudas Lilladher is bullish on Hindustan Petroleum Corporation has recommended buy rating on the stock with a target price of Rs 354 in its research report dated August 07, 2019.
Prabhudas Lilladher's research report on Hindustan Petroleum Corporation
We tweak our earnings to factor changes in forex rate (USD/INR at Rs70/72.1 for FY20/21) and other minor changes post Annual report updation. During Q1, core performance for HPCL was hit by inventory loss and lower than expected GRMs. However, benign crude prices and recovery in refining margins is positive for the OMCs and hence we expect a much better Q2FY20.
Outlook
State PSUs are also likely to benefit from implementation of IMO2020 effective January given >40% diesel slate. Maintain BUY with a revised PT of Rs354 (Rs326) based on 10x FY21E.
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