ICICI Securities is bullish on Hindustan Petroleum Corporation has recommended buy rating on the stock with a target price of Rs 278 in its research report dated June 17, 2020.
ICICI Securities research report on Hindustan Petroleum Corporation
Hindustan Petroleum Corporation’s (HPCL) consolidated and standalone recurring EPS were in the red in Q4FY20 and down 65-69% YoY in FY20, both hit mainly by inventory loss vs gain in FY19. We estimate the company’s Q1FY21E EPS to be up 232% YoY, despite steep fall in sales volumes due to lockdown, boosted by record auto fuel marketing margins, YoY surge in GRM and inventory gain. Net marketing margin has recovered after being briefly in the red and the outlook for FY21 appears promising. GRM is weak, but has shown some recovery since last week.
Outlook
HPCL has adopted the lower tax rate of 25.17%. Factoring-in the lower tax rate has boosted FY21-FY22 EPS estimates by 11% and target price by 2% to Rs278 (32% upside). Reiterate BUY.
For all recommendations report, click here
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