Neutral on BPCL, target price Rs 431: Motilal Oswal

Motilal Oswal has given a neutral rating to BPCL with a target price of Rs 431. The share price moved up by 0.10 per cent from its previous close of Rs 341.40. The stock’s last traded price is Rs 341.75.

Bharat Petroleum Corporation Ltd., incorporated in the year 1952, is a Large Cap company (having a market cap of Rs 74101.67 Crore) operating in Gas & Petroleum sector.

Financials
For the quarter ended 30-06-2020, the company reported a Consolidated sales of Rs 37999.25 Crore, down 44.93 % from last quarter Sales of Rs 68997.83 Crore and down 50.21 % from last year same quarter Sales of Rs 76325.39 Crore. The Company reported net profit after tax of Rs 2139.95 Crore in latest quarter.

Investment Rationale
BPCL trades at 9.9x FY22E EPS of INR34.3 and 1.5x FY22E PBV. The brokerage values BPCL at 1.8x (15% discount to FY15–18 post the reform period) Sep’22E PBV to arrive at TP of INR 431/share. It maintains neutral on the stock, with the slim possibility of divestment in the current circumstances

Promoter/FII Holdings
Promoters held 53 per cent stake in the company as of March 31, 2020, while FIIs held 12.3 per cent, DIIs 19.6 per cent and public and others 15.1 per cent.