BPCL announces dividend after strong Q3 earnings. Should you buy, hold or sell?
Premium- BPCL has announced second interim dividend of ₹5 per equity share for FY2021-22
BPCL share price: After reporting a consolidated net profit of ₹2,805 crore in recently ended December 2021 quarter, Bharat Petroleum Corporation Ltd (BPCL) has announced interim dividend of ₹5 per equity share for FY2021-22.
According to stock market experts, this robust Q3 earning of BPCL can be attributed to soaring crude oil prices in the international market. They said that after flight services coming back to normalcy, oil PSUs have increased their ATF (Air Turbine Fuel) prices that is expected to get reflected in strong Q4 numbers of the PSU Navratna Company. However, they also maintained that market was expecting more strong numbers from the company.
Speaking on whether one should buy BPCL shares after dividend announcement and strong Q3 numbers; Saurabh Jain, Vice President — Research at SMC Global Securities said, "The strong Q3 earnings of BPCL is because of the soaring crude oil prices in the month of November and December 2021. Company's gross refining margins are still down as fuel demand for ATF from the aviation sector has remained tepid in Q3FY22. This demand is expected to pick up after fast approaching normalcy in the aviation sector. That's why BPCL has increased its ATF price, which will help the company get more traction in upcoming Q4FY22 quarter."
However, Saurabh Jain said that market was expecting better Q3 numbers from the company and hence those who have BPCL shares in their portfolio are advised to hold the counter whereas fresh buyers should look at other options as budget 2022 may fuel rally in quality stocks in banking, infrastructure, real estate and capital goods segment.
Echoing with Saurabh Jain's views; Sumeet Bagadia, Executive Director at Choice Broking said, "BPCL share price is moving sideways and those who have this stock in their portfolio can hold it further for short-term target of ₹410 to ₹415 maintaining stop loss at ₹370 apiece levels."
Saurabh Jain of SMC Global Securities advised BPCL share holders to book profit in short-term as it is a commodity stock, which is driven by international triggers.
BPCL dividend announcement
In its latest communication with Indian Exchanges, BPCL management informed about the interim dividend announcement citing, "This is to inform you that the Board of Directors at its Meeting held on 31st January 2022 has declared 2nd Interim Dividend of ₹5/- per equity share of face value ₹10/-each i.e. 50% on the paid-up equity share capital of the Company for the Financial Year 2021-22. Further, the Board of Directors has fixed Friday, 11th February 2022 as Record date to determine the eligibility of the shareholders to receive the said Interim Dividend."
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Disclaimer: The views and recommendations made above are those of individual analysts or broking companies, and not of Mint.
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