BPCL Trust sells 68.4 lakh shares in block deal, stock gains

Around 68.4 lakh shares or 0.3 percent stake in state-run oil marketing company Bharat Petroleum Corporation Limited (BPCL) changed hands in a block deal on February 14.

"The Board of Directors of BPCL has approved the sale of up to 68,36,948 equity shares held by BPCL ESPS Trust, in accordance with the BPCL Employee Stock Purchase Scheme 2020 and Sebi (Share Based Employee Benefits and Sweat Equity) Regulations, 2021," the company informed the the exchanges on February 13.

At 9:20am, the stock was quoting at Rs 595.50 on the NSE, up 1.9 percent from previous close. It has gained over 30 percent so far this calendar year as crude oil prices remained under control, which translated into better marketing margins.

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Last month, BPCL reported a 73 percent rise in net profit for the third quarter, helped by strong refining and marketing margins. The company's standalone net profit rose to Rs 3,393 crore in the three months ended December 31 from Rs 1,960 crore a year earlier.

Its average gross refining margin was $13.3 per barrel for the December quarter, while revenue from operations was little changed at Rs 1.3 lakh crore and expenses fell 4.5 percent.

Morgan Stanley believes that state-owned OMCs like HPCL, BPCL and Indian Oil have more room to rally as India remains the fastest-growing market globally for fuel demand with internal combustion engine vehicle demand also strong.

It also said that hardware upgrades by refiners prior to Covid-19 are now being reflected in earnings as the energy market becomes less volatile. "Stocks of oil refining and marketing companies are seeing multiples re-rate as investors reassess long-term growth prospects," said the brokerage in its report.

Morgan Stanley expects both earning upgrades as well as re-rating in these stocks with multiples rising to levels seen in 2014-2o017.

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