1:1 Bonus: Maharatna PSU Oil Stock BPCL To Pay Rs 10.5/Sh Dividend, Last Day To Be Eligible On Aug 9; BUY/SELL

One of the much-awaited dividends by PSU stocks is of Maharatna oil and gas company, BPCL. The deadline for being eligible for BPCL's final dividend of Rs 10.5 per share for FY24 is nearing in two days. Yes, this PSU giant stock is set to turn ex-dividend on August 9 which is also its record date to determine eligible shareholders for upcoming dividend payment. So should you buy, sell or be neutral in BPCL shares ahead of its ex-dividend date?

BPCL Share Price:

The PSU stock ended at Rs 334.50 apiece, down by 2.2% on BSE with a market cap of Rs 1,45,121.79 crore on August 7. The stock is still near its 52-week high of Rs 359.05 apiece, while its 52-week low is at Rs 165.75 apiece.

BPCL stock's month-on-month performance is up by 12%, while year-to-date, the stock has rallied over 48%. In a year, BPCL is up y 85.5%.

BPCL Dividend After Bonus Share:

As per the regulatory filing, BPCL said that it fixed Friday, 9th August 2024 as the 'Record Date' for the purpose of determining the eligibility of the members who would be entitled to the final dividend of Rs 10.5/- per equity share for the financial year 2023-24.

The final dividend, if approved, will be paid to the eligible members within the stipulated period of 30 days from the date of the AGM.

Earlier, BPCL paid an interim dividend of Rs 21 per share for FY24. Together, the company will deliver 315% dividend worth Rs 31.5 per share for the mentioned fiscal.

The payout also comes after BPCL turned ex-bonus on June 22 for its bonus issue of 1:1 ratio. The ratio of 1:1 means that 1 existing equity shareholder of BPCL has received 1 free bonus share. The face value is Rs 10 each.

BPCL Share Price Recommendation:

BUY BPCL Share:

In its latest report, Emkay Global said, BPCL posted better-than-expected performance in Q1FY25. SA EBITDA/APAT fell 40-45% QoQ each to Rs56.5/30.1bn but was a 19%/35% beat. Reported GRM stood at US$7.9/bbl vs our estimate of US$7.0/bbl. Implied marketing margin saw an 8% miss at ~Rs4.9/kg, but was offset by an 8% lower opex run rate and Rs4.1bn of inventory gains. LPG buffer turned negative at Rs20.2bn as of Jun-24-end vs. positive QoQ."

Emkay further added, "SA net debt was near-Nil. Mgmt indicated margin comfort at US$80-85/bbl for crude, and expectation of better refining spread ahead which should support its capex program and its aim to double profit by FY30. Also, LPG compensation is awaited. We retain our positive stance on OMCs led by a stable marketing outlook. We largely retain FY25-26E earnings and maintain BUY on BPCL, rolling over Sep-25E TP of Rs370/share."

REDUCE BPCL Share:

Swarnendu Bhushan, Co-Head of Research, Prabhudas Lilladher said, "Going ahead, given the weak Singapore GRM and factoring in demand concerns in the long term we build in a GRM of US$6.5/6/bbl for FY25/26E. On the marketing front, we estimate a gross marketing margin of Rs4.5/4.1/ltr for FY25/26E. The stock is currently trading at 1.6/1.5x FY25/26 P/BV. We maintain a 'Reduce' rating with a TP of Rs269 based on 1.3x FY26 P/BV."

Neutral On BPCL Share:

According to Motilal Oswal, BPCL's GRMs have been at a premium to SG GRMs on account of the continuous optimization of refinery production, product distribution and crude procurement. The use of advanced processing capabilities of Bina and Kochi refineries allows BPCL to process 100% of high sulphur crude and 50% of Russian crude.

The brokerage cut FY25E consolidated PAT by 16% mainly as we account for LPG "underrecoveries." These losses will likely be recovered from the government later in 2HFY25.

It added, "With valuations at 1.5x FY26E P/B, we see limited upside from the current level. Given marginal volume growth, rising capex and volatility in earnings from the
marketing division, we maintain our Neutral rating with a TP of INR320, valuing the stock at 1.5x FY26E BV."

Disclaimer: The write-up is just for information purposes, and is not a recommendation to buy, sell or hold. We have not done fundamental or technical analysis and have no opinion on article mentioned. Neither, the author nor Greynium Information Technologies should be held liable for any losses. Please consult a professional advisor.