1:1 Bonus Issue Record Date On June 22: BUY Maharatna PSU Stock BPCL For Rs 770/TP; Rs 21/Sh Dividend Ahead

Leading oil marketing company, BPCL which has a Maharatna status, will be in focus this week due to the record date of its bonus issue in the ratio of 1:1. BPCL's bonus issue is among the much-awaited this month. YTD, the stock is up by 39%. At the latest, Motilal Oswal has taken a neutral stance of Neutral on BPCL, while brokerages like Emkay Global and Antique Stock Broking have recommended BUY ahead of the bonus issue. The highest target price is Rs 770.

BPCL's share price closed at Rs 626.75 apiece last week on Friday, up by 1.23% on BSE with a market cap of Rs 1,35,957.92 crore. The stock is near its 52-week high of Rs 687.65 apiece and has nearly doubled from the 52-week low of Rs 331.50 apiece.

With a low PE of 5.10x and a healthy RoE of 35.72%, BPCL shares are up by 38.70% on BSE. In a year, the stock zoomed by 67.17%. All-time gains of BPCL are 2,539.16%.

BPCL Bonus Issue:

The OMC has fixed June 22 as the record date for determining eligible shareholders for the 1:1 bonus issue. Since the record date is on the weekend, the ex-bonus date of BPCL will be on the last trading day of the current week which is June 21. The ratio of 1:1 means that 1 existing equity shareholder of BPCL will receive 1 free bonus share. The face value is Rs 10 each.

The upcoming bonus issue is after seven years of gap by BPCL. Earlier, BPCL reward a bonus issue of 1:2 in July 2017, following more bonuses in the ratio of 1:1 each which was rewarded in July 2016, July 2012, and December 2000.

BPCL Dividend:

BPCL has announced its final dividend of Rs 21 per share for FY24, having a face value of Rs 10 each (pre-bonus), which translates into a final dividend of Rs.10.5/- per equity share of the face value of Rs.10/- per equity share) (post-bonus). The final dividend would be paid within 30 days from the date of its declaration at the AGM. The Record Date for the final dividend will be intimated separately.

This will be in addition to the Rs 21 per share interim dividend for which the stock turned ex-dividend on December 12, 2023. Taking the latest dividend, BPCL's total dividend payout is about Rs 42 per share.

Also, this will be the highest dividend payout by BPCL in three years. In 2021, the company delivered dividends up to Rs 95.5 per share.

BUY/SELL BPCL share price:

On BPCL, Motilal Oswal said, "BPCL's GRMs have been at a premium to SG GRM 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% Russian crude."

However, Motilal added, "with minimal volume growth, rising capex and volatility
in earnings from the marketing division, we maintain our Neutral rating with a
TP of INR660, valuing the stock at 1.5x FY26E BV."

On the other hand, Emkay Global said, "We maintain our constructive stance on OMCs led by steady marketing outlook, as the general elections pan out and despite the volatile refining scenario. We raise FY25-26E EPS by 15-20% each, on better marketing margins and below operating-line adjustments. We retain BUY, and raise rolled over Mar-25E TP by 22% to Rs730/share, supported by lower net debt."

But the highest target price is set by Antique Stock Broking of Rs 770 on BPCL with a BUY recommendation.

BPCL, a Maharatna PSU, aims to efficiently meet the energy needs of our nation with a combined refining capacity of over 40 MMT through refineries in Mumbai, Kochi, Numaligarh and Bina, which are strategically located.