PSU Stock To Buy: 1:2 Bonus Shares, Rs.16.50/Share Dividend Declared; Eligible?

Hindustan Petroleum Corporation Ltd. (HPCL) is the stock under focus after the Board of Directors authorised a 1:2 bonus share arrangement and a Rs. 16.50 per share dividend for FY24 on Thursday in addition to the company's financial results for the quarter and year ending March 31, 2024. On the BSE, the Maharatna PSU stock HPCL ended the day 4.17% down at Rs 501.30 a share.

HPCL Bonus Shares

The Board of HPCL has fixed June 21, 2024 as the record date for the purpose of 1:2 bonus shares or 1 share will be credited for every 2 shares held by the shareholders on the record date. The pre-bonus issue paid-up share capital is Rs.1,418.55 Crore while the post-bonus issue paid-up share capital is Rs Rs.2,127.82 Crore. The estimated date by which such bonus shares would be credited/dispatched is on or before 08-07-2024.

The free reserves and/ or share premium required for implementing the bonus issue is Rs.709.27 Crore while the free reserves and/ or share premium available for capitalization is Rs.38,006.98 Crore as of March 31, 2024.

HPCL FY24 Dividend

The Board of Directors has approved a dividend of Rs.16.50 per share on face value of equity shares of Rs.10/- each for the FY 2023-24 for the purpose of which August 09, 2024 has been fixed as the record date.

"It is further informed that the aforesaid Final Equity Dividend of Rs.16.50 per equity share having face value of Rs. 10/- each (pre-bonus), which translates into final dividend of Rs. 11 per equity share having face value of Rs. 10/- each (post-bonus) for the Financial Year 2023-24, subject to the approval of the shareholders of the Company. The same would be paid within 30 days from the date of declaration at the ensuing AGM. The final equity dividend is in addition to the Interim Dividend(s) of Rs. 15.00 per share (pre-bonus) paid for the financial year 2023-24," said HPCL in a regulatory filing on Thursday.

HPCL Financials

In FY 2023-24, Hindustan Petroleum Corporation Limited (HPCL) recorded a record consolidated Profit after Tax (PAT) of Rs 16,015 crore, up from a consolidated net loss of Rs 6,980 crore in the previous financial year. In contrast to the previous financial year's standalone net loss of Rs 8,974 crore, the standalone PAT during FY 2023-24 was similarly the highest ever at Rs 14,694 crore.

The standalone net profit for the quarter ending in January-March 2024 is Rs 2,843 crore, up 437% from the PAT of Rs 529 crore for the preceding quarter ending in October-December 2023. PAT for January through March of 2023 was Rs 3,223 crore. For the quarter ending in January through March of 2024, the firm recorded revenue from operations of Rs 1,21,532 crore, which is a 6.2% increase over revenue from operations of Rs 1,14,445 crore reported for the similar quarter the previous year. Revenue from operations during the fiscal year 2023-24 was Rs 4,61,638 crore, down from Rs 4,66,192 crore the year before.

In the fiscal year 2023-2024, the average gross export duty (GRM) was US$ 9.08 per barrel, down from US$ 12.09 per barrel in the preceding fiscal year. The average gross export duty (GRM) for the January-March 2024 period was US$ 6.95 per barrel, compared to US$ 14.01 per barrel in the corresponding period of the prior year.

HPCL Share Price Target

Mandar Bhojane - Equity Research Analyst at Choice Broking said HINDPETRO is presently trading at Rs 504, exhibiting sideways movement within the range of Rs 490 to Rs 540. Profit booking from higher levels is observed. Should the price close above the Rs 540 level, it is anticipated to ascend towards the Rs 590 and Rs 600 levels. Conversely, Rs 490 and Rs 480 are expected to act as immediate support levels.

The Relative Strength Index (RSI) stands at 51.46 and is trending upwards, indicating sideways to bearish momentum. These technical indicators collectively suggest the potential for HINDPETRO to reach a target price of Rs 600 in the near term if the 540 level is breached.

To effectively manage risk, implementing a stop-loss (SL) at Rs 480 is advisable to protect investments against unforeseen market reversals. In summary, considering the technical analysis and prevailing market conditions, HINDPETRO presents an attractive buying opportunity for those aiming for a Rs 600 price if the stock price breaks the 540 level, provided prudent risk management measures are in place.

Disclaimer

The recommendations made above are by market analysts and are not advised by either the author, nor Greynium Information Technologies. The author, nor the brokerage firm nor Greynium would be liable for any losses caused as a result of decisions based on this write-up. Goodreturns.in advises users to consult with certified experts before making any investment decision.