Maharatna PSU Oil and Gas company, BPCL is a smoking hot bet for investors due to its strong earnings, and marketing core margins that are driving its growth. After a commendable performance, BPCL has declared double threats for investors in the form of a Rs 21 per share dividend and a 1:1 bonus issue. YTD, BPCL stock has zoomed by 39%.
BPCL Share Price:
This oil marketing company's stock price ended May month at Rs 627.60 apiece, with a market cap of Rs 1,36,142.30 crore.
The stock was near its 52-week high of Rs 687.65 apiece on BSE. YTD, the stock zoomed by 38.9%, while in a year, it rallied by 74%. BPCL's all-time gains are around 2,542.53%.
BPCL will be in focus ahead for its 1:1 bonus shares which are announced after 7 years, and the highest dividend payout of Rs 21 per share in 3 years.
BPCL Bonus Shares:
The PSU giant has recommended the issuance of bonus shares in the ratio of 1:1. Meaning that 1 new bonus equity share will be allotted free of cost against 1 existing BPCL share held by investors. The face value of these shares is Rs 10 each.
BPCL has fixed June 22, 2024, as the record date to determine the eligibility of shareholders to receive bonus shares.
BPCL Dividend:
In another second reward, BPCL will pay a final dividend of Rs. 21/- per equity share of the 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.
Earlier, for FY24, the company delivered a Rs 21 per share dividend for which it turned ex-dividend on December 12, 2023. Taking the latest dividend, BPCL's total dividend payout is about Rs 42 per share.
BPCL Share 2024 Target Price:
In its research note, Yes Securities said, "BPCL's Q4FY24 results exhibit a commendable financial performance, with a substantial YoY surge in EBITDA and Adj. PAT, standing at Rs 92.1bn and Rs 55.7bn, respectively. The core GRM at USD12.5/bbl and strong market share in diesel and motor spirits highlight the company's operational prowess. BPCL's strategic reduction in debt, annual capex of Rs110bn, and enhanced refining efficiency position it as a compelling investment, reflecting a positive outlook for sustained growth, to also be supported by the recent announcement of a 1:1 bonus issue."
On the valuation, Yes Securities note added, "BPCL has Rs22.1bn and Rs24.2bn sensitivity to a change of Rs0.5/ltr and USD1/bbl, respectively. An expectation of a dividend of 2.9%/2.9% FY25e/26e would be key for shareholders. The BV/share for FY25e/26e is at Rs 389/428 and the debt: equity is least amongst OMCs at 0.3x for 25e/26e."
It further said, "We maintain a BUY rating with a target price of Rs900 valuing it on a sum-of-parts basis (core business at 8x EV/EBITDA and investments at Rs129)."
BPCL posted a net profit of Rs 4,789.57 crore in Q4FY24, lower than the PAT of Rs 6,870.47 crore in Q4FY23, but better than Rs 3,181.42 crore in Q3FY24. Meanwhile, revenue from operations stood at Rs 1,32,086.86 crore, as compared to Rs 1,33,419.56 crore in Q4FY23 and Rs 1,29,984.84 crore in Q3FY24.
The Average Gross Refining Margin (GRM) of the Corporation for the year ended 3i5t March 2024 is $14.14 per barrel (FY 2022-23: $20.24 per barrel).
Disclaimer: The recommendations made above are by market analysts and are not advised by either the author or Greynium Information Technologies. The author, 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.
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