Maharatna PSU oil company, BPCL traded on a volatile note on Thursday, however, closer to its 52-week high levels. BPCL shares are trending because of its upcoming dividend rewards and free bonus shares in 1:1 ratio. Despite volatile refining scenario and weak Q4, brokerages like Emkay Global and Motilal Oswal have recommended BUY on the stock. The highest target on BPCL is of Rs 730.
BPCL Share Price:
At the time of writing, BPCL stock traded at the intraday low of Rs 623.30 apiece, down marginally on BSE with a market cap of Rs 1,35,209.52 crore. The stock corrected after rising to the day's high of Rs 633.
BPCL shares have nearly doubled from its 52-week low of Rs 331.50 apiece, while trading closely towards its 52-week high of Rs 687.65 apiece.
YTD, BPCL has gained by a whopping 38%. In a year, the stock is up by 72%.
BPCL Bonus Share:
This leading OMC has declared 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.
For determining the eligibility of shareholders to receive bonus shares, the company fixed June 22, 2024, as the record date.
BPCL Dividend:
Apart from bonus issue, BPCL will also pay a final dividend of Rs 21 per share 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.
Notably, in FY24, BPCL earlier 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.
BUY BPCL STOCK!
Currently, BPCL is also nearing Motilal Oswal's target price of Rs 660, while it has potential of over 17% upside from Emkay's target price of Rs 730. On other hand, Prabhudas Lilladher has re-rated its stance on BPCL stock.
Emkay Global On BPCL:
BPCL clocked Q4FY24 EBITDA/APAT of Rs92.7/55.7bn - a sizable 17-18% beat each, driven by higher-than-expected implied marketing margin of ~Rs7/kg (at a 16% beat). BPCL's reported GRM of USD12.5/bbl (vs. our estimate of USD13.5/bbl) was better than peers', with LPG buffer net positive vs. net negative for peers. Mgmt. reiterated its capex plans of Rs1.7trn up till CY28, and FY25/26 capex target is Rs150-160/160-200bn. Mgmt. indicated favorable margins at USD80-85/bbl crude price.
We value BPCL on the SOTP-EV/EBITDA based methodology, with investments at a 30% holdco discount. We roll over to Mar-26E, and retain our blended target EV/EBITDA at 6.0x. Key risks: Adverse commodity prices and downstream margins; currency movement; government policies; and project issues.
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.
Motilal Oswal On BPCL:
BPCL's GRMs have been at a premium to SG GRM on account of 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.
With valuations at 1.4x FY26E P/BV, we see limited upside from current levels. 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.
Prabhudas Lilladher On BPCL:
Going ahead, owing to demand concerns in the long term and inability to pass on rise in fuel costs we build in GRMs of US$6/bbl and a gross marketing margin of Rs 4.1/ltr for FY25/26E. The stock is currently trading at 1.6/1.5x FY25/26 P/BV. We re-rate the stock from 'Sell' to 'Reduce' with a TP of Rs547 based on 1.3x FY26 P/BV.
On a consolidated basis, BPCL posted a net profit of Rs 4,789.57 crore in Q4FY24, lower from PAT of Rs 6,870.47 crore in Q4FY23, but better from 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.
Disclaimers: 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.
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