What happened to BPCL share price after strong Q4 results, big dividend announcement

On the back of strong results and dividend news, Bharat Petroleum Corporation Limited (BPCL) hits a new 52-week high to Rs 488 per share on the BSE intraday during the early trade today. The company reported a four-fold jump in the fourth-quarter profit of the financial year 2020-2021. 

The state-owned company’s shares soared over three percent from the day’s low level and are currently trading at Rs 477 per share, up over one per cent at around 12:00 pm on Thursday. The stock has surged over five per cent in the last five sessions and over 16 per cent in the last month. 

BPCL on Wednesday reported a net profit of Rs 11,940 crore in the March-ended quarter for FY21 as compared to a net loss of Rs 2,958 crore in the same period last year. The company also declared a record Rs 12,581 crore dividend (Rs 58 per share), over half of which will go to the government. 

In this regard, the brokerage firms are quite bullish on the stock, moreover, have raised their price targets for bumper returns. JP Morgan maintaining an Overweight stance has raised a price target to Rs 550 per share, it said a large one-time dividend is the main highlight of a strong quarter. 

BPCL is one of the PSU (Public Sector Unit) companies that is scheduled to be divested in the current financial year. JP Morgan said, progress on privatisation is key and relative outperformance of OMCs against benchmark should continue. 

 Similarly, Morgan Stanley maintained an Overweight rating on the company and notes that the company's core earnings are largely in-line. Stating that retail fuel price hikes and dividend drives positive stance, it sets a price target of Rs 480 per share, which near to the current trading levels. 

While another brokerage firm, Jefferies maintained a Buy call on BPCL with a target at Rs 520 per share. It pointed out that the marketing volume growth is faster than industry and cut FY22/23 EBITDA by eight and five per cent respectively, also mentions privatisation is a key factor for further upside.