BPCL hits new 52-week high as Q3 profit jumps 82% on year; Citi sees 14% upside

BPCL share price: Shares of BPCL in trade on Tuesday (January 30) marked a fresh 52-week high of Rs 510.75, rallying as much as 3.68 per cent after the state-run oil marketing company (OMC) posted an 82 per cent jump in its net profit for the December quarter (Q3FY24).

At around 10:40 am, shares of the OMC traded with gains of 3.61 per cent at Rs 510.40 per share on the BSE.

The company's consolidated net profit for the October–December period of the current fiscal year came in at Rs 3,181.42 crore in comparison to Rs 1,747.01 crore logged in the same period of the previous financial year. In the July–September period, the company’s profit stood much higher at Rs 8,243.55 crore.

Its revenue from operations was lower at Rs 1.3 lakh crore versus Rs 1.33 lakh crore recorded in the same period last year.

“The continuing freeze in fuel prices, which is now 21 months old, despite a fall in input raw material (crude oil) prices, helped raise marketing margins,” noted the PTI report.

Earnings before interest, tax, depreciation, and amortisation (EBITDA) for Q3 FY24 at Rs 6,906.37 crore were higher than Rs 4,685.82 crore in Q3 FY23.

Here’s what brokerages recommend for BPCL after its Q3 FY24 results

Global brokerage JP Morgan continued with its ‘overweight’ rating on the counter, with the target slashed to Rs 600 from Rs 615 earlier. The brokerage maintained that the company’s standalone profit after tax (PAT) is 40 per cent less than its estimates, with dynamics mirroring those of other OMCs, including India Oil Corporation and HPCL.

BPCL typically trades at a higher price to earnings (P/E) than peers due to its specific E&P upside, which has currently eroded but could return should development in Mozambique restart, noted the brokerage.

Citi, on the other hand, maintained its ‘buy’ rating on BPCL with a target of Rs 560 given the robust refining performance and a sharp decline in debt. Nevertheless, marketing at the company suffered on the back of weaker margins and inventory losses.