100% return in 2 years: BPCL shares in action as PSU plans expansion of core business

BCPL share price target: Shares of state-owned Bharat Petroleum Corporation (BPCL) gained over 3.25 per cent as benchmark equity indices Sensex and Nifty climbed in early trade on Monday amid buying in blue-chip stocks along with encouraging participation from retail investors. The counter gains as the PSU has stated that is plans to invest Rs 1.7 lakh crore over the next five years to grow its core oil refining and fuel marketing business as well as in 'future big bets' of petrochemicals and green energy.

The counter opened at Rs 338.15 on the BSE and gained further to touch the day's high of Rs 343.35 - a gain of around 3.25 per cent from the previous close of Rs 332.55 on the NSE. 

The stock has been gaining for the last 3 days and has risen 5.89 per cent in this period. The stock of the PSU, which has a market cap of Rs 1,48,137 crore, has a 52-week high of Rs 359.05 and a 52-week low of Rs 165.75.

BPCL plans expansion

State-owned Bharat Petroleum Corporation's chairman G Krishnakumar has said that the company plans to invest Rs 1.7 lakh crore over the next five years.

Bharat Petroleum Corporation Ltd (BPCL), currently, owns about 14 per cent of India's oil refining capacity and about a quarter of the fuel retailing network. It plans to grow these businesses while foraying into newer areas.

The firm is now implementing the first phase of a multi-decade aspirational journey in the form of 'Project Aspire' - its five-year strategic framework that is based on two fundamental pillars - 'Nurturing the Core' and 'Investing in Future Big Bets', he said in the company's latest annual report.

"Our mid-term strategy is on a continuum. While we remain committed to growing our core businesses, which include refining and marketing petroleum products and upstream, we are equally focused on our big bets comprising petrochemicals, gas, green energy, non-fuel retail, and digital.

"Project Aspire, with a planned capex outlay of around Rs 1.70 lakh crore over five years, will enable us to create long-term value for our stakeholders while preserving our planet for future generations," he said.

"A cornerstone of our long-term strategy, Project Aspire, with a Rs 1.70 trillion investment, marks the initial phase of our multi-decade odyssey to shape the energy of tomorrow. This, coupled with our robust balance sheet, fuels our ambition to lead the energy transition." The company is targeting net zero carbon emissions from its operations by 2040.

"BPCL has drawn a net-zero roadmap, which encompasses renewable power, green hydrogen, compressed biogas, carbon capture, utilisation, and storage (CCUS), efficiency improvement and the offsets procurements. This would require a phased capital outlay of approximately Rs 1 lakh crore till 2040, and the company is geared for the same," he said.

The firm's bet on continuing investing in core businesses is based on the premise that India's booming economy will drive a 4-5 per cent annual increase in energy demand and petroleum product consumption. Also, the demand for major petrochemical products is expected to rise by 7-8 per cent annually.

"This presents a strategic opportunity to expand refining capacity alongside the development of integrated petrochemical complexes," he said.

BPCL is implementing new petrochemical projects at two of its three oil refineries. A Rs 49,000 crore ethylene cracker project is being implemented at the Bina refinery in Madhya Pradesh, alongside raising oil refining capacity from the current 7.8 million tonnes to 11 million tonnes annually by 2029. A polypropylene project is being set up at Kochi refinery in Kerala by 2027.

With agency inputs