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S u b s i d y b u r d e n d r a g s b ot t o m l i n e i n t h e r e d …
Bharat Petroleum Corp (BPCL) declared its Q1FY12 results with revenues
of | 46139.6 crore, EBITDA loss of | 2164.2 crore and PAT of | 935.2
crore. The results were below our estimates mainly on account of higher
net under-recoveries and lower refining margins. The downstream
companies shared a net subsidy burden of 32.32% in Q1FY12. The GRM
decreased to $3.02 per barrel in Q1FY12 compared to $3.57 per barrel in
Q1FY11 mainly on account of lower throughput and plant shutdowns at
the Kochi refinery. We have maintained our Brent crude oil prices
estimates of US$100 per barrel, going forward. We assume net underrecoveries for downstream companies at 8.8% in FY12E and FY13E. We
estimate BPCL will report EPS of | 50.8 and | 53.5 in FY12E and FY13E,
respectively. We recommend a HOLD rating on the stock with a price
target of | 727.
ƒ Highlights of the quarter
Crude oil throughput declined 7.1% YoY from 5.6 MMT in Q1FY11
to 5.2 MMT in Q1FY12. The gross refining margins (GRMs)
decreased from US$3.57 per barrel in Q1FY11 to US$3.02 per barrel
in Q1FY12 on account of lower throughput and shutdowns at the
Kochi refinery. The total market sales increased 5.5% YoY from 7.4
MMT in Q1FY11 to 7.8 MMT in Q1FY12. The net subsidy burden for
downstream companies in this quarter is 32.32% in Q1FY12, which
led to net under-recoveries of | 3356 crore in Q1FY12.
V a l u a t i o n
BPCL is trading at 16.8x FY12E and 11.4x FY13E EPS of | 40.6 and | 59.9,
respectively. We recommend the stock with a HOLD rating and price
target of | 727 (valuation based on average of P/BV multiple: | 666 per
share and P/E multiple: | 788 per share)
India Equity Research Reports, IPO and Stock News
Visit http://indiaer.blogspot.com/ for complete details �� ��
S u b s i d y b u r d e n d r a g s b ot t o m l i n e i n t h e r e d …
Bharat Petroleum Corp (BPCL) declared its Q1FY12 results with revenues
of | 46139.6 crore, EBITDA loss of | 2164.2 crore and PAT of | 935.2
crore. The results were below our estimates mainly on account of higher
net under-recoveries and lower refining margins. The downstream
companies shared a net subsidy burden of 32.32% in Q1FY12. The GRM
decreased to $3.02 per barrel in Q1FY12 compared to $3.57 per barrel in
Q1FY11 mainly on account of lower throughput and plant shutdowns at
the Kochi refinery. We have maintained our Brent crude oil prices
estimates of US$100 per barrel, going forward. We assume net underrecoveries for downstream companies at 8.8% in FY12E and FY13E. We
estimate BPCL will report EPS of | 50.8 and | 53.5 in FY12E and FY13E,
respectively. We recommend a HOLD rating on the stock with a price
target of | 727.
ƒ Highlights of the quarter
Crude oil throughput declined 7.1% YoY from 5.6 MMT in Q1FY11
to 5.2 MMT in Q1FY12. The gross refining margins (GRMs)
decreased from US$3.57 per barrel in Q1FY11 to US$3.02 per barrel
in Q1FY12 on account of lower throughput and shutdowns at the
Kochi refinery. The total market sales increased 5.5% YoY from 7.4
MMT in Q1FY11 to 7.8 MMT in Q1FY12. The net subsidy burden for
downstream companies in this quarter is 32.32% in Q1FY12, which
led to net under-recoveries of | 3356 crore in Q1FY12.
V a l u a t i o n
BPCL is trading at 16.8x FY12E and 11.4x FY13E EPS of | 40.6 and | 59.9,
respectively. We recommend the stock with a HOLD rating and price
target of | 727 (valuation based on average of P/BV multiple: | 666 per
share and P/E multiple: | 788 per share)
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