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S u b s i d y b u r d e n d r a g s b o t t o m l i n e t o r e d …
Bharat Petroleum Corporation (BPCL) declared its Q2FY12 results with
revenues of | 42301.9 crore, EBITDA loss of | 2694.8 crore and net loss of
| 3229.3 crore. The results are below our estimates mainly on account of
higher net under-recoveries, forex losses of ~| 800 crore and low refining
margins. The downstream companies shared a net subsidy burden of
66.67% in Q2FY12. The GRM decreased to $1.6/barrel in Q2FY12
compared to $2.8/barrel in Q2FY11 mainly on account of custom duty
reduction in June end. We have maintained our Brent crude oil prices
estimates of US$100/barrel, going forward. We expect gross underrecoveries at ~| 1,10,950 crore and ~| 83,500 crore in FY12E and FY13E,
respectively. We assume net under-recoveries for downstream
companies at 8.8% in FY12E and FY13E. We estimate BPCL will report
EPS of | 30.2 and | 54.3 in FY12E and FY13E, respectively. We
recommend a BUY rating on the stock with a price target of | 693.
ƒ Highlights of quarter
The crude oil throughput remained flat YoY at 5.6 MMT in Q2FY12.
The gross refining margins (GRMs) decreased from US$2.8/barrel in
Q2FY11 to US$1.6/barrel in Q2FY12 on account of custom duty
reduction in June end. The total market sales increased 6.06% YoY
from 6.6 MMT in Q1FY11 to 7.0 MMT in Q2FY12. Net subsidy
burden for downstream companies in this quarter is 66.67% in
Q2FY12, which led to net under-recoveries of | 3227 crore in
Q2FY12.
V a l u a t i o n
BPCL is trading at 20x FY12E and 11.1x FY13E EPS of | 30.2 and | 54.3,
respectively. We recommend a BUY rating on the stock with a price target
of | 693 (valuation based on average of P/BV multiple: | 649/share and
P/E multiple: | 737/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 o t t o m l i n e t o r e d …
Bharat Petroleum Corporation (BPCL) declared its Q2FY12 results with
revenues of | 42301.9 crore, EBITDA loss of | 2694.8 crore and net loss of
| 3229.3 crore. The results are below our estimates mainly on account of
higher net under-recoveries, forex losses of ~| 800 crore and low refining
margins. The downstream companies shared a net subsidy burden of
66.67% in Q2FY12. The GRM decreased to $1.6/barrel in Q2FY12
compared to $2.8/barrel in Q2FY11 mainly on account of custom duty
reduction in June end. We have maintained our Brent crude oil prices
estimates of US$100/barrel, going forward. We expect gross underrecoveries at ~| 1,10,950 crore and ~| 83,500 crore in FY12E and FY13E,
respectively. We assume net under-recoveries for downstream
companies at 8.8% in FY12E and FY13E. We estimate BPCL will report
EPS of | 30.2 and | 54.3 in FY12E and FY13E, respectively. We
recommend a BUY rating on the stock with a price target of | 693.
ƒ Highlights of quarter
The crude oil throughput remained flat YoY at 5.6 MMT in Q2FY12.
The gross refining margins (GRMs) decreased from US$2.8/barrel in
Q2FY11 to US$1.6/barrel in Q2FY12 on account of custom duty
reduction in June end. The total market sales increased 6.06% YoY
from 6.6 MMT in Q1FY11 to 7.0 MMT in Q2FY12. Net subsidy
burden for downstream companies in this quarter is 66.67% in
Q2FY12, which led to net under-recoveries of | 3227 crore in
Q2FY12.
V a l u a t i o n
BPCL is trading at 20x FY12E and 11.1x FY13E EPS of | 30.2 and | 54.3,
respectively. We recommend a BUY rating on the stock with a price target
of | 693 (valuation based on average of P/BV multiple: | 649/share and
P/E multiple: | 737/share).
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