Here’s What Analysts Made Of HPCL And BPCL’s Quarterly Performance

Oil-marketers Hindustan Petroleum Corporation Ltd. and Bharat Petroleum Corporation Ltd. reported quarterly earnings that topped estimates on the back of higher inventory gains.

Bank of America Merill Lynch

• Maintains ‘Neutral’, with a target price of Rs 443.
• Q1 numbers higher on inventories.
• Adjusted marketing Ebitda was in line and down significantly sequentially.
• Higher bar for BPCL to meet FY19 estimates.
• Fire at Mumbai refinery may hurt earnings in the near term.

Brokerages’ View On HPCL:

JPMorgan

• Maintains ‘Underweight’; cut target price to Rs 260 from Rs 295.
• Large inventory gains drove earnings beat.
• Underlying refining sharply weaker.
• HPCL’s older refineries not ideally positioned for IMO.
• Remains underweight given confluence of headwinds.
  

IDFC Securities

• Maintains ‘Outperformer’; cut target price to Rs 416 from Rs 440.
• Inventory gains offset weak refining; Strong marketing segment growth.
• Sharp dip in retail margins due to strong crude prices.
• Encouraged by operational performance for the quarter.

Deutsche Bank

• Maintains ‘Buy’; cut target price to Rs 410 from Rs 422.
• Q1FY19 results: net profit above estimate.
• Strong marketing performance in a challenging environment.
• Inventory gain supported robust refining margin.
• Strong performance contrary to investor concerns on adverse impact of high oil prices.

BofAML

• Maintains ‘Neutral’, with a target price of Rs 357.
• Q1 ahead of estimates on inventory.
• Refining misses, while marketing beats estimates.
• Higher margins needed to meet FY19.
• Retail fuel margins are positive, but below average now.

Shares of HPCL rose as much as 3.7 percent in early trade to Rs 293.10, while those of BPCL rose as much as 2.8 percent to Rs 398.