Bharat Petroleum Q3 Results Review - Refining Margin Beats Estimates: Prabhudas Lilladher

Prabhudas Lilladher Report

Bharat Petroleum Corporation Ltd. reported better than expected Q3 FY24 results with an Ebitda of Rs 62.3 billion (down 52% QoQ, our estimate: Rs 59.9 billion). Reported profit after tax came in at Rs 34 billion (down 60% QoQ, our estimate: Rs 29.5 billion).

BPCL reported higher than estimated gross refining margin at $13.4/bbl. Going ahead, we build in GRMs of $6/bbl and a gross marketing margin of Rs 4.1/litre for FY25/26E.

The stock is currently trading at 1.5/1.4 times FY25/26 price/book value and 8.5/8.3 times FY25/26 enterprise value/Ebitda.

Owing to the uncertainty over sustainability of strong Singapore GRM and marketing margins due to the upcoming elections we maintain ‘Sell’ rating with a target price of Rs 381(previous Rs 371) based on oen time FY26 price/book value.

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