{"id":7854,"date":"2015-07-15T17:13:23","date_gmt":"2015-07-15T11:43:23","guid":{"rendered":"https:\/\/blog.fundsindia.com\/blog\/?p=7854"},"modified":"2015-07-22T16:42:18","modified_gmt":"2015-07-22T11:12:18","slug":"bharat-petroleum-corporation-ltd","status":"publish","type":"post","link":"https:\/\/www.fundsindia.com\/blog\/equities\/bharat-petroleum-corporation-ltd\/7854","title":{"rendered":"Bharat Petroleum Corporation Ltd."},"content":{"rendered":"<p style=\"text-align: justify;\">Bharat Petroleum Corporation Limited (BPCL) is an Indian state-controlled oil\u00a0and gas company headquartered in Mumbai, Maharashtra. It has business\u00a0interests primarily in refining and marketing of crude oil. The refining and\u00a0marketing segment contributes ~99% of the total revenue. Its products include\u00a0LPG, diesel, petrol, bharat metal cutting gas, kerosene, aviation fuel, bitumen,\u00a0naphtha, auto lubes, lubricants, grease and oil. Its secondary segment\u00a0constitutes Exploration and Production (E&amp;P) activities. As of June 2015, the\u00a0company has participating interests in 17 exploration blocks; in consortium\u00a0with other companies.<\/p>\n<p><strong>Valuation and view<\/strong><\/p>\n<p style=\"text-align: justify;\">BPCL is one of the three key beneficiaries of the retail pricing\u00a0deregulation implemented by the government as it leads to\u00a0lower interest cost, relief from subsidy sharing burden and\u00a0higher auto fuel marketing margins. Besides it is also expected\u00a0to gain from ramp-up in its business verticals. It is planning to\u00a0expand its refining capacity by 60% to 48 MT giving it economic\u00a0moat in terms of improved market position. Moreover, in order\u00a0to reduce its exposure in under recoveries it is focusing on its\u00a0E&amp;P vertical. Notably, discoveries in the hydrocarbon reserves\u00a0in Brazil and gas reserves in Mozambique (recoverable reserves\u00a0estimated at ~70 tcf) provide high revenue visibility in this\u00a0segment.\u00a0We expect BPCL\u2019s net profit to grow at a CAGR of ~38% during\u00a0FY15-FY17E and the RoE and RoCE to improve to 26.2% and\u00a026.7% respectively.<\/p>\n<div class=\"blog-highlight\" style=\"clear: both; background: #2baae2; border: none; width: 60%; text-align: center; box-shadow: 0 5px 5px rgba(0, 0, 0, 0.5);\"><a style=\"text-decoration: none;\" href=\"http:\/\/www.fundsindia.com\/content\/jsp\/registration\/login.jsp?ref=blog-button\" target=\"_blank\"> <span style=\"color: #fff; font-weight: bold;\">Open<\/span> <span style=\"color: #fff; font-weight: bold; text-decoration: none;\"> a FREE Account Now! <\/span><\/a><\/div>\n<p style=\"text-align: justify;\">At the current market price (CMP) of Rs.\u00a0883, the stock trades at an EV\/EBITDA multiple of 5.4x FY16E\u00a0and 4.8x FY17E. We recommend \u2018BUY\u2019 with a target price of Rs.\u00a01,065, assigning a forward EV\/EBITDA multiple of 4.0x, which\u00a0implies a potential upside of ~21% to the CMP from 12 months\u00a0perspective.<\/p>\n<p style=\"text-align: justify;\"><a href=\"https:\/\/www.fundsindia.com\/blog\/wp-content\/uploads\/2015\/07\/Research-Report-Bharat-Petroleum-Corporation-Ltd.pdf\">Research Report Bharat Petroleum Corporation Ltd<\/a><\/p>\n<p style=\"text-align: justify;\"><i>Investments in equity shares, debentures, etc., are not obligations of, or guaranteed by Wealth India Financial Services Pvt. Ltd., and are subject to investment risks.\u00a0<a href=\"http:\/\/pages.fundsindia.com\/pages\/disclaimer-equities\/\">Click here<\/a>\u00a0to read our full disclaimer.<\/i><\/p>\n","protected":false},"excerpt":{"rendered":"<p>Bharat Petroleum Corporation Limited (BPCL) is an Indian state-controlled oil\u00a0and gas company headquartered in Mumbai, Maharashtra. It has business\u00a0interests primarily in refining and marketing of crude oil. The refining and\u00a0marketing segment contributes ~99% of the total revenue. Its products include\u00a0LPG, diesel, petrol, bharat metal cutting gas, kerosene, aviation fuel, bitumen,\u00a0naphtha, auto lubes, lubricants, grease and [&hellip;]<\/p>\n","protected":false},"author":14,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":[],"categories":[59],"tags":[],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v17.3 - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ -->\n<title>Bharat Petroleum Corporation Ltd.<\/title>\n<meta name=\"description\" content=\"Find the latest research report on Bharat Petroleum Corporation Ltd. 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