Goal: ₹240
CMP: ₹261
We met with the administration of Bharat Petroleum Company Ltd (BPCL) lately, and it: highlighted the proportion of Russian crude within the refining combine is prone to dip to about 24 per cent in Mar’25 (from 35-40 per cent), stays hopeful of constructive information from Mozambique in close to future, with gasoline provide beginning in FY29 and goals for an FY28 CGD EBITDA goal of ₹4,000 crore .
Whereas solely ₹6,100 crore has been accredited at the moment for the Andhra Pradesh refinery challenge, there’s a chance of one other ₹95,000 crore capex being incurred. The ₹49,000 crore Bina refinery growth can be underway with nearly all of the spending scheduled for FY26/FY27.
BPCL’s present 1-year ahead valuation of 1.3x P/B at par with the imply -1 SD (commonplace deviation). It now trades on par with HPCL (on a 1- yr ahead P/B foundation) vs. a historic premium of fifty per cent.
Whereas valuation seems affordable and robust advertising and marketing efficiency continues, a muted mid-term refining outlook (our FY26E/FY27E PAT are 17/18 per cent delicate to each $1/bbl change in GRM) and graduation of latest capex cycle emerge as key issues. Therefore, we reiterate our Impartial ranking with an SoTP-based valuation of ₹240/share
