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Business News/ Markets / Stock Markets/  BPCL share price rises more than 4% to 52 week highs; HPCL, IOC gain up to 2.5% on firm refining and marketing outlook.
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BPCL share price rises more than 4% to 52 week highs; HPCL, IOC gain up to 2.5% on firm refining and marketing outlook.

Stock Market Today: BPCL share price gained more than 4% in intraday trade to touch 52 week highs as HPCL IOC also saw gains of up to 2.5%. The analysts expect firm refining outlook and good marketing outlook to drive further upgrades for the oil marketing companies.

BPCL share price gains more than 4%, HPCL IOC see share price rising up to 2.5 on firm earnings outlookPremium
BPCL share price gains more than 4%, HPCL IOC see share price rising up to 2.5 on firm earnings outlook

Bharat Petroleum Corporation Ltd (BPCL) share price gained more than 4% to touch 52 week highs on Thursday. Hindustan Petroleum Corporation (HPCL) and Indian Oil Corporation (IOCL) also saw gains of up to 2.5% and a trading near highs . The earnings outlook for the companies remains strong and analysts maintain a positive outlook

Recently analysts at Morgan Stanley in their 4th February report have said that BPCL, HPCL and IOCL are in the early days of this re-rating given tight fuel supplies and rising availability of challenged crude.

The refiners had reported decent Q3 performance. BPCL reported Q3 gross refining margin was at $13.3 a barrel. The BPCL GRM though have softened below $ 15.9  barrel Q3FY23 and $18.5 a barrel in Q2FY24, however were higher than $ 11.6 a barrel estimated by Elara Securities. Elara analysts expect BPCL GRM to remain above mid-cycle level due to tighter refining product supply in CY24.  

Also Read- Lupin share price rises more than 6% to scale 52-week highs post Q3 results

Elara analysts have raised FY26 Earnings per share estimates for BPCL by 30% and thus target price to 608 (from 396) on better GRMs at $10.0 per barrel (from $ 7.5 a barrel ) and higher diesel/gasoline margin at 3.5/liter (from 1.0 a liter) on tighter refining supply outlook and benevolent crude prices at $ 80 a barrel.

Analysts at Jefferies India Private Ltd post Q3 results have said that marketing cos (BPCL, HPCL, IOCL) see  more than 10% earnings upgrade on strong marketing margins.

Also Read- Cummins India shares zoom over 10% to touch new record high after strong Q3 earnings

Meanwhile analysts at Morgan Stanley expect a well-supplied oil market, hardware upgrades, a 'golden age' for fuel refiners globally, and potential upside from cross holdings, to drive the next leg of earnings upgrades and multiples to levels only seen in 2014-2017. HPCL and IOCL, which were trading at a discount to BPCL for most of the past decade, are catching up as they showcase multiple triggers and clarity on earnings delivery by management, they added.

Disclaimer: The views and recommendations made above are those of individual analysts or broking companies, and not of Mint. We advise investors to check with certified experts before taking any investment decisions

 

 

 

 

PSU Oil marketing cos (BPCL, HPCL, IOCL) see >10% earnings upgrade on strong marketing margins. Gas cos (PetLNG, MGL) also beat on trading margins.

 

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ABOUT THE AUTHOR
Ujjval Jauhari
Ujjval Jauhari is a deputy editor at Mint, with over a decade of experience in newspapers and digital news platforms. He is skilled in storytelling, reporting, analysing and writing about stocks, investment ideas, markets, corporates and more. He is based in New Delhi.
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Published: 08 Feb 2024, 02:23 PM IST
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