BPCL share price scales 52-week high: 7 key reasons why Jefferies expects more than 30% gains for the stock

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₹890 . Sinec The BPCL share price is trading at close to ₹670 levels, the Jefferies target price for BPCL indicates more than 30% upside for the stock. Jefferies analysts said that range bound oil prices and government staying away from auto fuel pricing have seen Oil Marketing Companies rally 90-130% since October.

Red Sea disturbances have strengthened refining margins. BPCL as per Jefferies offers the largest margin of safety when compared to its peak cycle multiple. Its earnings are impacted less by possible marketing losses in diesel till the national elections.

1.Government has not intervened in retail pricing: Against a fear of a possible govt intervention in retail price of gasoline and diesel as marketing margins of Oil marketing companies rose ahead of normative levels in a heavy election season in December, the government did not intervene. Though margins have come off in recent times, government has stayed away from pushing a price reduction raising confidence in normative marketing margins in FY25 estimated. Also read- Gujarat Gas share price falls 6%; several brokerages downgrade stock after Q3 result 2.

Rangebound oil price: Oil price has been in $75-85 a barrel range since November despite the geopolitical developments in Gaza and the Red Sea disturbances despite the latter accounting for 10% of global crude shipments. Meaningful increase in oil price seems unlikely in CY2024 feels Jefferies unless OPEC+ changes its stand from voluntary to compulsory adherence of stated production cut targets. 3.

Refining strength on Red Sea disturbances positive for OMCs: Red Sea route accounts for 14% of global refined product supplies. Tanker transit by the Red Sea has fallen over 50% since December. This has led to