BPCL upgraded by CLSA, remain bullish on long-term growth despite weak Q3 earnings
Q3 earnings, Bharat Petroleum Corporation Ltd. (BPCL) continues to attract attention from global brokerages. CLSA has upgraded BPCL’s stock to ‘Hold’ from ‘Underperform,’ while Morgan Stanley maintains its bullish stance with an ‘Overweight’ rating.
CLSA has set a target price of Rs 270 for BPCL, noting a manageable impact on the company’s gross refining margin (GRM) from U.S. sanctions on Russia. The brokerage also highlighted a 24% correction in BPCL's stock since October 2024. While CLSA has lowered its earnings estimate by 3% for FY25, the firm expects the government to largely compensate BPCL for its LPG losses in the upcoming Union Budget.
On the other hand, Morgan Stanley remains positive, maintaining an ‘Overweight’ rating with a target price of Rs 419. The firm is optimistic about BPCL's potential to gain market share from private players. It also points to BPCL’s strategy of sourcing sulphur crude from the Middle East and the USA, along with the ongoing upgrade of the Bina refinery. Additionally, Morgan Stanley expects BPCL’s CNG entity to become EBITDA positive by FY26.
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BPCL Q3 earnings
BPCL posted a 20% year-on-year (YoY) increase in net profit for the December quarter, driven by higher margins. The company reported a consolidated net profit of Rs 3,805.94 crore for the October-December period of FY24, compared to Rs 3,181.42 crore in the same quarter last year. However, this result fell short
