Shares of Indian Oil Corporation (IOC), Hindustan Petroleum Corporation (HPCL) and Bharat Petroleum Corporation (BPCL) rose 3-8 percent intraday on September 23 after Credit Suisse raised the target price but maintained underperform rating.
BPCL has touched 52-week high of Rs 439.55.
Credit Suisse raised target of BPCL to Rs 320 from Rs 300 per share on the back of corporate tax rate cut.
However, the high capex cycle was still leading to a debt increase. It raised FY21 & FY22 EPS by 12% and FY20 higher at 32 percent.
On HPCL, the global brokerage raised target price to Rs 260 from Rs 250 per share and also raised EPS estimates by 12-18% for FY20-22.
The current effective tax rate was 35%, which would be reduce to 25% and would result in higher cash flows and partly reduce debt requirement, it added.
The target price on IOC was raised to Rs 120 from Rs 115 per share and EPS estimates increased by 11-16% for FY20-22.
The view is cautious on high supply pressure in refining and heavy capex cycle, said Credit Suisse.
Indian Oil Corporation was quoting at Rs 138.30, up 4.34 percent, Hindustan Petroleum Corporation at Rs 282.10, up 1.66 percent, and Bharat Petroleum Corporation was up 6.21 percent at was quoting at Rs 428.70 on the BSE.
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