Buy Hindustan Petroleum Corporation, target price Rs 350 : Prabhudas Lilladher

Prabhudas Lilladher has buy call on Hindustan Petroleum Corporation with a target price of Rs 350. The current market price of Hindustan Petroleum Corporation is Rs 248.

Hindustan Petroleum Corporation, incorporated in the year 1952, is a Large Cap company (having a market cap of Rs 35172.91 Crore) operating in Gas & Petroleum sector.

Hindustan Petroleum Corporation key Products/Revenue Segments include Refinery, Rent and Other Operating Revenue for the year ending 31-Mar-2022.

Financials
For the quarter ended 30-09-2022, the company has reported a Consolidated Total Income of Rs 108742.66 Crore, down -5.31 % from last quarter Total Income of Rs 114835.41 Crore and up 23.45 % from last year same quarter Total Income of Rs 88085.42 Crore. Company has reported net profit after tax of Rs -2219.72 Crore in latest quarter.

The company’s top management includes Mr.Pushp Kumar Joshi, Mr.Sunil Kumar, Mr.Nagaraja Bhalki, Mr.Ramdarshan Singh Pal, Mr.Vivekananda Biswal, Mr.Bechan Lal, Mrs.Vimla Pradhan, Mr.Rajneesh Narang, Mr.Vinod S Shenoy, Mr.Pankaj Kumar. Company has CNK & Associates LLP as its auditors. As on 30-09-2022, the company has a total of 142 Crore shares outstanding.

Investment Rationale
The brokerage has upgraded HPCL to a buy from Hold earlier as it increased its earnings estimates for the company factoring higher marketing margins and lower operating expense. Prabhudas Lilladher values the stock at 7x EV/E FY24E and at a price target of Rs 350(Rs195 earlier) it will trade at 1.2x P/BV FY24E.

"HPCL is most leveraged to recoverin marketing margins, as marketing volumes are 2x refining capacity. The counter is its preferred pick among OMCs," noted the brokerage.

Promoter/FII Holdings
Promoters held 54.9 per cent stake in the company as of 30-Sep-2022, while FIIs owned 18.21 per cent, DIIs 17.98 per cent.