HPCL
Reco Price: Rs 361
Target price: Rs 470
Upside: 21.25%
Brokerage: Anand Rathi Financial Services

Recent statements from the government (specifically, the Ministry of Petroleum and Natural Gas) have been positive, indicating the possibility where OMCs might not have to bear any subsidy. Also, brokerages expect lower crude/product prices in months ahead and subsequent lower debt load.

With the steep fall in crude prices and lower product prices, the working capital requirements and debt load of HPCL have fallen sharply compared to FY09. These along with lower interest cost should help the company to report improved profitability. This is also a reason that the brokerage forecast a 92 per cent y-o-y jump in FY10E EPS over FY09 to Rs 42.6, on the back of lower under-recoveries (partially on cooking fuels), lower interest costs and inventory gains. The brokerage recommended the stock at Rs 361 and raised its target price to Rs 470, which is based on 50 per cent historical discount to Sensex PE of 17 times and value of its investments in MRPL, at a 25 per cent of holding company discount.

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Price Information
Open    279.90
High    289.25
Low    279.90
Last Price    286.75
Prev. Close    280.05
Change    6.70
% Change    2.39
Average Price    286.70
Total traded quantity    376761
Turnover in Rs.Lakhs    1080.1

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HPCL Q3 Standalone Net Sales at Rs 29,386.67 Cr Vs Rs 27,117.01 Cr(YoY); Standalone Net Loss at Rs 422.03 Cr Vs Net Loss of Rs 15.73 Cr(YoY)

HPCL : Rs.270.85 (closing Price) down by Rs 8.00

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