BPCL share price at Rs 265 or Rs 518? Targets for OMC stock post Q4 results

Bharat Petroleum Corporation Limited (BPCL) attracted neutral-to-positive recommendations from domestic and foreign brokerages following its March quarter results, with target prices ranging between Rs 265 and Rs 518 apiece. MOFSL maintained a 'Neutral' rating with a target price of Rs 265. Nuvama Institutional Equities cut its target price on the BPCL stock to Rs 277 from Rs 322, while retaining its 'Reduce' recommendation. Antique Stock Broking has assigned the highest Street target at Rs 518.

Emkay Global said BPCL's Q4 earnings beat estimates but lagged peers due to lower inventory gains. This brokerage maintained a 'Buy' rating with a target price of Rs 350. Among other brokerages, ICICI Securities maintained a 'Buy' rating with a target price of Rs 360, while HDFC Securities valued the stock at Rs 367. CLSA valued the stock at Rs 270, while UBS set a target price of Rs 365 on the oil marketing stock.

MOFSL said its target factors in weak near-term earnings outlook and rising capex intensity. It called BPCL's Q4 performance strong, led by marketing margin that stood at Rs 5.6 per litre against an estimate of Rs 1.3 per litre.  

"BPCL’s GRMs have been at a premium to SG GRMs because of the continuous
optimization of refinery production, product distribution, and crude procurement. The use of advanced processing capabilities of Bina and Kochi refineries allows BPCL to process 100 per cent of high-sulfur crude and 50 per cent of Russian crude. While valuation appears reasonable, weak near-term marketing outlook and the commencement of a new capex cycle emerge as key concerns," MOFSL said.

Nuvama said BPCL’s peak earnings may deteriorate amid a challenging scenario due to West Asia war and rising LPG losses. "High capex cycle to weigh on return ratios, making risk-reward unfavourable. We are slashing FY27/28E Ebitda by 19 per cent/18 per cent to factor in lower marketing margin, higher cost; ‘Reduce’ with a target of Rs 277 from Rs 332," it said.

Antique Stock Broking assumed June quarter for BPCL to be impacted from elevated crude prices, slashing its FY27 Ebitda estimates by 49 per cent. IT said FY28 earnings estimates for BPCL remained largely unchanged. 

"Bina petchem is delayed on geopolitics issues, but management sees no cost escalation. Key monitorables remain timely commissioning of Bina and Kochi petchem projects, and the Mumbai RUF (targeted for 2029), both being important margin drivers. Maintain BUY with a revised target of Rs 518/share, based on 6.5x FY28E EV/Ebitda," it said.