BPCL stock poised for gains as Citi anticipates reversal in key metrics

Published 20/08/2024, 08:46
BPCL stock poised for gains as Citi anticipates reversal in key metrics

Tuesday, on Citi reiterated its Buy rating on Bharat Petroleum Corp. (BPCL:IN) stock with a price target of INR380.00.

The firm's analyst pointed out that while the three Oil Marketing Companies (OMCs) have seen significant outperformance against the broader market year-to-date, with gains ranging from 17% to 37%, this surge was primarily concentrated at the beginning of the year. In the past six months, however, these companies have experienced a downturn, with performance declines between 9% and 21%.

The underperformance has been attributed to a combination of factors, including soft Gross Refining Margins (GRMs), weakened marketing margins following a fuel price reduction before the general elections, and a subdued first-quarter performance. Citi's analysis suggests that these adverse conditions are now reversing.

Citi has initiated a 90-day Positive Catalyst Watch on BPCL, indicating an optimistic outlook for the stock in the near term. The firm's forecasts for Bharat Petroleum's earnings for the fiscal years 2025 and 2026 remain approximately 15-20% higher than the consensus. Additionally, the dividend yield, which is expected to be between 4% and 5%, is seen as a supportive factor for the stock's valuation.

Investors and market watchers are keeping a close eye on BPCL as it navigates through the changing market dynamics. The Positive Catalyst Watch suggests potential for the stock's performance to improve in the coming months, which could be a significant development for shareholders and the company alike.

This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.

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