MOSL: HPCL (Neutral)-Reinforced by enhanced marketing segment performance
HPCL: Reinforced by enhanced marketing segment performance
(HPCL IN, Mkt Cap USD6.4b, CMP INR294, TP INR309, 5% Upside, Neutral)
- EBITDA increased 55% YoY to INR46.6b (75% above our estimate) in 4QFY19, supported by an inventory gain of INR9.2b (v/s a gain of INR1.6b in 4QFY18 and a loss of INR34.7b in 3QFY19). Core GRM shrank 68% YoY (-79% QoQ) to USD2.1/bbl (22% miss), resulting in core EBITDA of INR37.5b (+31% YoY, -2% QoQ). HPCL recorded a forex gain of INR5b v/s a loss of INR0.8b in 4QFY18 and a gain of INR0.9b in 3QFY19. PAT was up 70% YoY at INR29.7b in the quarter.
- Reported GRM was at USD4.5/bbl (v/s USD7.1 in 4QFY18 and USD3.7 in 3QFY19). Refining throughput was flat YoY/QoQ at 4.6mmt.
- Marketing sales volume grew 7% YoY (4%QoQ) to 10.1mmt in 4QFY19. Implied gross marketing margin (incl. inventory) stood at INR5.9/lit (v/s INR4.4 in 4QFY18 and INR3.3 in 3QFY19).
- EBITDA was at INR107.1b (+9% YoY) in FY19 v/s INR98.5b in FY18. PAT fell ~5% YoY to INR60.3b in the year due to higher interest/depreciation cost.
Hindustan Petroleum is engaged in the refining and marketing of petroleum products. Co. operates 2 major refineries producing a wide variety of petroleum fuels & specialties, one in Mumbai (West Coast) of 6.5 Million Metric Tons Per Annum (MMTPA) capacity and the other in Vishakapatnam, (East Coast) with a capacity of 8.3 MMTPA. Co. also owns and operates a Lube Refinery producing Lube Base Oils of international standards, with a capacity of 428 TMT. Co.'s marketing network is facilitated by a Supply & Distribution infrastructure comprising Terminals, Pipeline networks, Aviation Service Stations, LPG Bottling Plants, Inland Relay Depots & Retail Outlets, Lube and LPG Distributorships.
Motilal Oswal Financial Services Ltd. is a reputed name in Financial Services and Online Trading with group companies providing services such as Private Wealth Management, Retail Broking and Distribution, Institutional Broking, Asset Management, Investment Banking, Private Equity, Commodity Broking, Currency Broking, Principal Strategies & Home Finance.
Motilal Oswal Securities is a group company of Motilal Oswal Financial Service Limited which started as a stock trading company and has blossomed into well diversified firm offering a range of financial products and services. Motilal Oswal has built a reputation as the source for best stock trading company and this has taken a wealth of experience, knowledge and expertise, constantly working in tandem, over the years.
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