External broker reports(aggregated public sources), HDFC Securities

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External broker reports(aggregated public sources)

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Equity Bottom-Up

<ul><li>Bharat Petroleum Corporation (BPCL) stock has rallied ~35% and has outperformed the Sensex by ~26% over the last 3M, driven by improving auto fuel marketing margins as Brent crude price declined by ~20% to USD 76/bbl over the same period and strong refining margins as diesel and jet fuel crack spreads averaged USD 23-24/bbl.</li><li>We downgrade BPCL to a REDUCE from a BUY, with a target price of INR 475/sh, owing to the risk of (1) lower auto-fuel marketing margins because of either a bounce-back in crude oil price or retail price cuts ahead of general elections and (2) moderation in refining margins.</li><li>Refining margin could moderate from recent highs on new supply: The ramp-up of &gt;1.2mbpd of new refining capacity in the Middle East and China over the next few months could adversely impact the higher-than-average transportation fuel crack spreads in the near/medium term, negatively impacting contribution from refining for BPCL.</li></ul>Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.

Bharat Petroleum Corporation (BPCL) stock has rallied ~35% and has outperformed the Sensex by ~26% over the last 3M, driven by improving auto fuel marketing margins as Brent crude price declined by ~20% to USD 76/bbl over the same period and strong refining margins as diesel and jet fuel crack spreads averaged USD 23-24/bbl.We downgrade BPCL to a REDUCE from a BUY, with a target price of INR 475/sh, owing to the risk of (1) lower auto-fuel marketing margins because of either a bounce-back in crude oil price or retail price cuts ahead of general elections and (2) moderation in refining margins.Refining margin could moderate from recent highs on new supply: The ramp-up of &gt;1.2mbpd of new refining capacity in the Middle East and China over the next few months could adversely impact the higher-than-average transportation fuel crack spreads in the near/medium term, negatively impacting contribution from refining for BPCL.Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.

BPCL: Unfavourable risk-reward. Downgrade to REDUCE

Senior Credit Analyst, Lucror Analytics

Trung Nguyen

Senior Credit Analyst

High Yield Experts

Lucror Analytics

Lucror Analytics is a leading credit and ESG research specialist and a provider of technology solutions for differentiated fixed income strategies. Our roots are in bottom-up fundamental credit analysis with a specialization in high yield corporate credits from Europe, Asia and Latin America. We are one of few research specialists integrating ESG considerations with fundamental credit research through a dedicated ESG platform. Our ESG assessment covers five key criteria: Disclosure, E,S, & G Pillars, Controversies, ESG Impact on Credit and ESG Momentum.

Recognizing the importance and value-add of Factor Investing in fixed income, Lucror developed the Smart Quant Navigator (SQN), an intuitive platform that helps clients devise and implement factor-based strategies ranging from pure quant to active fundamental, with integrated ESG.

Our company has been at the forefront of developments in the fixed income markets, identifying opportunities and consistently delivering new products and value-adding solutions to clients. Lucror has close relationships with the largest and most reputable asset managers, family offices, hedge funds, investment and wealth managers globally.

Lucror Analytics' ESG Scores are based on a 3-tiered scale and are adjusted for Controversies (if applicable). We view Bharat Petroleum's ESG as "Adequate", in line with its Environmental, Social and Governance scores. Controversies are "Material", but Disclosure is "Adequate".

Lucror Analytics' ESG Scores are based on a 3-tiered scale and are adjusted for Controversies (if applicable).  We view Bharat Petroleum's ESG as "Adequate", in line with its Environmental, Social and Governance scores. Controversies are "Material", but Disclosure is "Adequate". 

Bharat Petroleum - ESG Report - Lucror Analytics

Leonard Law, CFA

Credit

Lucror Analytics Weekly Wraps provide an overview of all Morning Views comments and reports published by our analyst team in the past week, and also showcase a list of the most-read reports.In this Insight:<ol><li><a href='/entities/central-china-real-estate-ltd' target='_blank' rel='noopener'>Central China Real Estate</a></li><li><a href='/entities/sino-ocean-group-holding-limited' target='_blank' rel='noopener'>Sino-Ocean Group</a></li><li><a href='/entities/china-jinmao-holdings-group' target='_blank' rel='noopener'>China Jinmao Holdings</a></li><li><a href='/entities/lifestyle-international-holdings-ltd' target='_blank' rel='noopener'>Lifestyle International Holdings</a></li><li><a href='/entities/geely-automobile-holdings-ltd' target='_blank' rel='noopener'>Geely Auto</a></li></ol>and more...

Lucror Analytics Weekly Wraps provide an overview of all Morning Views comments and reports published by our analyst team in the past week, and also showcase a list of the most-read reports.In this Insight:Central China Real EstateSino-Ocean GroupChina Jinmao HoldingsLifestyle International HoldingsGeely Autoand more...

Lucror Analytics Morning Views comprise our fundamental credit analysis, opinions and trade recommendations on high yield issuers in the region, based on key company-specific developments in the past 24 hours. Our Morning Views include a section with a brief market commentary, key market indicators and a macroeconomic and corporate event calendar.<ul><li><a href='#lucror-entity-10222'>Bharat Petroleum Corp</a></li><li><a href='#lucror-entity-26970'>Meituan</a></li><li><a href='#lucror-entity-36725'>Pertamina Geothermal Energy</a></li></ul>

Lucror Analytics Morning Views comprise our fundamental credit analysis, opinions and trade recommendations on high yield issuers in the region, based on key company-specific developments in the past 24 hours. Our Morning Views include a section with a brief market commentary, key market indicators and a macroeconomic and corporate event calendar.Bharat Petroleum CorpMeituanPertamina Geothermal Energy

Morning Views Asia: Bharat Petroleum Corp, Meituan, Pertamina Geothermal Energy

<ul><li>Bharat Petroleum Corporation (BPCL) has outperformed the Sensex by ~8% over the last 6M, driven by improving auto fuel marketing margins as Brent crude price declined by ~11% over the same period</li><li>We upgrade BPCL to a BUY, with a target price of INR 442/sh, owing to robust gross refining margins (GRMs), the sharp recovery in auto-fuel gross marketing margins owing to the decline in crude oil prices, and the reduction in LPG under-recoveries</li><li>Despite a rise in working capital requirement and higher capex in FY23, BPCL’s net debt/equity remains comfortable at 0.9x, which we expect will decline to 0.7x by FY25, even with a higher capex run rate of INR ~130bn over FY24/25.</li></ul>Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.

Bharat Petroleum Corporation (BPCL) has outperformed the Sensex by ~8% over the last 6M, driven by improving auto fuel marketing margins as Brent crude price declined by ~11% over the same periodWe upgrade BPCL to a BUY, with a target price of INR 442/sh, owing to robust gross refining margins (GRMs), the sharp recovery in auto-fuel gross marketing margins owing to the decline in crude oil prices, and the reduction in LPG under-recoveriesDespite a rise in working capital requirement and higher capex in FY23, BPCL’s net debt/equity remains comfortable at 0.9x, which we expect will decline to 0.7x by FY25, even with a higher capex run rate of INR ~130bn over FY24/25.Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.

India

Bharat Petroleum Corporation Limited explores for and refines crude oil. The Company manufactures petroleum, petroleum products, lubricants, liquefied petroleum gas, aromatics like benzene and toluene, and other related products. Bharat has retail outlets throughout the country.

Bharat Petroleum Corp (BPCL IN)

BPCL: Unfavourable risk-reward. Downgrade to REDUCE

Bharat Petroleum Corporation (BPCL) stock has rallied ~35% and has outperformed the Sensex by ~26% over the last 3M, driven by improving auto fuel...

HDFC Securities

Bharat Petroleum - ESG Report - Lucror Analytics

Lucror Analytics' ESG Scores are based on a 3-tiered scale and are adjusted for Controversies (if applicable). We view Bharat Petroleum's ESG as...

Lucror Analytics

Weekly Wrap - 30 Jun 2023

Lucror Analytics Weekly Wraps provide an overview of all Morning Views comments and reports published by our analyst team in the past week, and...

Lucror Analytics

Morning Views Asia: Bharat Petroleum Corp, Meituan, Pertamina Geothermal Energy

Lucror Analytics Morning Views comprise our fundamental credit analysis, opinions and trade recommendations on high yield issuers in the region,...

Lucror Analytics

BPCL: Improving outlook, upgrade to BUY

Bharat Petroleum Corporation (BPCL) has outperformed the Sensex by ~8% over the last 6M, driven by improving auto fuel marketing margins as Brent...

HDFC Securities