Hold BPCL, target price Rs 361: ICICI Securities

ICICI SecuritiesNSE 2.54 % has given a hold rating to Bharat Petroleum Corporation (BPCL) with a target price of Rs 361.

BPCL was in the red both on a consolidated and standalone basis in Q4FY20 and its FY20 consolidated and standalone recurring EPS is down 51-55 per cent year on year, both hit by inventory loss, according to the brokerage.

ICICI Securities expects BPCL’s first quarter of FY21E EPS to be up 122 per cent year on year, despite steep fall in throughput and sales volumes due to lockdown, boosted by record auto fuel marketing margins, higher GRM and inventory gain year on year. However, net marketing margin has turned negative (may remain so unless price hikes are made) and GRM has turned very weak, but large inventory gain in FY21E appears imminent. The brokerage says upside is likely if privatisation goes through.