Prefer BPCL among OMCs, keep TP unchanged at Rs 544
Q4 EPS surge driven by inventory gain: Standalone Q4FY21 recurring profit stood at Rs 48.8billion vs loss of Rs 877million in Q4FY20 driven by 1) crude and product inventory gain of Rs 36.4billion vs loss of Rs 49billion in Q4FY20; 2) 17% YoY fall in interest cost (debt is down 37% YoY but up 7% QoQ to Rs 263billion in end-Mar’21); and 3) 44% YoY rise in other income due to forex gain vs loss in Q4FY20. Reported GRM at $6.64/bbl was up 8.9x YoY while core GRM at $2.46/bbl was down 67% YoY. Net marketing margin was down 61% YoY to Rs 1.2/l. Excluding inventory gain/loss, Q4 standalone EPS is down 41% YoY. Consolidated recurring Q4 profit stood at Rs 58billion vs loss of Rs 3.6billion in Q4FY20; share of profit from JV/associates is up 66% YoY. FY21 standalone and consolidated recurring EPS were up 4.2x and 3.9x YoY.
