Neutral on HPCL, target price Rs 277: Motilal Oswal

Motilal Oswal has neutral call on Hindustan Petroleum Corporation with a target price of Rs 277. The current market price of Hindustan Petroleum Corporation Ltd. is Rs 234.35.

Hindustan Petroleum Corporation Ltd., incorporated in the year 1952, is a Large Cap company (having a market cap of Rs 33797.46 Crore) operating in Gas & Petroleum sector.

Financials
For the quarter ended 31-12-2020, the company reported a Consolidated Total Income of Rs 69571.51 Crore, up 32.24 % from last quarter Total Income of Rs 52610.63 Crore and down -2.29 % from last year same quarter Total Income of Rs 71205.13 Crore. Company reported net profit after tax of Rs 2316.85 Crore in latest quarter.

Investment Rationale
HPCL is likely to see its net debt rise to INR634b by FY23, from INR392b in FY20, with projects such as the Vizag expansion and Rajasthan refinery. The brokerage also foresee challenges in the commissioning of the Vizag refinery.

Promoter/FII Holdings
Promoters held 51.6 per cent stake in the company as of Dec 30, 2020, while FIIs held 15.9 per cent, DIIs 20.8 per cent and public and others 11.7 per cent.