HINDUSTAN PETROLEUM CORPORATION LIMITED

COMPANY PROFILE

Hindustan Petroleum Corporation Limited (HPCL) a Government of India undertaking and a Fortune 500 company, is a major integrated oil refining and marketing company in India. It is a Mega Public Sector Undertaking (PSU) with Navaratna status.

Hindustan Petroleum Corporation Limited (HPCL) accounts for about 20% of the market share in India among the PSUs. Hindustan Petroleum Corporation Limited operates with 2 refineries producing a wide variety of petroleum fuels & specialties, one at Mumbai (West Coast) having a capacity of 6.5 Million Metric Tonnes Per Annum (MMTPA) and the other in Vishakapatnam (East Coast) with a capacity of 8.3 MMTPA. HPCL also holds an equity stake of 16.95% in Mangalore Re- finery & Petrochemicals Limited (MRPL), a state-of-the-art refinery at Mangalore with a capacity of 9 MMTPA. In addi- tion, HPCL, in collaboration with M/s Mittal Energy Invest- ment Pte.Ltd. has set up a 9 MMTPA refinery at Bathinda, in the state of Punjab, as a Joint venture.

Hindustan Petroleum Corporation Limited (HPCL) owns the country's largest Lube Refinery with a capac- ity of 335,000 Metric Tonnes which amounts to 40% of the national capacity of Lube Oil production. Presently Hindustan Petroleum Corporation Limited (HPCL) pro- duces over 300+ grades of Lubes, Specialities and Greases.

STOCK INFORMATION

STOCK PRICE

572.30

TARGET PRICE

580-595

SECTOR

REFINERIES

SYMBOL (AT NSE)

HINDPETRO

ISIN

INE094A01015

FACE VALUE (IN RS.)

10.00

BSE CODE

500104

STOCK FUNDAMENTALS

MARKET CAP

19,379.64

BOOK VALUE

443.31

EPS - (TTM) (IN RS. CR.)

95.69

P/E

5.98

INDUSTRY P/E

14.38

INVESTMENT RATIONALE

The government’s move to announce a cut in diesel prices by Rs 3.4 per litre and deregulate diesel prices comes at the right time when there has been a sharp decline in crude oil prices. Diesel prices will be market determined at both retail and refinery gate level for all consumers. The move to de- regulate diesel prices will lead to a decline in crude oil gross under-recoveries, with only kerosene and LPG prices under the regulatory regime. The gross under-recoveries are now expected to decline from Rs 139869 crore in FY14 to Rs 83,326.5 crore in FY16E. ONGC, Oil India and PSU down- stream companies would be the key beneficiaries and may see a reduction in their net subsidy burden, going forward.

We expect more reforms from the government on the sub- sidy sharing mechanism, wherein lower subsidy burden needs to be set for upstream and downstream companies. We expect the decision on the subsidy sharing mechanism to come sooner than later, given the strong government and political sensitivity of the decision being the least. We expect net oil realisation for ONGC at $44.1/bbl, $45.5/bbl and $57.5/bbl for FY15E, FY16E and FY17E and for Oil India at $50.9/bbl, $53/bbl and $65/bbl for FY15E, FY16E and FY17E, respectively. OMCs also stand to benefit if they are able to increase their diesel marketing margins by Rs 0.5 per litre.

SHAREHOLDING PATTERN

HPCL IMG

RESULTS (Quarterly )(Rs CR.)

 

Jun 14

Mar' 14

Dec’13

Sep' 13

Jun’ 13

Sales

59,215.78

64,192.29

55,454.99

51,860.1

51,763.8

Operating profit

589.84

5,938.48

-930.71

1,014.21

-687.88

Interest

589.84

5,938.48

-930.71

1,014.21

-687.88

Gross profit

658.18

6,070.30

-1,177.36

861.49

-950.48

EPS (Rs)

1.36

136.11

-51.20

9.42

-43.13

TECHNICAL VIEW

HPCL TECH VIEW

HIND PETRO is looking strong on charts. We advise to buy around 550-560 with stoploss of 530 for the targets of 580-595 levels. RSI is also showing upside momentum in it on weekly charts.

SYMBOL

VALUE

ACTION

RSI(14)

71.036

BUY

STOCH(9,6)

69.105

BUY

STOCHRSI(14)

40.701

SELL

MACD(12,26)

-15.830

SELL

ADX(14)

48.510

BUY

WILLIAMS %R

-26.641

BUY

CCI(14)

102.6628

BUY

ATR(14)

5.9643

HIGH VOLATILITY

HIGH/LOWS(14)

11.2679

BUY

ULTIMATE OSCILLATOR

58.182

BUY

ROC

3.864

BUY

BULL/BEAR POWER()13

21.3820

BUY

BUY: 09 SELL:2 NEUTRAL: 0

SUMMARY : STRONG BUY

Our Other Recommendation for Next Week

SCRIP

ACTION

CMP

ENTRY

SL

TGT

TIME FRAME

TATA COMM

BUY

430.35

425-430

417

439-445

ONE WEEK

LUPIN

BUY

1429.85

1400-1420

1375

1450-1480

ONE WEEK

BHEL

SELL

246.95

246-250

259

242-234

ONE WEEK

UCO BANK

SELL

83.55

85-87

90

82-80

ONE WEEK

SUNPHARMA

BUY

895.75

880-890

858

915-935

ONE WEEK

Performance of Previous Week

SCRIP

LOT

ACTION

ENTRY

SL

TGT

P&L

REMARK

CLOSE/LOW/HIGH

CANARA BANK

1000

BUY

400-408

385

419-440

18000.00

NEAR TGT

406.25 / 418.40

REL INFRA

500

BUY

620-640

600

655-675

7500.00

FIRST TGT HIT

633.50 / 660.60

TATA STEEL

500

BUY

490-500

475

510-525

-7500.00

SL HIT

474.15 / 497.40

BHARAT FORGE

1000

BUY

805-815

790

830-850

40000.00

BOTH TGT HIT

841.45 / 857.00

L&T

250

BUY

1640-1670

1600

1695-1740

10000.00

FIRST TGT HIT

1659.05 / 1696.85

HINDALCO

2000

BUY

162-165

156

170-175

-12000.00

SL HIT

157.10 / 166.95

NET PROFIT

 

 

 

 

 

56000.00

 

 

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DISCLAIMER

This report is only for the information of our customers. Recommendations, opinions, or suggestions are given with the understanding that readers acting on this information assume all risks involved. The information provided herein is not to be construed as an offer to buy or sell securities of any kind. ATS and/or its group companies do not as assume any responsibility or liability resulting from the use of such information.

 

 

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