CLSA has upgraded Bharat Petroleum Corporation Limited (BPCL) from ‘Underperform’ to ‘Hold,’ setting a target price of ₹271.2 per share. This revision follows BPCL’s Q3FY25 financial results, which fell short of expectations due to weaker refining margins and an unexpected inventory expense. The company’s standalone net profit rose by approximately 37% year-over-year to ₹4,649 crore, though this was below analysts’ projections of ₹4,852 crore. Revenue from operations declined by about 2% to ₹1.28 trillion, impacted by a ₹7,229 crore loss stemming from the disparity between market-determined and subsidized LPG cylinder prices.
BPCL’s management anticipates that these losses will be largely compensated by the government in the forthcoming budget. Additionally, the company expects the share of Russian crude in its sourcing mix to decrease from 30% to 20% by March 2025, a transition deemed manageable. Following a recent correction, BPCL’s stock is trading near CLSA’s target price, prompting the upgrade from ‘Underperform’ to ‘Hold.’
