HPCL Share Price Rises Despite Below-Expected Q3 Results

HPCL Share Price Rises Despite Below-Expected Q3 Results

VoM News Desk | January 29, 2024 | 11:33 AM IST | Breaking News | Follow on Google News

HPCL Share Price Rises Despite Below-Expected Q3 Results

HPCL Share Price Rises Despite Below-Expected Q3 Results

Despite Hindustan Petroleum Corporation (HPCL) reporting Q3 numbers below street estimates, the company’s share price witnessed a rise of over 3% during Monday’s trading session. The weaker-than-expected marketing margins were the primary reason for the shortfall, as indicated by Kotak Institutional Equities. Despite the Q3 performance, HPCL has shown robust results for the first nine months of FY24, showcasing an improved net worth and reduced debt levels.

HPCL’s share price opened at ₹434.95 on BSE, reaching an intraday high of ₹444.45 and an intraday low of ₹430.50. Analysts suggest that despite recent volatility, the stock has started on a positive note.

Analyst Recommendations and Targets

• Kotak Institutional Equities has raised its FY2024E EBITDA by 3%, resulting in a higher fair value (FV) of ₹360 (from ₹310). The brokerage maintains a “SELL” rating, expressing concerns about the recent strong run-up in HPCL’s stock.
• Motilal Oswal Financial Services states that HPCL’s 3QFY24 EBITDA estimate was not met due to a lower-than-expected marketing margin. However, they suggest an upgrade to “BUY” owing to factors like the commissioning of increased capacity at the Vizag refinery and the demerger of the lubricant business.
• Nuvama Institutional Equities maintains a “HOLD” rating, stating that the company’s risk-reward appears less favorable despite a couple of strong quarterly performances. They have hiked FY25E/26E EBITDA and the target price to ₹450.

Q3FY24 Results and Financial Performance

HPCL reported a net profit of ₹529 crore for Q3FY24, marking a sharp decline of 89.6% from ₹5,118 crore in the September quarter. On a YoY basis, net profit increased by 207% from ₹172 crore in the year-ago quarter. The company’s revenue from operations rose 16% sequentially to ₹1.11 lakh crore in Q3FY24.

Market Outlook and Technical Analysis

Despite the positive start, market experts anticipate tentative price movements and potential selling at ₹450 levels. Rajesh Bhosale, Equity Technical and Derivative Analyst at Angel One, suggests that prices may remain tentative at higher levels and could see selling pressure at ₹450, with a near-term correction towards ₹410.

VoM News Desk

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