Medium-term prospects bright despite the near-term blip

29 Jan 2024
5 Min read 
  • HPCL's 3QFY24 earnings were impacted by lower-than-expected marketing margins and inventory loss.
  •  Refinery throughput was in line with expectations, and the company expects to increase refining throughput in FY24.
  •  Sales volumes in the marketing segment exceeded estimates, and OMCs are generating strong gross marketing margins.
  •  The demerger of the lubricant business provides a value-unlocking opportunity.
  •  HPCL's near-term prospects are bright despite the temporary setback, leading to an upgrade to a BUY rating.
  •  The stock is valued at 1.3x Dec25 P/BV, with a target price of INR530.
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