BPCL Share price: Jefferies Reiterate Buy rating with target of Rs 500
BPCL (Bharat Petroleum) sold its stake in Numaligarh refinery for Rs 99 bn, higher than estimate by Jefferies of Rs 84bn. The positive surprise is 1.5% of BPCL's current market cap. After paying capital gains tax (Rs 9.4bn calc) it could use the proceeds to pay for the equity stake purchase in BORL and pay out the rest as one time dividend (Rs 30/shr calc). Or it could use it to retire long term debt and add 4% to annual PBT. Jefferies Reiterate Buy with price target of Rs 500.
The majority stake in NRL was sold at 7x FY21E EV/EBITDA, higher than our estimate (6x) and in line with our target valuation multiple for BPCL standalone entities refineries at Mumbai and Kochi: Reuters