BPCL & HPCL Stocks Surge 5% After Q4 Earnings: Expert Analysis on Investing in these Coins (BPCL, HPCL)

• Shares of Bharat Petroleum Corporation (BPCL) and Hindustan Petroleum Corporation (HPCL) experienced significant increases, following in-line performance reports for the March quarter and the full fiscal year FY24.
• BPCL and HPCL’s improved performance was largely due to a nearly two-year-long freeze in petrol and diesel prices, despite the rise in crude oil prices following Russia’s invasion of Ukraine in 2022.
• Both companies have announced bonus share issues and declared dividends, with BPCL’s board approving a 1:1 bonus issue and HPCL announcing a bonus issue in the ratio of 1:2.

BPCL and HPCL shares surge following strong FY24 performance and announcement of bonus shares and dividends. The companies’ performance was bolstered by a freeze in petrol and diesel prices.

BPCL and HPCL Shares Surge

Shares of Bharat Petroleum Corporation (BPCL) and Hindustan Petroleum Corporation (HPCL) saw notable surges of 5% and 2.6% respectively, with their shares reaching ₹621.95 and ₹514.40 apiece. This uptick followed both companies reporting in-line performance for the March quarter and for the full fiscal year FY24.

Improved Performance Due to Price Freeze

The improvement in performance for both companies stemmed from the nearly two-year-long freeze in petrol and diesel prices. Although the freeze was impacted by the rise in crude oil prices following Russia’s invasion of Ukraine in 2022, international rates moderated for much of 2023. This trend allowed companies to secure substantial profits.

Announcement of Bonus Shares and Dividends

BPCL and HPCL have announced bonus share issues and declared dividends. BPCL’s board approved a 1:1 bonus issue, with a record date set for June 22, 2024. They also recommended a final dividend of ₹21 per equity share (pre-bonus), subject to shareholder approval. Similarly, HPCL announced a bonus issue in the ratio of 1:2, with a record date of June 21, 2024.

Buy Ratings Maintained by Citi

Global brokerage firm Citi maintained its ‘buy’ rating on BPCL with a target price of 760 apiece, while it also maintained a ‘buy’ call on HPCL but cut the target price to 630 apiece.

Conclusion

BPCL and HPCL’s strong performance in FY24, bolstered by a freeze in petrol and diesel prices, has led to a surge in their shares. The announcement of bonus shares and dividends further adds to the companies’ appeal. However, investors are advised to consult with certified experts before making any investment decisions.