HINDPETRO - Fundamental Analysis: Financial Health & Valuation

Last Updated Time : 19 Sept 25, 2:16 pm

🧠 My Thought Process

You're looking for a deep dive into Hindustan Petroleum Corporation Ltd (HINDPETRO), with a numeric rating and strategic guidance. I see you're focused on long-term fundamentals, valuation, and timing an entry. Given the PSU nature and cyclical oil dynamics, I’ll weigh profitability, capital efficiency, valuation, and sector outlook to give you a clear verdict.

📊 Fundamental Analysis of Hindustan Petroleum

🔍 Core Financials

Profitability

PAT Qtr: ₹4,371 Cr vs ₹3,355 Cr — explosive growth (↑1,128%), driven by improved refining margins and marketing spreads.

EPS: ₹53.5 — robust earnings base.

ROE: 16.9%, ROCE: 11.8% — decent, but not exceptional for capital-intensive sector.

Leverage & Liquidity

Debt-to-equity: 1.47 — high, typical for oil PSUs; manageable but worth monitoring.

Dividend Yield: 2.57% — attractive for income investors.

Cash Flow

Strong operating cash flows, supported by government LPG subsidy and Russian crude discounts

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Capex remains elevated due to refinery upgrades and retail expansion.

📉 Valuation Indicators

Metric Value Interpretation

P/E Ratio 7.64 Deeply undervalued vs industry PE of 17.4

P/B Ratio ~1.89 Reasonable given asset-heavy model

PEG Ratio 1.38 Fairly valued based on growth

Intrinsic Value ~₹440–₹460 Slight upside from current price

🛢️ Business Model & Competitive Edge

Segment Leadership: One of India’s top three oil marketing companies (OMCs), with strong refining and retail footprint.

Moat: Government backing, strategic crude sourcing (Russian discounts), and LPG subsidy support

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Growth Drivers

Expansion of retail outlets and refining capacity.

EV charging infrastructure and biofuel initiatives.

Improved ROCE trend — now at 16%, above industry average

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📈 Technical & Entry Guidance

Current Price: ₹409

DMA 50/200: ₹401 / ₹389 — bullish crossover.

RSI: 60.4 — neutral to bullish.

MACD: 0.20 — mild positive momentum.

🎯 Entry Zone

Ideal Buy Range: ₹390–₹405 — near DMA support.

Stop Loss: ₹375

Target: ₹455–₹470 in medium term

🕰️ Long-Term Holding Outlook

Hold if invested: Strong earnings rebound and undervaluation support long-term holding.

Buy on dips: Especially near ₹400 zone.

Growth Triggers: Crude sourcing strategy, subsidy inflows, and retail expansion.

⭐ Fundamental Rating

4.4

Let me know if you’d like a peer comparison with BPCL or IOCL next!

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