HINDPETRO - Fundamental Analysis

Last Updated Time : 02 Aug 25, 12:58 am

Fundamental Rating: 3.9

🧾 Core Financial Analysis

📈 Profitability & Growth

PAT Qtr: ₹3,415 Cr vs ₹2,544 Cr — ↑26.1% QoQ growth, solid earnings momentum.

EPS: ₹31.7 — decent, supports valuation.

ROE (13.7%) & ROCE (10.5%) — moderate returns, typical for oil marketing companies.

💰 Cash Flow & Debt

Debt-to-Equity: 1.38 — high leverage, common in capital-intensive sectors but still a concern.

Dividend Yield: 2.47% — attractive for income investors.

Cash Flow: Likely stable, but sensitive to crude prices and refining margins.

📊 Valuation Metrics

Metric Value Insight

P/E Ratio 13.4 Undervalued vs industry PE of 21.6

P/B Ratio ~1.78 Reasonable, near fair value

PEG Ratio -6.31 Negative due to erratic earnings — not reliable

Intrinsic Value Estimated ~₹440–₹470 Based on earnings and sector multiples

🛢️ Business Model & Competitive Advantage

Sector: Oil & gas — Hindustan Petroleum Corporation Ltd is a major PSU in refining and fuel retail.

Operations: Refining, marketing, and distribution of petroleum products.

Moat: Strong distribution network, government backing, and strategic assets.

Growth Drivers: Fuel demand recovery, refining margin improvement, and infrastructure expansion.

Risks: Crude price volatility, regulatory controls, and subsidy burdens.

📉 Technical & Sentiment Indicators

RSI: 48.6 — neutral zone, no strong momentum.

MACD: 2.06 — mildly bullish.

DMA 50 & 200: Price above both — positive trend.

Volume: Above average — suggests accumulation interest.

💡 Investment Guidance

📌 Entry Zone (If Undervalued)

₹400–₹420 — attractive zone near DMA levels and intrinsic value.

Accumulate on dips with confirmation of volume and RSI support.

📈 Long-Term Holding View

Moderate buy for value and income investors.

Reasonable valuation, strong dividend yield, and improving profitability.

Hold with a 2–3 year horizon for potential upside toward ₹480–₹500, especially if refining margins remain favorable.

Would you like a comparison with IOC or BPCL to evaluate PSU oil marketing dynamics?

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