HINDPETRO - Investment Analysis: Buy Signal or Bull Trap?

Last Updated Time : 05 Nov 25, 7:43 am

Investment Rating: 4.5

Hindustan Petroleum (HINDPETRO) is a strong long-term candidate with attractive valuation, high earnings growth, and solid dividend yield. Ideal entry zone: ₹440–₹460.

Positive

• Low P/E of 7.02 vs industry average of 21.4 indicates undervaluation.
• PEG ratio of 1.27 suggests fair valuation relative to growth.
• EPS of ₹68.5 and quarterly profit surge of 507% reflect strong earnings momentum.
• Dividend yield of 2.23% provides stable income for long-term holders.
• ROE of 16.9% and ROCE of 11.8% show decent capital efficiency.
• MACD (10.8) and RSI (69.4) indicate bullish technical momentum.
• FII holding increased by 0.93%, signaling rising foreign investor confidence.

Limitation

• Debt-to-equity ratio of 1.16 reflects high leverage typical of oil marketing companies.
• DII holding dropped by 0.92%, indicating cautious domestic sentiment.
• Trading near 52-week high (₹487), limiting short-term upside.

Company Negative News

• Q2 PAT declined from ₹4,371 Cr. to ₹3,830 Cr., indicating short-term volatility.

Company Positive News

• Q2 FY26 net profit surged 2,605% YoY to ₹3,859 Cr., signaling strong recovery in refining margins

  MarketsMojo.com

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• Brokerages project 13–16% upside in the next 4 weeks due to technical breakout above ₹480

  BW Businessworld

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• Stock gained for three straight sessions, outperforming Nifty and Nifty Energy indices

  Business Standard

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Industry

• Oil marketing companies benefit from refining margin recovery and stable crude prices.
• HINDPETRO trades at a discount to industry P/E (21.4), offering valuation comfort.

Conclusion

• HINDPETRO is a fundamentally strong stock with attractive valuation, strong earnings, and decent dividend yield.
• Ideal entry zone: ₹440–₹460, near DMA 50 and below recent highs.
• If already holding, maintain a 3–5 year horizon to benefit from refining margin recovery and dividend income.
• Exit strategy: Monitor crude price trends and quarterly earnings; consider trimming if debt rises or margins weaken.

Sources

BW Businessworld

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