Buy Stocks of BPCL on dips for medium term time period. The stock analysis based on BPCL’s 3QFY12 results gives rationale behind this recommendation.
As everybody knows, huge chunk of revenue and profit for BPCL (Bharat Petroleum Corporation Limited) depends on subsidy that Government of India (GOI) allocates to it for petroleum products. This allocation from GOI has increased and due to this, BPCL reported 3QFY12 profit of Rs.3140 crores.
For 4QFY12, BPCL is expected to receive compensation from GOI on account of under-recoveries by downstream companies.
BPCL had reported Gross Refining Margin (GRM) of US $1.6/barrel in previous quarter. In 3QFY12, this GRM has improved to US $3.5/ barrel. It is a big improvement.
BPCL is also involved into E&P (exploration & production) business and it is certainly exciting looking at its prospects. Currently BPCL is involved in E&P in Brazil and Mozambique and it is expected that these activities will see more appraisal and exploration work in FY12.
It is expected that GOI will increase prices of Petrol and Diesel after assembly elections are over in Uttar Pradesh and other states (populist measures by corrupt government to play elections!). This will further help BPCL in improving its bottom line.
BPCL would be one of the better stocks to buy in Petroleum sector. One may buy stocks on dips from current stock price of Rs.659 for medium term. The target stock price over one year could be around Rs.750.
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Stock Analysis - Bharti Airtel
Stock Analysis – ONGC
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Showing posts with label Blue Chip Stocks. Show all posts
Showing posts with label Blue Chip Stocks. Show all posts
Stock Analysis - Bharti Airtel
Stock price target based on Bharti Airtel’s 3QFY12 results. The stock had a run from 320 to 400 and then back to 360 in past 2 months in line with run up of Indian stock markets. One may still buy stocks of Bharti Airtel but the stock price target will not be a significant upside from one year point of view.
Bharti Airtel had reported disappointing numbers for 3QFY12 because of weak minutes of usage (MoU) and several one offs, which hit revenue and cost. However, strong ARPM growth is the key positive for the quarter. Revenue from African operations was in line but margins remained under pressure.
As we all are witnessing Telecom spectrum scam and court orders of license suspension, telecom as industry is expected to consolidate from here. Also, Indian consumers are moving towards smart phone technology to use data on phones and this data usage will increase with time. Telecom players like Bharti Airtel would be big beneficiaries of this data usage growth and telecom sector consolidation.
Bharti has growth prospects in terms of 3G spectrum, DTH, African company it took over and potential growth in markets which are under penetrated.
With no doubt, Bharti Airtel is the best stock to buy from telecom sector in India with stable business and good balance sheet numbers. The target stock price for Bharti Airtel over the one year time period would be around Rs.400. One who is looking for moderate appreciation with less volatility and least risk in stock markets may buy stocks of Bharti Airtel.
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Stock Analysis – ONGC
Union Bank – Stock Analysis with Target Stock Price
Share Market Stock Tips - Buy Stocks of Chambal Fertilisers
Free Stock Market Tips – Buy HDIL for short term
Blue Chip Stock Analysis - Infosys
Large Cap Stock To Buy - Dr. Reddy’s Laboratories
Buy Stocks of Bank of Baroda
IRB Infra – Stock Analysis and Result Update
Bharti Airtel had reported disappointing numbers for 3QFY12 because of weak minutes of usage (MoU) and several one offs, which hit revenue and cost. However, strong ARPM growth is the key positive for the quarter. Revenue from African operations was in line but margins remained under pressure.
As we all are witnessing Telecom spectrum scam and court orders of license suspension, telecom as industry is expected to consolidate from here. Also, Indian consumers are moving towards smart phone technology to use data on phones and this data usage will increase with time. Telecom players like Bharti Airtel would be big beneficiaries of this data usage growth and telecom sector consolidation.
Bharti has growth prospects in terms of 3G spectrum, DTH, African company it took over and potential growth in markets which are under penetrated.
With no doubt, Bharti Airtel is the best stock to buy from telecom sector in India with stable business and good balance sheet numbers. The target stock price for Bharti Airtel over the one year time period would be around Rs.400. One who is looking for moderate appreciation with less volatility and least risk in stock markets may buy stocks of Bharti Airtel.
You may want to read:
Stock Analysis – ONGC
Union Bank – Stock Analysis with Target Stock Price
Share Market Stock Tips - Buy Stocks of Chambal Fertilisers
Free Stock Market Tips – Buy HDIL for short term
Blue Chip Stock Analysis - Infosys
Large Cap Stock To Buy - Dr. Reddy’s Laboratories
Buy Stocks of Bank of Baroda
IRB Infra – Stock Analysis and Result Update
Stock Analysis – ONGC
Some notes based on an equity research report from one of the leading stock broker about ONGC and stock price target for one year time period.
ONGC has reported 3QFY12 PAT of Rs.6740 crore, which includes a onetime gain of Rs.3140 crore from Cairn India as royalty disbursement.
Net realization for ONGC on domestic oil production has been at USD 45/barrel.
Upstream share of subsidy for 9 months stands at 38%.
Depreciation and amortization value stands at Rs.4530 crores. It is much higher due to dry well expenses on five deepwater wells.
Production in Syria has come to a halt due to political tension and production in Sudan also declined sharply. This is good enough to cast a doubt on FY13 production growth, which may offset gains from higher crude oil prices for OVL. Decline/stoppage of production at ONGC Videsh Ltd (OVL) is a dampener in results and future numbers.
Gas production in domestic business remains stable and subsidy should be a non- event, provided it continues at 38%. However, if the average subsidy for FY12 rises to 44% or higher, this could be a concern on stock price. Other risks could be higher than expected under- recoveries and lower than expected production from certain OVL assets.
One may Buy Stocks of ONGC for target stock price of Rs.322 over one year.
You may want to read:
Union Bank – Stock Analysis with Target Stock Price
Share Market Stock Tips - Buy Stocks of Chambal Fertilisers
Free Stock Market Tips – Buy HDIL for short term
Blue Chip Stock Analysis - Infosys
Large Cap Stock To Buy - Dr. Reddy’s Laboratories
Buy Stocks of Bank of Baroda
IRB Infra – Stock Analysis and Result Update
ONGC has reported 3QFY12 PAT of Rs.6740 crore, which includes a onetime gain of Rs.3140 crore from Cairn India as royalty disbursement.
Net realization for ONGC on domestic oil production has been at USD 45/barrel.
Upstream share of subsidy for 9 months stands at 38%.
Depreciation and amortization value stands at Rs.4530 crores. It is much higher due to dry well expenses on five deepwater wells.
Production in Syria has come to a halt due to political tension and production in Sudan also declined sharply. This is good enough to cast a doubt on FY13 production growth, which may offset gains from higher crude oil prices for OVL. Decline/stoppage of production at ONGC Videsh Ltd (OVL) is a dampener in results and future numbers.
Gas production in domestic business remains stable and subsidy should be a non- event, provided it continues at 38%. However, if the average subsidy for FY12 rises to 44% or higher, this could be a concern on stock price. Other risks could be higher than expected under- recoveries and lower than expected production from certain OVL assets.
One may Buy Stocks of ONGC for target stock price of Rs.322 over one year.
You may want to read:
Union Bank – Stock Analysis with Target Stock Price
Share Market Stock Tips - Buy Stocks of Chambal Fertilisers
Free Stock Market Tips – Buy HDIL for short term
Blue Chip Stock Analysis - Infosys
Large Cap Stock To Buy - Dr. Reddy’s Laboratories
Buy Stocks of Bank of Baroda
IRB Infra – Stock Analysis and Result Update
RIL's Target Stock Price is Rs.650
Recently I came across news about stock report on RIL from Investment banking firm Morgan Stanley. Morgan Stanley has revised its target stock price for Reliance Industries from Rs. 921 to Rs.650. Investment banking firm has sighted fall in RIL’s gross refining margin and production volume as primary causes.
As per Morgan Stanley, the gross refining margins for RIL were at peak in 2011 due to shut downs in Japan and low production volumes in China. They are expecting that Japan will ramp up its production in 2012 which was devastated due to tsunami in 2011. Also, China and India as well are adding up new refining capacities in 2012 to increase production. This could push margins lower.
RIL’s Exploration and Production unit had produced 80 mmscmd in Dec.09 against 40 mmscmd today. It’s a fall of 50% in production. The world is fearful of European debt crisis which has potential to slow down world economies thereby reducing demand for fuel and that would lead to drop in fuel prices. Also, RIL has sold 30% stake in its exploration and production business to BP. So revenues would be lesser from this unit in RIL’s balance sheet for next financial year.
RIL have huge pile of cash which it is not using for expansion of it’s core refining business but will be used to establish Reliance Industries as a big player in other sectors such as Retail, SEZ, Telecom, Financial services, Hotels, Media and Processed Food. As per Morgan Stanley analysts, this move will make Reliance Industries a conglomerate to which, financial markets apply some discount when it comes to it’s share price.
Read more: RIL - A giant seating on huge cash
Establishing these other businesses in Retail, telecom and other domains mentioned above will take time to bare fruits in terms of profits for Reliance Industries.
Considering all above reasons, Morgan Stanley stock research analysts have evaluated the RIL stock and has reduced the target stock price to Rs. 650.
In my opinion, long term investors should consider RIL a good stock to buy with intrinsic value and growth at discounted stock price and wait for the investment to bear the fruits as part of long term investment portfolio. One should definitely buy stocks of RIL if it comes around target stock price given above (Rs.650) by investment banking firm.
As per Morgan Stanley, the gross refining margins for RIL were at peak in 2011 due to shut downs in Japan and low production volumes in China. They are expecting that Japan will ramp up its production in 2012 which was devastated due to tsunami in 2011. Also, China and India as well are adding up new refining capacities in 2012 to increase production. This could push margins lower.
RIL’s Exploration and Production unit had produced 80 mmscmd in Dec.09 against 40 mmscmd today. It’s a fall of 50% in production. The world is fearful of European debt crisis which has potential to slow down world economies thereby reducing demand for fuel and that would lead to drop in fuel prices. Also, RIL has sold 30% stake in its exploration and production business to BP. So revenues would be lesser from this unit in RIL’s balance sheet for next financial year.
RIL have huge pile of cash which it is not using for expansion of it’s core refining business but will be used to establish Reliance Industries as a big player in other sectors such as Retail, SEZ, Telecom, Financial services, Hotels, Media and Processed Food. As per Morgan Stanley analysts, this move will make Reliance Industries a conglomerate to which, financial markets apply some discount when it comes to it’s share price.
Read more: RIL - A giant seating on huge cash
Establishing these other businesses in Retail, telecom and other domains mentioned above will take time to bare fruits in terms of profits for Reliance Industries.
Considering all above reasons, Morgan Stanley stock research analysts have evaluated the RIL stock and has reduced the target stock price to Rs. 650.
In my opinion, long term investors should consider RIL a good stock to buy with intrinsic value and growth at discounted stock price and wait for the investment to bear the fruits as part of long term investment portfolio. One should definitely buy stocks of RIL if it comes around target stock price given above (Rs.650) by investment banking firm.
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