The stock of the state-owned oil marketing company was trading close to its all-time high price of Rs 548, touched on October 4, 2019.
Analysts at JP Morgan said that BPCL remains the most likely candidate for gathering revenues from strategic sale of the government stake.
However, without Cabinet approving the stake sale process, advisors cannot be appointed. And, given the delay in appointing advisors, "we struggle to see how the March 20 deadline for completing the stake sale would be completed", the brokerage firm said in a company update.
The Disinvestment Department (DIPAM) extended the date for the appointment of various advisors for the expected BPCL stake sale to November 25. The original deadline was November 4, which was pushed out to November 11.
The brokerage firm has ‘overweight’ rating on BPCL with a target price of Rs 545 per share.
Overall, BPCL’s capex intensity should ease as large refining expansions are behind us. In our view, BPCL is well positioned to benefit even if the International Maritime Organization (IMO) upswing lasts only a few quarters, and the lower capex intensity is a positive in a range-bound refining and marketing margin environment, analysts at JP Morgan said.
In the past three months, BPCL has outperformed the market by surging 48 per cent on government strategic sale report. In comparison, the S&P BSE Sensex was up 8 per cent during the same period.
At 09:53 am, the stock was up 3 per cent at Rs 521, against 0.07 per cent rise in the benchmark index. The counter has seen huge trading volumes with a combined 5.7 million shares changed hands on the NSE and BSE so far.