A C CHOKSI

SHARE BROKERS PRIVATE LIMITED

Bharat Petroleum Corp. Ltd.

Nurturing Wealth
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Current Market Price (Rs.) 751.80 Target Price (Rs.) 835.00 Potentional Upside 11.07% BSE Code 500547 NSE Code BPCL Bloomberg Ticker BPCL:IN Face Value (Rs.) 10 Share Outstanding (In Crs.) 36.15 Market Cap (Rs. Crs.) 27,181 52 Week Range (Rs.)(H/L) 768.40/459.05 Beta 0.48 Risk Factor MODERATE ________________________________

May 16, 2012 BUY _____________________________________________________ Bharat Petroleum Corporation Limited (BPCL), a fortune 500 oil refining, exploration and marketing PSU with Navratna status. On 24th January 1976, the Burmah Shell Group of Companies was taken over by the Government of India to form Bharat Refineries Limited. On 1st August 1977, it was renamed Bharat Petroleum Corporation Limited. Post Nationalisation, BPCL changed gears and embarked upon a rapid
growth path. Massive expansion and modernizations provided a tremendous boost to the company's performance.

Investment Rationale: Mozambique gas reserves discovery; value accretive for BPCL: BPCL holds 10% stake in Rovuma basin gas asset in Mozambique which SHAREHOLDING PATTERN ________________________________ has discovered 59 meters of natural gas in Rovuma concession Area 1. As per the operator of the gas field Mr. Anadarko Mozambique, there is estimated potential to add up to 7 to 20 trillion cubic feet (tcf) to the already discovered 17 to 30 tcf of recoverable natural gas reserves in the area. It will make total reserves of 50 tcf which can produce 180 million metric standard cubic meter of gas per day and can support LNG with capacity of 50 million tonnes annually. The major advantage for BPCL is that it increases its strength to raise money from market for further capex. According to the estimates these reserves is way above the Reliance Industries' 6.11 tcf.

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Expected fuel price hike post budget session: As per Mr. Pranab Mukherjee, Finance Minister, it is impossible for the government to Source : BSE, A C Choksi Research maintain the current level of fuel subsidies and government will address under-recoveries of oil marketing company which is 1.8 lakh crore for the financial year. Prices of diesel, LPG and kerosene are expected to SHARE PRICE ANALYSIS ________________________________ increase after Budget session of Parliament which is scheduled to end on 22nd May,2012. Petrol price is also likely to increase. Hence, this will result into reduction in under-recoveries for BPCL growth. Thus we are bullish on BPCL as we feel that it provides a good investment opportunity for short-term investment horizon. Therefore, we recommend BUY rating on BPCL with a price target of Rs. 835. FINANCIAL OVERVIEW

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Source :Capitaline, A C Choksi Research

Kevin Shah Email: research@acchoksi.com Contact: 022-6159 5146/5125 _____________________________________________________________________________________ 1 A C Choksi Fundamental Research research@acchoksi.com

(Rs Crs) Net Sales EBITDA Net PAT EBITDA Margin (%) PAT Margin (%) Adjusted EPS (Rs.)

Q3FY12 58,824 4,126 3,140 7.0% 5.3% 94.46

Q3 FY11 Y-o-Y Q2 FY12 Q-o-Q 36,665 60.4% 42,282 39.1% 1,059 289.6% -2,316 NA 187 1575.5% -3,229 NA 2.9% 413bps -5.5% 1249bps 0.5% 483bps -7.6% 1297bps 5.64 1575.5% -97.16 NA

A C CHOKSI
SHARE BROKERS PRIVATE LIMITED

Nurturing Wealth

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