BPCL share price: Stock to benefit from crude oil price cut, expert says

BPCL share price news: Nilesh Jain recommends a Buy for BPCL stocks, says the stock to benefit from low crude oil prices

BPCL share price news: Not much impact of the news around its disinvestment says Nilesh Jain as it has already been factored in. Source: Reuters

BPCL share price news: Investors willing to invest in oil sector companies could buy Bharat Petroleum Corp Ltd (BPCL) shares, technical analyst Nilesh Jain said. The company is benefiting from a sharp correction in crude oil prices which were almost down by over 30 pct on Monday. The Brent Crude is currently trading around $31 per barrel.

All the three oil marketing companies -- Indian Oil Corporation Ltd (IOCL), Hindustan Petroleum Corporation Ltd (HPCL) and Bharat Petroleum Corporation Limited (BPCL) were trading in the green on Monday, with BPCL shares gaining around 10 pct from the Friday close.

Nilesh Jain said that the gains have come on the back of significant cuts in the crude oil prices benefiting the oil marketing companies.

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At 11 am, the shares of BPCL were trading at Rs 436.30 on the Sensex.

On the other hand, oil explorers like ONGC and Reliance Industries have suffered because of the development as they are the oil producers.

The international price has come down benefiting companies who import crude oil, he said. ONGC's shares at Rs 78.65 were trading down by almost 12 pct while those of Reliance Industries were trading down by 9 pct at Rs 1,155.05.

Nilesh Jain puts the target price between Rs 470 and Rs 485 while the stop loss at Rs 420.

Nilesh Jain did not see much impact on the shares of BPCL owing to the news around its disinvestment.

The government on Saturday invited bids for a majority stake in BPCL, after more than three months of the Union Cabinet approving the strategic divestment.

Only those private companies with a net worth of over $10 billion will be eligible to bid by May 2.

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The current market capitalisation of BPCL is over Rs 87300 cr with the government stake at 52.98 per cent in the company. BPCL is valued at around Rs 46,300 crore. This sale of BPCL along with some other public sector companies including Air India is key to meeting the government’s disinvestment target of Rs 2.1 trillion in the financial year 2020-21. So far, the disinvestment exercise has fetched the government Rs 34,845 crore during the current financial year.

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