BPCL vs HPCL vs IOCL – Stock Analysis of Oil Marketing Companies in India

BPCL vs HPCL vs IOCL - Biggest Oil Marketing Companies in India

BPCL vs HPCL vs IOCL – Stock Analysis of Oil Marketing Companies in India

Comparison of Oil Marketing Companies Shares

Bharat Petroleum Corporation Limited (BPCL) is a Government of India controlled Maharatna oil and gas company headquartered in Mumbai, Maharashtra. The corporation operates two large refineries of the country located in Mumbai and Kochi. It is one of the largest Oil marketing companies in India

Hindustan Petroleum Corporation Limited (HPCL) is an Indian oil and natural gas company with its headquarters at Mumbai, Maharashtra. It has about 25% market-share in India among public-sector companies and a strong marketing infrastructure.

Indian Oil Corporation Limited (IOCL) is commonly known as IndianOil. It is an Indian state-owned oil and gas company with registered office at Mumbai and primarily headquartered in New Delhi. It is the largest commercial oil company in the country.

An analysis and comparison between these companies (Oil Marketing Companies) is being presented here.

Let’s have a look at the companies:

Market Capitalisation of Oil Marketing Companies

Market Capitalisation (in Rs. Cr) 74,000 33,000 1,21,000
  • In terms of market cap, IOCL is the biggest company out of the three.

P/E Ratio – BPCL vs HPCL vs IOCL

Current PE 11.08 7.00 7.44
3-year Average PE 10.97 8.15 11.47
5-year Average PE 10.56 8.38 12.06
10-year Average PE 12.73 9.43 12.00
  • BPCL is currently trading with PE at almost same level. Only when u compare it with its 10-year average PE it is on the lower side.
  • HPCL is currently trading at a lower levels as compared to all the average PE values.
  • IOCL is being traded at very lower level currently compared to its average PE’s.
  • IOCL looks the cheapest company here as the company is also very big, followed by HPCL and the BPCL is the expensive one out of the 3 companies.

Dividend Yield – BPCL vs HPCL vs IOCL

Dividend Yield 5.68% 7.92% 16.00%
  • These dividend yield of the companies are in terms of their PE ratio values.

Sales Growth of Oil Marketing Companies

Sales growth of all the companies for the last 5 years are almost flat.

  • The sales growth of BPCL is completely flat.
  • HPCL sales growth have fluctuated by a maximum of 1%
  • IOCL sales growth is little negative that is its sales number have decreased.

Profit Growth – BPCL vs HPCL vs IOCL

5-Year Profit Growth 23.65% 49.19% 38.01%
  • The profits of these companies have grown considerably in the last 5 years. This is a positive things note here.

Holdings of Oil Marketing Companies

  • BPCL and IOCL are PSU companies, that is they are government owned and the government of India has the stake in these companies. Government owns 53.98% stake in BPCL and 54.06% stake in IOCL.
  • HPCL is a subsidiary of Oil and Natural Gas Corporation (ONGC). ONGC has 51.1% stake in HPCL.

When to Invest in Oil Marketing Companies?

  • Weak Government and High Crude Prices – Very bad situation of the oil marketing companies. Should not in any case investment in these companies at that time.
  • Weak Government and Low Crude Prices – This is an above average scenario. Not many problems will be there in this industry.
  • Strong Government and High Crude Prices – This would be average scenario. If the government is strong, then won’t do anything to change the price and will not put much pressure on the oil marketing companies. But if it’s a strong government and elections are due then price cuts happen. Like when we saw in the past recently, during the elections in 3 states government and oil companies both took on some price cuts. And this is not a good sign.
  • Strong Government and Low Crude Prices – If one looks at the last 5 years, then the oil marketing companies have given pretty good returns in this time frame. And this situation is the biggest reason behind these returns.

Summary of comparison of Oil Marketing Companies

  • All the three companies are entangled, that is almost same changed happen in the valuation of these 3 companies.
  • Compared to HPCL and IOCL, BPCL trades at a little premium in terms of valuations as per the trend observed in the last 3 years.
  • In terms of the financial numbers of these companies, there isn’t much difference.
  • If one wants to invest in the oil marketing companies, then they should always have a look at the position of the government and the crude prices and then take a call on investment in these companies.
  • In general companies which are dependent on crude oil may not have that good visibility in the long run with the increasing developments in the alternative energy sector.

Notes: –

  • The numbers that are used are approximate and have been rounded for presentation purposes.
  • We are not in any way saying that this is a bad company, or the stock of this company is bad.
  • We are also not suggesting anyone to immediately go and buy this stock or invest in the stock markets.
  • Only an analysis has been presented here. No judgments or final statements are being made here.

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