BPCL: Andhra Petrochemical Complex Will Drive Long-Term Upside Potential

Analysts have raised their price target on Bharat Petroleum slightly, to approximately ₹404 from about ₹400. This reflects expectations of marginally stronger revenue growth and a modestly higher future valuation multiple, despite a small dip in projected profit margins.

What's in the News

• BPCL signed a non binding MoU with Oil India to explore collaboration on its proposed Greenfield Refinery and Petrochemical Complex near Ramayapatnam Port in Andhra Pradesh, a 9–12 MMTPA project with an estimated investment of about INR 1 lakh crore, targeted for commercial operations by FY2030 (Key Developments).
• The Ramayapatnam complex will include a 1.5 MMTPA ethylene cracker unit, expected to be the first of its kind in southern India and among the highest petrochemical intensity facilities in the country at around 35 percent, supporting downstream expansion and regional industrial development (Key Developments).
• BPCL signed additional MoUs with Numaligarh Refinery Limited and Fertilisers and Chemicals Travancore Limited to strengthen cooperation across refining, petrochemicals, green energy, and logistics infrastructure, aligning with its integrated growth and energy security strategy (Key Developments).
• A tripartite MoU between OIL, BPCL, and NRL will evaluate a cross country petroleum products pipeline from Siliguri to Mughalsarai via Muzaffarpur and associated depot capacity expansion, with a combined planned investment of about INR 10,000 crore to support NRL’s capacity increase from 3 MMTPA to 9 MMTPA (Key Developments).
• BPCL has scheduled a board meeting on October 31, 2025 to review unaudited financial results for the quarter and half year ended September 30, 2025 and to consider declaring an interim dividend for FY 2025–26 (Key Developments).

Valuation Changes

• The fair value estimate has risen slightly to about ₹404 from roughly ₹400, implying a modestly higher intrinsic valuation for Bharat Petroleum.
• The discount rate remains unchanged at around 12.8 percent, indicating no shift in the risk or return assumptions applied to future cash flows.
• Revenue growth has increased moderately to approximately 2.2 percent from about 1.7 percent, reflecting expectations of somewhat stronger top line expansion.
• The net profit margin has edged down slightly to around 3.4 percent from roughly 3.5 percent, pointing to a minor compression in projected profitability.
• The future P/E multiple has risen marginally to about 15.5x from nearly 15.3x, suggesting a slightly higher valuation multiple on projected earnings.