HPCL - Battling A Three Headed-Monster: Motilal Oswal
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Motilal Oswal Report
Hindustan Petroleum Corp., the darling of deregulation due to its highest leverage to marketing, is soon going to lose its crown with the addition of 5 million metric tonnes per annum/2mmtpa refining capacity at Visakhapatnam/Mumbai by the end of FY22/CY21.
Marketing will account for only 52% of total consolidated Ebitda in FY23E versus 88% in FY21.
Due to Visakhapatnam expansion, Rajasthan greenfield project, and marketing, consolidated debt is expected to rise to Rs 641 billion in FY23E from Rs 427 billion in FY21, 1.5 times its current market capitalisation.
The residual upgradation project (slurry hydrocracker) at Visakhapatnam is of a relatively new technology, with very few precedents globally.
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