BPCL: *TP 728 Feb Expiry*

Recently Govt of India has demanded 1700cr Dividend from BPCL. Immediately, analyst/ brokerage world translated it into Rs 11.70/ share Div ( and that yield only 1.8%) as equity of BPCL is 1446cr.

However, ALL are 100% wrong

_Govt of India owns only 55% of BPCL and not 100%_

In order for Govt to get 1700 cr on its 55% stake, *BPCL will have to declare minimum/roughly Rs 3100 cr Dividend which means Rs 22/share and Div yield in BPCL will be 3.6%*

_For Q3, we estimate PAT to rise 75% YoY to 2600 cr_

FY17 Pat is estimated at 8600 cr, translating in EPS of Rs 60(H1 EPS 27.15)

We feel FY17 actual total Dividend could be as high as Rs 25/share

Fundamentally, stock trading at 11xFY17Eeps is definitely underpriced

*BPCL had acquired stake in Mozambique oilfield, value of which has risen manifold*

_BPCL stands out among OMCs for its superior RoE and fair value of its investments is roughly Rs 150/share_

BPCL can be in 4 digits in CY17 itself