Wednesday, September 26, 2007
GOOD BUY : HPCL
HPCL is a grossly undervalued stock in the currently hot and happening Oil & Gas sector. This has been largely due to APM (administered pricing mechanism) of the govt. Once APM is dismantled, this stock can sky rocket. Even otherwise, the stock is grossly undervalued and underowned. With previous year EPS standing at 75.65, this stock deserves a price of at least rs. 750. Compare that with its current mkt price and there is a lot of room for appreciation. Also there is a huge valuation gap between HPCL and its peers like RPL after a major rally in RPL, RNRL and other refinery/energy stocks. HPCL definitely deserves a re-rating upwards and market participants seem to be slowly realising this now.