This smallcap oil refinery stock has given 410% returns in two years!

This smallcap oil refinery stock has given 410% returns in two years!

by 5paisa Research Team Last Updated: Dec 12, 2022 - 11:21 am 26.6k Views
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The stock is rallying on the bourses today hitting a 20% upper circuit!

Chennai Petroleum Corporation Ltd (CPCL) is the latest example of the old idiom “ Make hay while the sun shines.” It has logged multiple 52-week highs in 2022, giving gravity-defying returns. Market capitalization of the company has jumped 262% from Rs 1535 crore to Rs 5557 crore on a YTD basis on the back of a strong rally in its stock price. 

  •  Rs 100,000 invested just three months ago would have become Rs 2,97,220 giving a price return of 197% and, 

  • Rs 100,000 invested at the beginning of FY2023 would have more than tripled at Rs 313,000, giving a price return of 213%.  

  • Rs 100,000 invested two years back would have become Rs 5,10,470 giving a price return of 410%. 

The stock has been riding high on the back of skyrocketing crude oil prices. CPCL is in the business of refining crude oil to produce and supply various petroleum products and manufacture and sale of lubricating oil additives. 

In Q4FY22, the company reached historical highs across all financial parameters. The company recorded income from operations at Rs 20997 crore in Q4FY22 which is an increase of 42.78% YoY, on a QoQ basis the revenue was also up by 54.48%. The EBIDTA of the company increased 202.9% on YoY and by 192.12% on QoQ and stood at Rs 45.23 crore. The company reported PAT of Rs 994.36 crore as against Rs 231.80 crore a year ago, which is an increase of 329%. EBITDA margins expanded by 398 bps and stood at 7.93% and while PAT margins shrunk by 316 bps to 4.74%. 

In the mid-day trades today, the shares of CPCL logged a fresh 52-week high at Rs 385.35 also touching the upper circuit of 20% at that level. The surge in oil refineries is seen on the back of a sharp rise in the Singapore gross refining margin (GRM) to a record high of USD 25.2 a barrel. From its 52-week low of Rs 94.65, the stock has rallied 307% or 3X. 

At 12.35 pm, CPCL was quoting at Rs 381.30 up 18.73% or Rs 60.15 per share. 

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