Understanding the Current Rating
The 'Buy' rating assigned to Bharat Petroleum Corporation Ltd indicates a positive outlook on the stock’s potential for investors seeking growth with a reasonable risk profile. This recommendation is based on a comprehensive evaluation of four key parameters: Quality, Valuation, Financial Trend, and Technicals. Each of these factors contributes to the overall assessment of the stock’s attractiveness in the current market environment.
Quality Assessment
As of 20 January 2026, Bharat Petroleum demonstrates a strong quality profile. The company holds a 'good' quality grade, supported by high management efficiency and robust operational metrics. Notably, the return on capital employed (ROCE) stands at an impressive 17.89%, reflecting effective utilisation of capital to generate profits. This level of ROCE is a key indicator of the company’s ability to sustain long-term growth and profitability.
Furthermore, the company has exhibited healthy long-term growth trends, with net sales increasing at an annual rate of 13.82% and operating profit growing at 28.15%. These figures underscore the firm’s capacity to expand its revenue base while improving operational efficiency, which is crucial for maintaining competitive advantage in the oil sector.
Valuation Perspective
Currently, Bharat Petroleum’s valuation is considered 'very attractive'. The stock trades at a discount relative to its peers’ historical valuations, with an enterprise value to capital employed ratio of just 1.5. This suggests that the market is pricing the company conservatively compared to its asset base and earning power.
The company’s price-to-earnings-to-growth (PEG) ratio is notably low at 0.1, indicating that its earnings growth significantly outpaces its price appreciation, which is a favourable sign for value-oriented investors. Additionally, the stock offers a high dividend yield of 4.8%, providing an attractive income stream alongside capital appreciation potential.
Financial Trend Analysis
The financial trend for Bharat Petroleum remains positive as of 20 January 2026. The latest quarterly results for September 2025 highlight record operational performance, with PBDIT reaching ₹9,761.18 crore—the highest recorded to date. Operating profit margin also peaked at 9.30%, signalling improved cost management and pricing power.
Profit before tax excluding other income (PBT less OI) grew by 46.5% compared to the previous four-quarter average, reaching ₹7,557.69 crore. This strong earnings momentum is a key driver behind the current rating, reflecting the company’s ability to convert revenue growth into substantial profit gains.
Over the past year, the stock has delivered a total return of 28.08%, while profits have surged by 60.7%, reinforcing the positive financial trajectory. Such performance metrics indicate that the company is well-positioned to sustain growth and reward shareholders.
Technical Outlook
From a technical standpoint, Bharat Petroleum is rated as 'mildly bullish'. The stock’s recent price movements show resilience despite short-term volatility, with a one-week change of +0.01% and a three-month gain of 5.15%. The six-month return stands at 3.41%, while the year-to-date performance is slightly negative at -7.51%, reflecting some market fluctuations.
Institutional investors hold a significant 38.78% stake in the company, which often signals confidence from well-informed market participants. Their involvement tends to provide stability and can be a positive indicator for future price support.
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Implications for Investors
For investors, the 'Buy' rating on Bharat Petroleum suggests that the stock offers a compelling combination of quality, value, and growth potential. The company’s strong fundamentals, attractive valuation, and positive financial trends provide a solid foundation for future returns. While the technical outlook is mildly bullish, the stock’s resilience and institutional backing add further confidence.
Investors should consider that the rating reflects the company’s current standing as of 20 January 2026, incorporating the latest financial data and market conditions. This comprehensive approach ensures that the recommendation is grounded in up-to-date analysis rather than historical snapshots.
Sector and Market Context
Operating within the oil sector, Bharat Petroleum benefits from its large-cap status and established market presence. The sector’s cyclical nature means that valuation and financial trends can fluctuate with global energy demand and commodity prices. However, the company’s demonstrated operational efficiency and growth trajectory position it favourably against peers.
Given the stock’s current discount to historical valuations and strong dividend yield, it may appeal to investors seeking both income and capital appreciation in a sector that is integral to the broader economy.
Summary
In summary, Bharat Petroleum Corporation Ltd’s 'Buy' rating by MarketsMOJO, last updated on 08 Jan 2026, is supported by a robust quality profile, very attractive valuation, positive financial trends, and a mildly bullish technical outlook. The analysis based on data as of 20 January 2026 confirms the stock’s potential as a worthwhile addition to a diversified portfolio, particularly for investors focused on large-cap oil sector opportunities with solid fundamentals and growth prospects.
Key Metrics at a Glance (As of 20 January 2026)
- Mojo Score: 74.0 (Buy Grade)
- ROCE: 17.89%
- Net Sales Growth (Annual): 13.82%
- Operating Profit Growth (Annual): 28.15%
- Quarterly PBDIT: ₹9,761.18 crore (highest recorded)
- Operating Profit Margin (Quarterly): 9.30%
- PBT less Other Income (Quarterly): ₹7,557.69 crore, +46.5% vs previous 4Q average
- Enterprise Value to Capital Employed: 1.5
- PEG Ratio: 0.1
- Dividend Yield: 4.8%
- Institutional Holdings: 38.78%
- Stock Returns: 1Y +28.08%, 3M +5.15%, 6M +3.41%, YTD -7.51%
These figures collectively underpin the current 'Buy' rating and provide investors with a detailed understanding of the stock’s present strengths and market positioning.
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