Chennai Petroleum Corporation Limited

Energy — Oil & Gas Refining & Marketing · NSE

₹1,409.90−₹34.10 (−2.36%)

DalalBaazaar Score

55 / 100

🟡 Moderate

Verdict

NEUTRAL

Risk

Low

Driven by small-cap size, which brings sharper price swings.

In simple words: Strong business and financial position, with both sales and profits growing well. Nothing obvious stands out as stretched — the usual checks on business quality and management still apply.

Decision support, not a buy or sell call.

As of 18 Oct 2026, 7:03 pm

Understanding the Business

Company site ↗

The 60-second version of Chennai Petroleum Corporation Limited — what it does, how it earns, and who it competes with, before any of the numbers below.

What does this company do?

Chennai Petroleum Corporation Limited produces and supplies petroleum products in India.

IndustryOil & Gas Refining & Marketing

SectorEnergy

Employees1,403

Annual revenue₹63,551 Cr

How does it make money?

Turns over ₹63,551 Cr a year. Of every ₹100 of sales, about ₹5 reaches shareholders as profit, with ₹8 left at the operating level before interest, tax and depreciation. Each of its 1,403 employees supports ₹45.30 Cr of revenue a year, the signature of a capital- or asset-led business.

Revenue / employee₹45.30 Cr

Who are its competitors?

The closest listed comparisons in its industry are RELIANCE INDUSTRIES LTD, OIL AND NATURAL GAS CORP., BHARAT PETROLEUM CORP LT, INDIAN OIL CORP LTD. These are the companies its valuation and returns are measured against elsewhere in this report.

Compared side by side in Peers ↓

What is its competitive advantage?Some evidence

ROCE of 33.4% is above what capital typically costs, which suggests some pricing power, though not yet the sustained, wide gap that marks a durable advantage.

Peer median ROE15.4%

What is the outlook?

1 analysts covering the stock expect revenue to shrink about 8.4% and earnings to grow about 28.1% in the year to 2028. These are estimates by people who follow the company, not a forecast for the wider industry.

Est. revenue growth-8.4%

Est. earnings growth+28.1%

Analysts1

What has been driving growth?

Growth has come mainly from selling more, rather than from keeping more of each sale. Over 3 years revenue moved -17% while net margin moved +6% relative to itself. What this cannot tell you is which products, customers or geographies did the work — that lives in the segment disclosures of the annual report.

Revenue effect-17%

Margin effect+6%

DalalBaazaar Score

55/ 100

Moderate

Weighted across six categories. Every point is explained below.

✗ Revenue has contracted at 6.0% a year
✗ Profit has declined at 4.2% a year

Quality vs. Valuation

Company Quality

52/ 100

Average

How good the business is, ignoring the share price entirely.

Valuation

77/ 100

Cheap

What you are being asked to pay, ignoring how good the business is.

A reasonable business at a reasonable price — neither the quality nor the valuation stands out in either direction.

Historical Valuation

Current P/E

5.0x

3Y Median

4.2x

40 monthly readings · mean 22.8x · range 1.8x–87.7x

Sector Median

6.9x

median of 4 sector peers

⚠️Current valuation is approximately 20% above its 3y median of 4.2x. Paying more than usual needs a reason — faster growth, a better balance sheet, or a re-rating you believe in.

🟢Against its sector it trades 27% below the peer median of 6.9x.

vs. its own history

Fair

4.2x median over 40 months · +20%

vs. sector peers

Cheap

6.9x median of 4 peers · -27%

vs. generic bands

Cheap

Below 15x

EV/EBITDA

4.5x

PEG

—

What's Good / What's Bad

🟢 What's Going Well4

Debt is being paid down
Total debt is down 54% over 3 years.
High return on capital employed
ROCE of 33.4% is the mark of a business that converts capital into profit efficiently.
Very low debt
Debt/Equity of 0.18x leaves the balance sheet with plenty of headroom.
Consistently profitable
Profitable in every one of the last 4 reported years.

🔴 What Needs Attention2

Return on equity is falling
ROE has dropped from 54.5% to 27.9% — each rupee of shareholder capital earns less than it did.
Return on capital is falling
ROCE has declined from 54.3% to 33.4% — often a sign of competition or overexpansion.

Red Flags

1 item require attention · 1 watch

🟡Inventory building faster than salesFinancial
Inventory up 36% against revenue up -17% — stock may not be moving.

Investment Thesis

🟢 Bull CaseWhat could make this work?

Capital compounds at a high rate
ROCE of 33.4% means each rupee reinvested earns well above what capital costs. If the company can keep deploying at this rate, growth creates value rather than just consuming cash.
Deleveraging frees up earnings
Debt is down 54% over 3 years. Every rupee of interest not paid drops to the bottom line, so profit can grow even if revenue does not.
Cheaper than its peers
It trades 27% below the sector median. Either the market sees a problem the numbers do not show, or the discount closes.
Self-funding with balance-sheet headroom
Positive free cash flow of ₹2,042 Cr alongside low debt means growth, buybacks or dividends need no outside money — and a downturn can be absorbed rather than refinanced.
Earnings have proved durable
Profitable in every one of the last 4 reported years. Consistency lowers the risk that any single bad year is structural rather than cyclical.

🔴 Bear CaseWhat could go wrong?

Returns on shareholder capital are falling
ROE has dropped from 54.5% to 27.9%. Each rupee of equity earns less than it did, so profit growth increasingly depends on raising more capital rather than on the existing base working harder.
Earnings are hard to forecast
Profit has swung sharply from year to year, so any single year — good or bad — is a weak guide to the next. Cyclical earnings deserve lower multiples for that reason.
Size brings its own risk
Small Cap businesses are thinly traded, so exits are harder in a falling market and single events move the price more than they would for a larger company.

🟡 Key Things to WatchMeasurable tripwires, set against where this company stands today

1EBITDA margin holds above 6%✓ 7.7%
Two points below today's level — enough room for noise, tight enough to catch real compression.
2Free cash flow remains positive✓ ₹2,042 Cr
Profit that never becomes cash eventually stops being profit.
3Debt / EBITDA stays below 2x✓ 0.4x
The ratio lenders write covenants against; it survives a small or negative equity base, unlike Debt/Equity.
4ROCE stays above 30%✓ 33.4%
Falling returns on capital are usually competition arriving, and show up here before they reach the margin.
5Valuation vs its own median of 4.2x✓ 5.0x today
A re-rating above its own history needs a reason; without one it is just a higher price.

Investment Checklist

11 / 12 checks passed

✓ Strong return on equity (ROE ≥ 15%)
✓ Strong return on capital employed (ROCE ≥ 15%)
✗ Healthy net margin (≥ 10%)
✓ Generates positive free cash flow
✓ Manageable leverage (Debt/Equity < 1.0)
✓ Adequate short-term liquidity (Current Ratio ≥ 1.0)
✓ Revenue growing year-over-year
✓ Profit growing year-over-year
✓ Not trading at an extreme valuation (P/E < 40x)
✓ Not buying right at the 52-week high
✓ Analyst consensus isn't majority-sell
✓ Short-term technical trend isn't bearish

Price history

Quick Metrics

9 good · 2 neutral · 0 weak

Market Cap

₹20,995 Cr

Small Cap

Smaller company — thin liquidity and deep drawdowns are normal here

P/E (Trailing)

5.0x

Cheap

Cheap against the generic band

P/B Ratio

1.89x

Fair

Moderate premium to the company's book value

EPS (TTM)

₹280.3

Profitable

Profitable on a per-share basis

ROE

27.9%

Strong

Strong capital efficiency

ROCE

33.4%

Strong

Earns comfortably above its likely cost of capital

Debt/Equity

0.18x

Low

Conservative leverage

Revenue Growth (YoY)

84.8%

Healthy

Healthy top-line growth

Profit Growth (YoY)

1349.3%

Healthy

Profits growing at a healthy clip

Dividend Yield

4.40%

Healthy

Meaningful cash return while you hold the stock

Free Cash Flow

₹2,042 Cr

Cash generative

Generates cash even after funding its capex

More Metrics

P/E (Forward)

3.5x

Improving

Below the trailing multiple — the street expects earnings to grow into the price

Operating Margin

5.1%

Average

Average margins

Net Margin

5.5%

Average

Average bottom-line conversion

Current Ratio

1.62

Comfortable

Healthy short-term liquidity

Beta (vs Nifty)

0.07

Defensive

Steadier than the market

52W Range Position

72%

Mid-range

Technical Snapshot

SMA 20 / SMA 50

1435.5 / 1419.5

Bullish alignment (short > long)

Price vs SMA 200

Above

Long-term uptrend

RSI (14)

51.9

Neutral momentum

Financial Trend (4-Year)

Metric	FY23	FY24	FY25	FY26	3Y CAGR
Revenue	₹76,628 Cr	₹66,320 Cr	₹59,269 Cr	₹63,551 Cr	-6.0%
EBITDA	₹5,708 Cr	₹4,525 Cr	₹1,117 Cr	₹4,871 Cr	-5.1%
EBITDA Margin	7.4%	6.8%	1.9%	7.7%	—
PAT (Net Profit)	₹3,532 Cr	₹2,745 Cr	₹214 Cr	₹3,103 Cr	-4.2%
EPS	₹237.16	₹184.34	₹14.38	₹208.36	-4.2%
ROE	54.5%	31.1%	2.6%	27.9%	—
ROCE	54.3%	35.5%	5.2%	33.4%	—
Total Debt	₹4,260 Cr	₹2,786 Cr	₹3,117 Cr	₹1,964 Cr	-22.7%
Free Cash Flow	₹5,331 Cr	₹2,092 Cr	₹667 Cr	₹2,042 Cr	-27.4%

🔴 Revenue has shrunk at 6.0% a year over 3 years.

🔴 EBITDA has shrunk at 5.1% a year over 3 years.

🟡 EBITDA Margin has held roughly flat at 7.7% over 3 years.

🔴 PAT (Net Profit) has shrunk at 4.2% a year over 3 years.

🔴 EPS has shrunk at 4.2% a year over 3 years.

🔴 ROE has fallen from 54.5% to 27.9% over 3 years (-26.6 pts).

🔴 ROCE has fallen from 54.3% to 33.4% over 3 years (-20.9 pts).

🟢 Total Debt has shrunk at 22.7% a year over 3 years.

🔴 Free Cash Flow has shrunk at 27.4% a year over 3 years.

Balance Sheet & Cash Flow — FY2026

Total Assets

₹20,035 Cr

Total Liabilities

₹8,925 Cr

Cash & Equivalents

₹905 Cr

Operating Cash Flow

₹2,945 Cr

Capex

-₹903 Cr

Shareholding (proxy)

Institutional Holding

5.8%

Insider Holding

68.8%

Corporate Actions

Dividend Rate

₹62

Ex-Dividend Date

07 Aug 2026

Analyst Consensus

Recommendations

1 Buy · 0 Hold · 0 Sell

Target Price (Mean)

₹1,540

+9.2% vs CMP

Target Range

₹1,540 – ₹1,540

Peer Comparison

Company	P/E	ROE
RELIANCE INDUSTRIES LTD	21.9x	8.3%
OIL AND NATURAL GAS CORP.	6.4x	11.7%
BHARAT PETROLEUM CORP LT	7.3x	17.1%
INDIAN OIL CORP LTD	5.3x	15.4%

Recent News

2 mixed4 general

Chennai Petroleum Corporation Ltd. Share Price Live Today

CNBC TV18, 16 Oct

Chennai Petroleum Corporation Ltd Share/Stock Price Live Today | The HinduBusinessLine

BusinessLine, 14 Oct

Chennai Petroleum Stock Falls Nearly 6% as Crude Prices Ease

Kalkine India, 15 Oct

Chennai Petro's Stock Plunges Nearly 6% As Crude Oil Retreats Below $104/Barrel

NDTV Profit, 15 Oct

Chennai Petroleum, MRPL shares defy market weakness, gain up to 6%

Business Standard, 07 OctPrice move

🟡Mixed / dependsA price move, which is not by itself a change in the business. Worth finding the cause before reading it as either good or bad.

Dolly Khanna portfolio: Ace investor sells 4 lakh shares of Chennai Petroleum in Q2, stock up 82% in one y

The Economic Times, 12 OctPrice move

🟡Mixed / dependsA price move, which is not by itself a change in the business. Worth finding the cause before reading it as either good or bad.

Watch Items

Cross-check against the company's latest quarterly filing / investor presentation before acting.

DalalBaazaar Thesis

StrongFinancial Health · Valuation

MiddlingBusiness Quality · Profitability · Risk

WeakGrowth

Points for each in the Score ↑

Unremarkable in both directions

A reasonable business at a reasonable price. Nothing here is alarming and nothing is compelling, which usually means the decision rests on things this data cannot see — the industry's direction, management's intent, and what else is available to you.

All 5 tripwires holding · see Key things to watch ↑