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Bharat Petroleum Corporation Ltd.
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  • Financials
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Bharat Petroleum Corporation Ltd.

  • 414.60-12.10 (-2.84%)
  • Closed
  • As On: 15 Jan, 2021, 04:01 PM IST
  • Open429.40
  • High429.50
  • Low411.30
  • Prev Close426.70
  • Volume88,27,951
  • VWAP(₹)418.89
  • Strategic divestment re-rating

    The impending strategic divestment would be the biggest trigger for re-rating of the stock valuations as financial autonomy would lead to superior capital allocation and cost optimization.
  • Improvement in GRM

    The gross refining margins have a scope to see an improvement, after the ongoing up gradation and expansion at different refineries gets completed.
  • Large distribution network

    BPCL has added 1,447 outlets in FY-20 to its vast network located across rural and urban areas, taking the number to 16,234. Its throughput per outlet is highest among PSU oil companies, though there is still scope for improvement through rationalisation of outlets
  • Expanding petrochem portfolio

    The Propylene Derivative Petrochemical Project (PDPP) at Kochi Refinery for manufacturing niche petrochemicals is completed and will start commercial production soon. Production of Polyols and related products should help in improving margins.

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Key Metrics

  • PE Ratio(x)21.27
  • EPS - TTM(₹)19.49
  • MCap(₹ Cr.)89,937.22
  • MCap Rank3
  • PB Ratio(x)2.40
  • Div Yield(%)5.23
  • Face Value(₹)10.00
  • 52W High(₹)510.00
  • 52W Low(₹)252.00
  • MCap/Sales0.22
  • Beta(1 Month)1.64
  • BV/Share(₹)177.89

Returns

  • 1 Day-2.84%
  • 1 Month4.01%
  • 3 Months26.92%
  • 1 Year-11.4%
  • 3 Years-14.9%
  • 5 Years33.38%

Financials

    • Topline Contraction

      Sales de-grew by 4.58%. Company witnessed revenue contraction for the first time in last 3 years. (Source: Consolidated Financials)
    • Employee & Interest Expense

      Company has spent less than 1% of its operating revenues towards interest expenses and 1.41% towards employee cost in the year ending Mar 31, 2020. (Source: Consolidated Financials)
    Sep 2020Jun 2020Mar 2020Dec 2019Sep 2019
    Total Income49,713.3238,536.2469,398.9975,527.7064,705.73
    Total Income Growth (%)29.00-44.47-8.1116.72-15.82
    Total Expenses45,516.7934,812.1571,931.4672,902.9762,458.04
    Total Expenses Growth (%)30.75-51.60-1.3316.72-15.96
    EBIT4,196.533,724.09-2,532.472,624.732,247.69
    EBIT Growth (%)12.69--196.4816.77-11.78
    PAT2,263.052,035.39-1,847.371,776.351,502.63
    PAT Growth (%)11.19--204.0018.22-7.46
    EBIT Margin (%)8.449.66-3.653.483.47
    Net Profit Margin (%)4.555.28-2.662.352.32
    Basic EPS (₹)11.5110.35-9.399.037.64
    Sep 2020Jun 2020Mar 2020Dec 2019Sep 2019
    Total Income50,718.9439,378.3670,148.2075,247.6165,212.06
    Total Income Growth (%)28.80-43.86-6.7815.39-15.15
    Total Expenses47,408.5535,865.0771,638.5273,002.5262,918.13
    Total Expenses Growth (%)32.19-49.94-1.8716.03-16.17
    EBIT3,310.393,513.29-1,490.322,245.092,293.93
    EBIT Growth (%)-5.78--166.38-2.1327.14
    PAT2,247.752,076.17-1,361.011,260.631,708.45
    PAT Growth (%)8.26--207.96-26.2158.91
    EBIT Margin (%)6.538.92-2.122.983.52
    Net Profit Margin (%)4.435.27-1.941.682.62
    Basic EPS (₹)11.4310.56-6.926.418.69
    FY 2020FY 2019FY 2018FY 2017FY 2016
    Total Revenue2,86,501.233,00,263.132,37,569.512,03,065.231,89,410.44
    Total Revenue Growth (%)-4.5826.3916.997.21-22.60
    Total Expenses2,82,939.982,88,295.082,24,684.871,90,309.011,77,629.86
    Total Expenses Growth (%)-1.8628.3118.067.14-25.06
    Profit after Tax (PAT)3,055.367,802.309,008.638,720.947,584.51
    PAT Growth (%)-60.84-13.393.3014.9857.79
    Operating Profit Margin (%)2.174.605.966.686.63
    Net Profit Margin (%)1.072.613.814.334.03
    Basic EPS (₹)15.5339.6745.8044.3457.84
    FY 2020FY 2019FY 2018FY 2017FY 2016
    Total Revenue2,87,464.263,00,258.652,39,332.512,04,811.251,91,315.49
    Total Revenue Growth (%)-4.2625.4616.867.05-20.38
    Total Expenses2,83,712.392,89,819.032,28,046.541,93,768.461,80,664.31
    Total Expenses Growth (%)-2.1127.0917.697.25-22.42
    Profit after Tax (PAT)2,683.197,132.027,976.308,039.307,431.88
    PAT Growth (%)-62.38-10.58-0.788.1746.17
    Operating Profit Margin (%)2.083.955.125.705.92
    Net Profit Margin (%)0.942.393.373.973.92
    Basic EPS (₹)13.6436.2640.5540.87102.78

    All figures in Rs Cr, unless mentioned otherwise

  • AnnualFY 2020FY 2019FY 2018FY 2017FY 2016
    Total Assets1,50,863.561,36,930.381,20,356.061,09,086.2686,421.73
    Total Assets Growth (%)10.1813.7710.3326.23-0.62
    Total Liabilities1,12,274.8996,095.6281,832.4076,308.3256,950.14
    Total Liabilities Growth (%)16.8417.437.2433.99-9.76
    Total Equity38,588.6740,834.7638,523.6632,777.9429,471.59
    Total Equity Growth (%)-5.506.0017.5311.2223.58
    Current Ratio (x)0.720.920.890.801.01
    Total Debt to Equity (x)1.691.111.011.020.73
    Contingent Liabilities15,222.5922,413.2019,878.6827,782.9516,581.67
    AnnualFY 2020FY 2019FY 2018FY 2017FY 2016
    Total Assets1,26,468.981,15,627.251,00,131.1791,989.6375,989.41
    Total Assets Growth (%)9.3815.488.8521.068.98
    Total Liabilities93,254.6078,889.5765,999.6862,321.2548,830.72
    Total Liabilities Growth (%)18.2119.535.9027.633.32
    Total Equity33,214.3836,737.6834,131.4929,668.3827,158.69
    Total Equity Growth (%)-9.597.6415.049.2420.88
    Current Ratio (x)0.700.990.830.790.89
    Total Debt to Equity (x)1.320.740.670.710.50
    Contingent Liabilities10,828.2219,102.4917,372.0713,775.0215,456.70

    All figures in Rs Cr, unless mentioned otherwise

    • Increase in Cash from Investing

      Company has used Rs 11227.56 cr for investing activities which is an YoY increase of 7.43%. (Source: Consolidated Financials)
    AnnualFY 2020FY 2019FY 2018FY 2017FY 2016
    Net Cash flow from Operating Activities7,973.4610,157.1511,068.379,041.1111,119.04
    Net Cash used in Investing Activities-11,227.56-10,451.17-7,065.51-15,273.94-9,232.69
    Net Cash flow from Financing Activities3,583.21207.04-4,217.734,803.96-1,331.57
    Net Cash Flow329.11-86.98-214.87-1,428.87554.78
    Closing Cash & Cash Equivalent528.96199.85286.83607.942,036.81
    Closing Cash & Cash Equivalent Growth (%)164.68-30.32-52.82-70.15-6.92
    Total Debt/ CFO (x)7.734.233.343.481.90
    AnnualFY 2020FY 2019FY 2018FY 2017FY 2016
    Net Cash flow from Operating Activities6,357.757,644.859,009.257,896.9310,233.90
    Net Cash used in Investing Activities-9,263.97-7,536.58-4,740.88-10,129.68-7,855.68
    Net Cash flow from Financing Activities2,940.22-87.49-4,422.92566.56-2,012.35
    Net Cash Flow34.0020.78-154.55-1,666.19365.87
    Closing Cash & Cash Equivalent-98.63-132.63-153.4154.351,719.86
    Closing Cash & Cash Equivalent Growth (%)-25.64-13.55-382.26-96.8427.02
    Total Debt/ CFO (x)6.923.562.542.661.34

    All figures in Rs Cr, unless mentioned otherwise

  • AnnualFY 2020FY 2019FY 2018FY 2017FY 2016
    Return on Equity (%)8.3620.1224.6028.2926.10
    Return on Capital Employed (%)6.8316.3818.8721.7722.48
    Return on Assets (%)2.025.697.487.998.77
    Interest Coverage Ratio (x)2.357.7811.8719.3218.31
    Asset Turnover Ratio (x)188.62217.79195.99184.48217.32
    Price to Earnings (x)20.3710.009.359.777.79
    Price to Book (x)1.702.012.302.762.03
    EV/EBITDA (x)12.137.137.187.505.26
    EBITDA Margin (%)3.615.757.187.737.73
    AnnualFY 2020FY 2019FY 2018FY 2017FY 2016
    Return on Equity (%)8.0719.4123.3627.0927.36
    Return on Capital Employed (%)8.7917.1921.8723.7925.31
    Return on Assets (%)2.126.167.968.739.78
    Interest Coverage Ratio (x)2.728.9214.5423.2719.92
    Asset Turnover Ratio (x)224.86257.09236.11219.81249.11
    Price to Earnings (x)23.2010.9410.5610.598.78
    Price to Book (x)1.872.122.472.872.40
    EV/EBITDA (x)10.917.037.237.905.88
    EBITDA Margin (%)3.415.026.246.646.90
    • Covid blues or structural changes

      During the first quarter of 2020 itself, global energy demand declined by a shocking 3.8% and CO2 emission levels lowered by an unprecedented 5%. Moving ahead, the energy demand and emission levels are likely to remain subdued for a longer period of time as the pandemic situation evolves and economic activity normalizes; however, some structural changes are imminent with the world realizing the power of climatic catastrophes and digitalization emerging as a powerful enabler and even a substitute.

    • Lubricant market matrix

      The Indian lubricant market is the world’s third largest growing market. As per Petroleum Planning and Analysis Cell (PPAC)’s report, India consumed 3,640 TMT of lubricants in the year 2019-20 and it is expected to grow by 2.8% in the year 2020-21. The industry is made up of over 30 players, thus making the lubricant industry highly competitive.

    • LPG- expansion of network is priority

      The LPG Strategic Business Unit (SBU) registered sale of 6.87 MMT with a growth of 5.8% and growth of 0.02% in market share in the LPG Domestic segment in the year 2019-20. LPG has an overall market share of 26.28% amongst major OMCs. Network expansion has been a priority for providing accessibility of LPG to all households in the country, especially in rural areas. The LPG SBU added 214 distributors during the year, thereby taking the total distributor network to 6,110.

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Technicals

  • No Data Available

  • 46%
    Positive Movement
    since 1st Jan 2005
    on basis
    54%
    Negative Movement
    since 1st Jan 2005
    on basis
    Exclude

    Global Meltdown1st Jan 2008 to 10th Nov 2008

    Covid Crisis1st Feb 2020 to 31st Mar 2020

  • R1425.63Pivot

    418.47

    S1407.43
    R2436.67S2400.27
    R3454.87S3382.07
  • 5 Days14 Days28 Days
    14.8712.6112.54

Peers

    • Stock Returns vs Nifty 100

      Stock gave a 3 year return of -13.6% as compared to Nifty 100 which gave a return of 30.66%. (as of last trading session)
    • Stock Returns vs Nifty Energy

      Stock generated -13.6% return as compared to Nifty Energy which gave investors 22.94% return over 3 year time period. (as of last trading session)
    • CHART
    • TABLE
    • 1D
    • 1W
    • 1M
    • 3M
    • 6M
    • 1Y
    • 5Y
  • NAMEP/E (x)P/B (x)ROE %ROCE %ROA %Rev CAGR [3Yr]OPMNPMBasic EPSCurrent RatioTotal Debt/ Equity (x)Total Debt/ CFO (x)
    BPCL21.272.338.366.832.0212.032.170.7915.530.721.697.73
    Indian Oil Corp29.100.99-0.935.55-0.2710.571.92-0.66-0.970.681.3214.56
    HPCL5.591.128.516.632.2512.621.471.1517.320.661.277.20
    Add More
    Annual Ratios (%)

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      Shareholding Patterns

      • Category31 Dec 202030 Sep 202030 Jun 202031 Mar 2020
        Promoters52.9852.9852.9852.98
        Pledge0.000.000.000.00
        FII11.5611.9811.9512.28
        DII20.0620.5620.4819.61
        Mutual Funds13.2613.7613.6612.80
        Others15.4014.4814.5915.13
      • CategoryNo. of SharesPercentage% Change QoQ
        Promoters1,14,91,83,59252.98 %0.00
        Pledge00.00 %0.00
        FII25,08,21,55311.56 %-0.42
        DII43,53,14,43720.06 %-0.50
        MF28,77,43,54313.26 %-0.50
        Others33,39,33,16215.40 %0.92

      Mutual Funds Ownership

      MF Ownership as on 31 December 2020

      • Hybrid: Aggressive Hybrid
        4
        • 571.65

          Amount Invested (in Cr.)

        • 1.6%

          % of AUM

        • -21.05

          % Change (MoM basis)

      • Equity: Large Cap
        • 453.72

          Amount Invested (in Cr.)

        • 0.51%

          % of AUM

        • 2.08

          % Change (MoM basis)

      • Equity: Multi Cap
        2
        • 440.77

          Amount Invested (in Cr.)

        • 2.02%

          % of AUM

        • 0.00

          % Change (MoM basis)

      Futures & Options

        • Expiry Month
        DatePrice

        27-09-2020Current

        415.10-13.50 (-3.15%)

        429.80
        Open
        430.15
        High
        411.35
        Low
        428.60
        Prev Close
        8,762
        Contracts Traded
        66,239.02
        Turnover (₹ Lakhs)
        • Type
        • Expiry Month
        • Strike Price
        DatePrice

        27-09-2020Current

        0.00-108.10 (-100.00%)

        0.00
        Open
        0.00
        High
        0.00
        Low
        108.10
        Close
        0
        Contracts Traded
        0.00
        Turnover (₹ Lakhs)

      Corporate Actions

      • Board Meeting

        Quarterly Results

        Oct 22, 2020

        Board Meeting

        Quarterly Results

        Aug 06, 2020

        General Meeting

        -

        Aug 04, 2020

      • Announced onMeeting on
        Oct 22, 2020Oct 29, 2020
        Quarterly Results
        Aug 06, 2020Aug 13, 2020
        Quarterly Results
        May 28, 2020Jun 03, 2020
        Audited Results & Dividend
        Mar 05, 2020Mar 12, 2020
        Interim Dividend
        Mar 05, 2020Mar 06, 2020
        Interim Dividend
      • Announced onEx-DateDividend%
        Mar 12, 2020Mar 23, 2020165%
        May 20, 2019Aug 21, 201980%
        Feb 08, 2019Feb 21, 2019110%
        May 29, 2018Aug 31, 201870%
        Feb 09, 2018Feb 22, 2018140%
      • Announced onEx-Date
        May 30, 2017Jul 13, 2017
        Bonus Ratio: 1 share(s) for every 2 shares held
        May 26, 2016Jul 13, 2016
        Bonus Ratio: 1 share(s) for every 1 shares held
        May 25, 2012Jul 13, 2012
        Bonus Ratio: 1 share(s) for every 1 shares held
        Sep 28, 2000Dec 18, 2000
        Bonus Ratio: 1 share(s) for every 1 shares held
        Sep 02, 1994Oct 14, 1994
        Bonus Ratio: 2 share(s) for every 1 shares held
      • No Data Available

      • No Data Available

      • Announced onMeeting on
        Aug 04, 2020Sep 28, 2020
        (Cancelled)
        Aug 04, 2020Aug 31, 2020
        -
        Aug 04, 2020-
        (Cancelled)
        Aug 04, 2020-
        (Cancelled)
        Aug 04, 2020-
        (Cancelled)

      About

      Bharat Petroleum Corporation Ltd., incorporated in the year 1952, is a Large Cap company (having a market cap of Rs 89926.37 Crore) operating in Gas & Petroleum sector.

      Bharat Petroleum Corporation Ltd. key Products/Revenue Segments include Petroleum Products which contributed Rs 322514.35 Crore to Sales Value (98.45 % of Total Sales), Oil Crude which contributed Rs 3588.92 Crore to Sales Value (1.09 % of Total Sales), Other Operating Revenue which contributed Rs 1187.32 Crore to Sales Value (0.36 % of Total Sales), Subsidy which contributed Rs 290.19 Crore to Sales Value (0.08 % of Total Sales)for the year ending 31-Mar-2020.

      For the quarter ended 30-09-2020, the company has reported a Consolidated sales of Rs 49408.60 Crore, up 30.03 % from last quarter Sales of Rs 37999.25 Crore and down -23.15 % from last year same quarter Sales of Rs 64289.50 Crore Company has reported net profit after tax of Rs 2671.57 Crore in latest quarter.

      The company’s top management includes Dr.K Ellangovan, Mr.Vinay Sheel Oberoi, Mr.Rajiv Bansal, Mr.Rajesh Aggarwal, Mr.R Ramachandran, Mr.N Vijayagopal, Mr.K Padmakar, Mr.Harshad P Shah, Mr.D Rajkumar, Mr.Arun Kumar Singh, Mrs.J M Shanti Sundharam. Company has Borkar & Muzumdar as its auditors. As on 31-12-2020, the company has a total of 2,169,252,744 shares outstanding.

      About BPCL

      Bharat Petroleum Corporation Ltd., incorporated in the year 1952, is a Large Cap company (having a market cap of Rs 89926.37 Crore) operating in Gas & Petroleum sector. Show More

      Key Indices Listed On

      Nifty 50, Nifty 100, Nifty 200, Nifty 500, S&P BSE 500

      Address

      Bharat Bhavan,P. B. No. 688,4 & 6 Currimbhoy Road,Mumbai, Maharashtra - 400001

      Executive Leadership

      AK

      Arun Kumar Singh

      Director - Marketing
      AD

      Arunabh Deb

      General Manager
      AK

      Ashok K Sharma

      Chief Procurement Officer
      DC

      D C Patra

      Chief General Manager
      Show More

      Auditors

      CVK & Associates
      Borkar & Muzumdar

      BPCL Share Price Update

      Bharat Petroleum Corporation Ltd. share price moved down by -2.84% from its previous close of Rs 426.70. Bharat Petroleum Corporation Ltd. stock last traded price is 414.60

      Share PriceValue
      Today/Current/Last414.60
      Previous Day426.70

      DATA SOURCES: TickerPlant (for live BSE/NSE quotes service) and Dion Global Solutions Ltd. (for corporate data, historical price & volume, F&O data). Sensex & BSE Quotes and Nifty & NSE Quotes are real-time and licensed from BSE and NSE respectively. All timestamps are reflected in IST (Indian Standard Time).

      DISCLAIMER: Any and all content on this website including tools/analysis is provided to you only for convenience and on an “as-is, as- available” basis without representation and warranties of any kind. The content and any output of such tools/analysis is for informational purposes only and should not be relied upon or construed as an investment advice or guarantee for any specific performance/returns advice or considered as recommendation for the purchase or sale of any security or investment. You are advised to exercise caution, discretion and independent judgment with regards to the same and seek advice from professionals and certified experts before taking any decisions.

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      Markets Data

      *

      Key Metrics

      • This is a ratio arrived at by dividing the current market price of a stock by its latest (annual or annualized) earnings per share. Here we have taken the TTM (trailing twelve months) adjusted earnings per share.

      • Earnings per share (TTM) tells the profit after tax earned on a per share basis by a stock over the last twelve months or four quarters.

      • MCap or Market capitalization of a stock is calculated by multiplying the total number of shares outstanding of that particular stock with its current market price.

      • This is the ranking of a company within its sector based on MCap or Market capitalization. Higher the market capitalization of a company, higher the rank it is assigned.

      • Price to Book represents the ratio of current market price of a stock to its book value per share. The book value itself is arrived at by dividing the net worth of a company by the total number of shares outstanding of the company at that time.

      • Dividend Yield calculates the amount of full year dividend declared by a company as a percentage of the current market price of a stock. All other things being equal, higher the dividend yield of the stock, the better it is for investors.

      • Face value of a stock is the value ascribed to the stock as per the balance sheet of the company. The dividend declared by a company is usually declared as a percentage of face value.

      • Beta (β) is a measure of systematic risk. It describes the responsiveness of a stock to fluctuations in the market. Beta coefficient of more than 1 denotes that a security is more volatile than its benchmark and less than 0 signifies that security return is not correlated to market movement.

      • Volume Weighted Average Price represents the average price of a security over a particular time period (example one trading day) weighted by the volume traded at each price point.

      • This represents the 52 week high and low price of the security. It is also the 1 year high and low of the security. This represents the highest and lowest price touched by the security during the past 52 weeks or 1 year including today.

      • Book value represents the value arrived at by subtracting the total liabilities from the total assets of the company. On dividing this value with the total number of shares outstanding for the company, we can arrive at book value per share. Book value is also known as Net Asset Value of a company.

      • This is a ratio of market capitalisation of a company’s stock to its annual sales. The market capitalization here is taken for the fully paid-up equity share of the company.

      Technicals

      • Lorem Ipsum is simply dummy text of the printing and typesetting industry. Lorem Ipsum has been the industry's standard dummy text ever since the 1500s, when an unknown printer took a galley of type and scrambled it to make a type specimen book. It has survived not only five centuries, but also the leap into electronic typesetting, remaining essentially unchanged. It was popularised in the 1960s with the release of Letraset sheets containing Lorem Ipsum passages, and more recently with desktop publishing software like Aldus PageMaker including versions of Lorem Ipsum.

        Lorem Ipsum is simply dummy text of the printing and typesetting industry. Lorem Ipsum has been the industry's standard dummy text ever since the 1500s, when an unknown printer took a galley of type and scrambled it to make a type specimen book. It has survived not only five centuries, but also the leap into electronic typesetting, remaining essentially unchanged. It was popularised in the 1960s with the release of Letraset sheets containing Lorem Ipsum passages, and more recently with desktop publishing software like Aldus PageMaker including versions of Lorem Ipsum.

      • Lorem Ipsum is simply dummy text of the printing and typesetting industry. Lorem Ipsum has been the industry's standard dummy text ever since the 1500s, when an unknown printer took a galley of type and scrambled it to make a type specimen book. It has survived not only five centuries, but also the leap into electronic typesetting, remaining essentially unchanged. It was popularised in the 1960s with the release of Letraset sheets containing Lorem Ipsum passages, and more recently with desktop publishing software like Aldus PageMaker including versions of Lorem Ipsum.

        Lorem Ipsum is simply dummy text of the printing and typesetting industry. Lorem Ipsum has been the industry's standard dummy text ever since the 1500s, when an unknown printer took a galley of type and scrambled it to make a type specimen book. It has survived not only five centuries, but also the leap into electronic typesetting, remaining essentially unchanged. It was popularised in the 1960s with the release of Letraset sheets containing Lorem Ipsum passages, and more recently with desktop publishing software like Aldus PageMaker including versions of Lorem Ipsum.

      • Lorem Ipsum is simply dummy text of the printing and typesetting industry. Lorem Ipsum has been the industry's standard dummy text ever since the 1500s, when an unknown printer took a galley of type and scrambled it to make a type specimen book. It has survived not only five centuries, but also the leap into electronic typesetting, remaining essentially unchanged. It was popularised in the 1960s with the release of Letraset sheets containing Lorem Ipsum passages, and more recently with desktop publishing software like Aldus PageMaker including versions of Lorem Ipsum.

        Lorem Ipsum is simply dummy text of the printing and typesetting industry. Lorem Ipsum has been the industry's standard dummy text ever since the 1500s, when an unknown printer took a galley of type and scrambled it to make a type specimen book. It has survived not only five centuries, but also the leap into electronic typesetting, remaining essentially unchanged. It was popularised in the 1960s with the release of Letraset sheets containing Lorem Ipsum passages, and more recently with desktop publishing software like Aldus PageMaker including versions of Lorem Ipsum.

      • Pivot points are indicative support and resistance levels which are calculated on basis of previous day’s high, low and closing prices. Pivot level for Monday’s trade would be based on Friday’s prices and Monday’s, high, low and close price would go into calculation of pivot levels for Tuesday’s trading session.

        There are two underlying assumptions in pivot points. First, the specific price level indicated by R1, R2 and R3 may act as a barrier or resistance in an uptrend. So, if a stock moves up above these pivots levels, the uptrend gets confirmed. Second these specific price levels may see an increased activity, hence may be used as levels to book profit by traders with a long positions. For traders with short position, these points are often helpful in determining what should be the stop loss for a trade.

        Similarly, in case of support levels as indicated by S1, S2 and S3, they may act as price level where a stock might get a breather when it is slipping southward. In case these supports levels are broken it is a confirmation of a down trend. The stock may also see increased activity close to pivot levels. They may be used by trader may use them to put stop loss for a long trade. If a trader has short position, the pivot level may help in determine a level, where profit may be booked.

        Like any other technical indicator, pivots levels cannot and should not be used as single factor while taking a trading decision. They should be combined with other technical indicators. It could be short term moving averages, stochastic, moving average convergence divergence (MACD) or overbought level as indicated by relative strength index (RSI). For example, if a breakdown of support level (S1, S2 or S3) is accompanied with stock price also moving below its short term moving average or stochastic on daily charts giving a sell signal, it would add to weightage to the decision of taking a short trade.