Earnings Review
BPCL's Jul-Sept PAT down 72% on year as GRM falls
This story was originally published at 19:15 IST on 25 October 2024
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--BPCL Jul-Sept net profit INR 23.97 bln
--Analysts saw BPCL Jul-Sept net profit INR 37.87 bln
--BPCL Jul-Sept net profit INR 23.97 bln vs 85.01 bln
--BPCL Jul-Sept revenue INR 1.18 tln vs 1.17 tln
--BPCL Jul-Sept average GRM $6.12/bbl vs $15.42/bbl year ago
--BPCL Jul-Sept market sales INR 12.39 mln tn vs 12.19mln tn year ago
--BPCL Jul-Sept refinery throughput 10.28 mln tn vs 9.35 mln tn yr ago
--BPCL Apr-Sept net profit INR 54.12 bln vs 190.52 bln
--BPCL Apr-Sept revenue INR 2.46 tln vs 2.45 tln
--BPCL Board decided to not raise capital via rights issue
By Sunil Raghu
AHMEDABAD – State-owned Bharat Petroleum Corp Ltd's net profit for the September quarter slumped 71.8% from a year ago to INR 23.97 billion, with the decline being more than what analysts had estimated. The drop in net profit was mainly because the refining margin contracted 60.3% on year to $6.12 per barrel. This was the third successive quarter when BPCL's net profit has fallen on year.
Global crude oil prices rose in the September quarter on the back of heightened geopolitical tensions. This bumped up the company's cost of raw materials consumed during Jul-Sept by 15.8% on year to INR 576.04 billion. Crude oil is a key raw material used by oil marketing companies and any surge in prices of the commodity impacts their profitability.
An average of estimates from 11 brokerages had pegged BPCL's net profit for the September quarter at INR 37.87 billion, down 55.45% on year. The refiner's revenue was expected to rise 3.8% on year to INR 1.07 trillion.
BPCL's board said that it had decided not to pursue raising capital through a rights issue, owing to "improved" internal generation of funds.
In June 2023, the company's board approved raising INR 180 billion via a rights issue. BPCL, a Maharatna public sector undertaking, said the ministry of petroleum and natural gas had also notified it about the non-allocation of funds for capital support to oil marketing companies in the Union Budget for 2024-25. This has already seen another state-owned oil marketing company Indian Oil Corp. Ltd. scrap its plans for a rights issue of INR 220 billion.
BPCL's crude oil refinery throughput was 10.28 million tonnes in Jul-Sept, from 9.35 million tonnes a year ago. The oil refining and marketing company earned a revenue of INR 1.18 trillion, up 1.1% from last year.
BPCL’s gross refining margin in Jul-Sept fell 60.3% on year to $6.12 per barrel from $15.42 per barrel a year ago. The gross refining margin, or GRM, is the difference between the price of crude oil and the total value of petroleum products produced by a refinery. It is a key indicator of a refinery's efficiency and profitability.
The company's market sales of BPCL during the quarter were higher at 12.39 million tonnes, compared with 12.19 million tonnes a year ago. The total expenses of the company, including finance costs, rose 9.05% on year to INR 1.16 trillion in Jul-Sept. The finance costs fell 38.8% to INR 4.75 billion from INR 7.68 billion a year ago. The cost of materials consumed rose 15.7% on year to INR 576.04 billion from INR 497.68 billion a year ago.
BPCL's net profit for Apr-Sept stood at INR 54.12 billion, on the revenue of INR 2.46 trillion. The company’s net profit was at INR 190.52 billion on a revenue of INR 2.45 trillion a year ago.
On Friday, shares of BPCL rose to an intraday high of INR 323.60. The stock traded mostly in the red during the day and ended down 4.7% at INR 306.30 on the National Stock Exchange. End
US$1 = INR 84.08
Edited by Vidhi Verma
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