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Informist, Thursday, Aug. 14, 2025

 

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--BPCL: Russian crude oil accounted for 34% of co's crude basket in Apr-Jun 
--CONTEXT: Comments by BPCL mgmt in post-earnings call with analysts 
--BPCL: Hope to maitain Russian oil imports at 30-35% if no new US sanctions 
--BPCL: Group debt at INR 394.52 bln; invested INR 175.80 bln surplus funds 
--BPCL: Loss on sale of LPG in Apr-Jun INR 150/cylinder 
--BPCL: Loss on sale of LPG in Jul-Aug INR 100/cylinder 
--BPCL: See loss on sale of LPG in Sept at INR 30/cylinder 
--BPCL: Expect 20-25% of INR 300 bln LPG compensation announced by govt 
--BPCL: Plan capex of INR 200 bln-INR 250 bln in FY26 
--BPCL: Plan capex of around INR 350 bln each in FY27, FY28, FY29 
--BPCL: To spend INR 46 bln by end of FY26 on expansion of Bina refinery

 

By Sunil Raghu & J. Navya Sruthi

 

AHMEDABAD/MUMBAI – Bharat Petroleum Corp. Ltd. plans capital expenditure of INR 200 billion to INR 250 billion in 2025-26 (Apr-Mar) and will augment it to over INR 350 billion by FY29, the company's management said in conference call with analysts Thursday. Of the planned capex in FY26, the company has spent nearly INR 23.82 billion in Apr-Jun.

 

"Based on the current approved projects, in case if any new projects are added, the capex numbers will vary...FY27, FY28 we are expecting INR 350 billion. And FY28, FY29, also in the range of INR 350 billion," Chief Financial Officer V.R.K. Gupta told analysts while discussing the company's financial results for the quarter ended June.

 

Sharing updates on some of the proposed projects, the management said that expansion at its refinery in Bina, Madhya Pradesh, has made steady progress, achieving overall progress of around 14% against the scheduled 15.9%. BPCL said it had incurred around INR 8 billion on the expansion, with the overall commitment being INR 68 billion.

 

BPCL has also achieved physical progress of 12.2%, against the scheduled 16%, at its polypropylene project at Kochi in Kerala. The company has proposed expenditure of INR 2.6 billion on this project.

 

The board recently approved setting up of a petro-residue fluidized catalytic tracking unit and associated facilities at its refinery in Mumbai, Maharashtra, at a cost of INR 142 billion. The expected mechanical completion of this project is May 2029. The project will replace the nearly 40-year-old crude condensation unit and fluidised catalytic cracker units at the Mumbai refinery.

 

The company said its overall standalone gross borrowings as of Jun. 30 were INR 107.09 billion and gross borrowings at group level were INR 394.52 billion. The current investments, including surplus funds in oil bonds of about INR 175.80 billion, put BPCL at a net surplus on a standalone basis, Gupta said. "Debt-equity with a ratio net of current investments at group level will be around 0.25," he said.

 

BPCL's refinery throughput increased to 10.42 million tonnes in Apr-Jun from 10.11 million tonnes a year ago. The company's domestic market sales totalled 13.58 million tonnes in the June quarter, up 3.2% on year. The company's export market sales increased to 450,000 tonnes from 270,000 tonnes a year ago.

 

The public-sector enterprise reported a net profit of INR 61.24 billion for the June quarter, up 103% on year and nearly 91% on a trailing basis. Analysts had expected the company to report a bottom line of INR 61.96 billion. The company's revenue increased just over 1% on year and 2% on a trailing basis to INR 1.296 trillion. This was higher than the INR 1.012 trillion expected by analysts. The company's top line, net of excise duty, was largely flat on year at INR 1.125 trillion.

One of the key reasons for the flat revenue growth was loss or under-recovery on sale of liquefied petroleum gas. Oil marketing companies sell LPG to a large section of their consumers at subsidised rate, which is compensated by the government. Recently, the government announced that it would distribute INR 300 billion in LPG under-recovery compensation to oil marketing companies. BPCL said it expects to get 20-25% of this from the government. Giving details of loss on sale of LPG, BPCL said they lost INR 150 per cylinder in Apr-Jun, INR 100 per cylinder in Jul-Aug. and expect to lose INR 30 per cylinder in September.

 

On the operational front, BPCL's average gross refining margin fell to $4.88 per barrel from $7.86 per barrel a year ago. The gross refining margin of the Mumbai refinery was $4.14 per barrel and the margins of Kochi and Bina refineries were $5.69 per barrel and $4.50 per barrel, respectively.

 

The refining margins could have been worse if not for use of relatively cheaper Russian crude. Russia had offered a discount of $2.8-$3.1 per barrel to BPCL in Jan-Mar and $3.0-$3.5 a barrel in Apr-Jun. This saw BPCL increase share of Russian crude in its overall crude oil basket. During Jan-Mar, Russian crude accounted for 24% of the total crude sourced by the company, which rose to 34% in Apr-Jun.

 

The management Thursday said if there were no new tariffs related to Russian crude, they would want to maintain the level of Russian crude imports at 30-35%, though the company has identified alternatives in case there is any change with regards to pricing or sourcing of Russian oil going forward. "In the current environment of narrowing discounts for Russian crude, the company's agile sourcing strategy has enabled procurement of alternative grades from Brazil, the US, West Africa, and guided by economics and market conditions, and maintaining a competitive edge in crude selection," BPCL's management said.

 

At 1445 IST, shares of BPCL were at INR 318.20 on the National Stock Exchange, down 1.3% from Wednesday.  End

 

IST, or Indian Standard Time, is five-and-a-half hours ahead of GMT

 

Edited by Ashish Shirke

 

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