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Informist, Saturday, Oct. 25, 2025

 

By Sunil Raghu

 

AHMEDABAD – Better gross refining margins and firm marketing margins of retail fuels such as petrol and diesel are expected to boost the net profit of state-owned Bharat Petroleum Corp. Ltd. for the September quarter. On the other hand, muted refining output due to a maintenance shutdown at its Bina and Vizag refineries may act as a minor drag on the revenue, analysts said.

 

The average of estimates by 10 brokerages pegs Bharat Petroleum Corp. Ltd.'s net profit for the September quarter at INR 45 billion, a sharp jump of nearly 86% from the year-ago quarter, boosted by firm fuel marketing margins. The estimates for net profit range from a high of INR 81 billion by HDFC Securities Ltd. to a low of INR 29.4 billion by ICICI Securities Ltd.

 

BPCL's revenue is expected to rise 6% on year to INR 1.1 trillion in the September quarter, driven by higher gross refining margins and lower crude oil prices, despite lower refining throughput. Revenue forecasts range from INR 1.17 trillion by JM Financial Institutional Securities Pvt. Ltd. to INR 926 billion by Motilal Oswal Financial Services Ltd.

 

In the June quarter, BPCL had posted a net profit of INR 61 billion on revenue of INR 1.13 trillion. In the year-ago quarter, its net profit came in at INR 24 billion on revenue of INR 1.03 trillion. The company is slated to announce its September quarter results on Friday.

 

The 10 brokerages polled estimate BPCL's earnings before interest, tax, depreciation and amortisation for the latest quarter to be around INR 75 billion. BPCL's gross refining margin, or GRM, is expected to be in the range of $5.6–$12.4 per barrel for the September quarter due to an improvement in gasoil and aviation turbine fuel crack spreads. Most analysts forecast BPCL's GRM for the September quarter to be around $9 per barrel. This is higher than the $4.9 per barrel reported for the June quarter and the same as that reported for the March quarter.

 

Gross refining margin reflects the difference between the cost of crude oil and the value of refined petroleum products. It is a key indicator of a refinery's operational efficiency and a key profitability metric for refiners. A product crack, on the other hand, represents the difference between the price of a barrel of crude oil and that of a refined product. Higher cracks translate to better profitability for refiners processing crude into refined fuels.

 

Analysts estimate BPCL's marketing volume in the September quarter at around 13 million tonnes, up 4% on year. The brokerages see blended marketing margins for BPCL at about INR 3 per litre, Motilal Oswal said. As for refining throughput, BPCL's September quarter throughput is likely to fall 2% on year due to a maintenance shutdown of its Kochi refinery, Nuvama Wealth Management Ltd said. However, it sees BPCL's EBITDA margin jump 60% on year, led by a 27% on-year rise in refining margins and lower under-recoveries on liquefied petroleum gas sales due to a rise in cylinder prices, and a 3% on-year drop in propane prices. The Bina refinery of BPCL had also undergone minor shutdown during the quarter, Prabhudas Lilladher said.

 

Looking ahead, analysts are keen to hear the BPCL management's updates on the company's expansion projects, particularly the construction timeline for the proposed 9-million-tonne Andhra green field refinery. Analysts will also watch out for progress on the INR-600-billion petrochemicals complex planned alongside the Andhra refinery and will want to know whether the project remains on track to become operational in 2027-28 (Apr–Mar).

 

On Friday, shares of BPCL closed at INR 330.45 per share on the National Stock Exchange, down 0.3% for the day and up nearly 4% from INR 318.20 since the company announced its June quarter earnings.

 

Of the 14 research reports on the company available with Informist, nine brokerages have a 'buy' or equivalent rating with an average target price of INR 397 per share. Three analysts have 'sell' rating with an average target price of INR 262 per share, while the remaining two have a 'hold' call for the stock.

 

Following are the Jul-Sept earnings estimates for BPCL from 10 brokerages in descending order by the estimate of net profit in INR million:

 

Brokerage	Net sales (in INR million)	Net profit (in INR million)	EBITDA (in INR million)
HDFC Securities Ltd.	1,105,000	81,000	118,000
Nomura Equity Research	1,145,000	51,000	81,000
Motilal Oswal Financial Services Ltd.	926,347	46,125	74,332
YES Securities (India) Ltd.	990,063	45,541	75,187
Nuvama Wealth Management Ltd.	1,072,667	43,997	72,115
Emkay Global Financial Services Ltd.	1,090,087	42,253	74,418
Prabhudas Lilladker Pvt Ltd.	1,132,200	37,600	70,400
Kotak Securities Ltd.	1,092,686	36,634	64,113
JM Financial Institutional Securities Pvt. Ltd.	1,177,921	32,313	60,684
ICICI Securities Ltd.	1,168,300	29,400	58,800
Average	1,090,027.10	44,586.30	74,904.90

 

End

 

US$1 = INR 87.85

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

 

Edited by Avishek Dutta

 

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