BPCL rises 4% despite weak fourth quarter performance
Shares of Bharat Petroleum Corporation (BPCL) rose 5 per cent to Rs 621.80 on the BSE in intra-day trade on Friday.
Shares of Bharat Petroleum Corporation (BPCL) rose 5 per cent to Rs 621.80 on the BSE in intra-day trade on Friday after the company's board recommended issuance of bonus shares at 1:1 ratio. This means granting one new bonus share for each existing share. .
Maharatna Public Sector Undertaking (PSU) will issue one additional share for each share held. BPCL said it has set an issuance record date of June 22, 2024 to determine the shareholders' eligibility to receive the bonus shares.
The board of the state-owned Oil Marketing Company (OMC) has also recommended a final dividend of ₹21 per share (pre-bonus) of face value of ₹10 per share in 2023-24, which translates into final dividend of ₹ per share of the same face value subject to shareholder approval. 10.5 (Post Bonus).
BPCL Q4 Results – Key Indicators
In fiscal year 2023-24 (April 2023 to March 2024), BPCL's refineries processed 39.93 million tonnes of crude oil, compared to 38.53 million tonnes in FY23. Market sales increased by 4.33% from 48.92 million tonnes in FY23 to 51.04 million tonnes in FY24.
BPCL said in a statement that it achieved an average ethanol blending ratio of 11.69 per cent during 2023-24 and achieved the highest blending ratio of 12.15 per cent in the fourth quarter of FY24. BPCL has added 308 new petrol pumps, taking its total network capacity to 21,840. Additionally, 323 CNG charging stations were put into operation, bringing the total number of charging stations to 2,031.
“We achieved record operating and financial performance in terms of refining throughput, domestic market sales and profitability. Profit after tax soared to a historic Rs 26,673.50 crore,” said G Krishnakumar, Chairman and Managing Director, BPCL.
BPCL reported a 30% decline in net profit in the March quarter due to falling refining margins. Consolidated net profit for the fourth quarter of fiscal 2023-24, January to March, stood at Rs 478.957 billion, compared to Rs 687.047 billion in the same period of the previous fiscal. The turnover was almost flat at Rs 1.32 lakh crore compared to Rs 1.34 lakh crore in January-March 2023.
India's third-largest refiner's earnings before interest, taxes, depreciation and amortization (EBITDA) declined 19.4% in the fourth quarter, mainly due to the twin impacts of lower refining margins and pre-election petrol and diesel prices. Production cuts despite rising input prices or crude oil prices.
For the entire financial year 2023-24, BPCL reported a record net profit of ₹26,858.84 crore as against profit of ₹2,131.05 crore in the previous year. BPCL earned $14.14 by converting a barrel of crude oil into fuel, compared to gross refining margin of $8.83 per barrel in the previous fiscal.
What do analysts say?
Citi issued a ‘buy’ call on BPCL with a target price of Rs 760. The company's pre-tax profit was 20 per cent lower than brokerage estimates, and net profit fell 39 per cent due to impairment of investments of Rs 1,800 crore. On your arm.
Nonetheless, full-year 2024 EPS remained strong at ₹125 per share, analysts noted.
According to Morgan Stanley, Indian fuel refiners posted strong quarterly profits, indicating a structural shift towards higher profitability in FY24.
Investments in refinery hardware are starting to pay off. BPCL was noticeably ahead in terms of margins, while HPCL gained market share in the fuel segment, the international brokerage noted.
The decline in net income in the fourth quarter can be attributed to lower gross marketing margins for gasoline and diesel. Margins declined to an average of Rs 8 and Rs 3.4 per liter respectively during the quarter, according to a note from Motilal Oswal. On the other hand, a Rs 2 reduction in pump prices after March 15 may also reduce retail margins. The brokerage firm has assigned a ‘neutral’ rating to BPCL.
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