Shares of Bharat Petroleum Corporation (BPCL) rallied 5 per cent to Rs 621.80 on the BSE in Friday’s intra-day trade after the company’s board recommended issue of bonus shares in the ratio of 1:1 i.e. one new bonus equity share for each existing shares.
The Maharatna public-sector undertaking (PSU) will issue one additional share for each share held. BPCL said that the record date for the issue has been fixed as June 22, 2024 to determine the eligibility of shareholders to receive the bonus shares.
The state-run oil marketing company (OMC’s) board has also recommended a final dividend of Rs 21 per equity share (pre-bonus) of face value of Rs 10 each for the year 2023-24, which translates into a final dividend of ₹10.5 per share (post-bonus) of the same face value, subject to the approval of shareholders.
BPCL Q4 Results – Key Metrics
In 2023-24 fiscal year (April 2023 to March 2024), BPCL’s refineries processed 39.93 million tonnes of crude, compared to 38.53 million tonnes in FY23. The market sales increased 4.33 per cent to 51.04 million tonnes in FY24 from 48.92 million tonnes in FY23.
In a statement, BPCL said it achieved an average ethanol blending percentage of 11.69 per cent during 2023-24 with highest blending in the fourth quarter of FY24 at 12.15 per cent. BPCL added 308 new petrol pumps, taking total network strength to 21,840. Also, 323 CNG stations were commissioned, taking their total count to 2,031.
“We’ve achieved record-breaking operational and financial performance across refining throughput, domestic market sales, and profitability. Our profit after tax soared to a historic Rs 26,673.50 crore,” said G Krishnakumar, chairman and managing director, BPCL.
BPCL reported a 30 per cent fall in its March quarter net profit on lower refining margins. The consolidated net profit of Rs 4,789.57 crore in January-March — the fourth quarter of the 2023-24 fiscal — was compared to ₹6,870.47 crore in the same period of the preceding financial year. The turnover was almost flat at Rs 1.32 lakh crore when compared to Rs 1.34 lakh crore in January-March 2023.
The EBITDA (earnings before interest, taxes, depreciation, and amortization) of India’s third-largest oil refiner by capacity dropped 19.4 per cent in the fourth quarter mainly because of the twin impact of falling refining margins and a pre-election petrol and diesel price cut despite rise in input or crude oil prices.
For the full 2023-24 fiscal, BPCL reported a record net profit of ₹26,858.84 crore as opposed to a profit of ₹2,131.05 crore in the previous year. BPCL earned $14.14 on turning every barrel of crude oil into fuel as against a gross refining margin of $8.83 a barrel in the preceding fiscal year.
What Do Analysts Say?
Citi has issued a ‘buy’ call on BPCL with a target price of Rs 760. The company’s pre-tax profit came in 20 percent below the brokerage’s estimates, and net income saw a 39 percent decline due to a Rs 1,800 crore impairment of investments in an arm.
Despite this, the full-year FY24 EPS remained strong at Rs 125 per share, analysts noted.
According to Morgan Stanley, Indian fuel refiners posted strong quarterly earnings, indicating a structural shift towards higher profitability in FY24.
The investments made in refinery hardware are beginning to yield results. BPCL notably outperformed in margin, while HPCL managed to gain market share in fuel, the international brokerage noted.
The reduction in net profit in Q4 may have been due to lower gross marketing margins on petrol and diesel. Margins had reduced to an average of Rs 8 and Rs 3.4 per litre, respectively, during the quarter, according to a note by Motilal Oswal. On the other hand, a pump price cut of Rs 2 since March 15 may have reduced retail margins as well. The brokerage firm has a ‘neutral’ rating on BPCL.
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