BPCL Q4 Results: Profit Jumps Over Fourfold On Exceptional Gain, Lower Tax Expense

Bharat Petroleum Corp.'s quarterly profit rose, beating estimates, amid lower tax expenses and an exceptional gain arising from the sale of its subsidiary.

Net profit of the oil marketer increased 330% over the preceding three months to Rs 11,940.13 crore in the quarter ended March, according to its exchange filing. That includes an exceptional gain of Rs 6,993 crore. The consensus estimate of analysts tracked by Bloomberg was Rs 1,980 crore.

Highlights (QoQ)

• Revenue rose 15.2% to Rs 76,882 crore, against the Rs 76,410-crore forecast.
• Operating profit increased 17.5% to Rs 5,057.8 crore.
• Other income rose 9.9% to Rs 1,664 crore.
• Operating margin expanded to 6.6% from 6.5%.
• Gross refining margin—what a company earns by converting one barrel of crude into fuel—stood at $4.06 per barrel in the fiscal ended March 2021 against $2.5 in FY20.

The oil marketer said its tax expenses fell 78% in the reported quarter.

BPCL has recommended a final dividend of Rs 58 per share, which includes a one-time special dividend of Rs 35. This, the company said, is in addition to its interim dividend of Rs 21 per share.

Benchmark Singapore gross refining margin rose to $1.8 a barrel in the fourth quarter from $1.2 in the preceding three months.

Rising benchmark GRM and improved petrol spreads supported BPCL's refining margin in the fourth quarter. That's despite diesel cracks—difference between crude oil and product price—lagging petrol cracks in the past few months amid uncertainty in diesel demand recovery.

Brent crude price rose 36.1% sequentially to $60.7 per barrel in the reported period. But the oil firm's marketing margin—what it earns by selling every litre of fuel—remained under pressure as retail fuel prices were left unchanged ahead of the recent state elections.

BPCL's standalone refinery throughput stood at 8.4 MMT in the fourth quarter compared with 7.2 MMT in the previous three months. The industry refining volumes fell 13% in FY21, with 92% utilisation compared with 105% in FY20.

The central government is planning to divest its 52.9% stake in BPCL, valued at more than Rs 50,000 crore. The sale is expected to complete in the ongoing fiscal.

BPCL's other state-owned peers—Indian Oil Corp. and Hindustan Petroleum Corp.— too, saw their profit and revenue rise sequentially in the quarter ended March. Their operating margin also expanded.

Shares of BPCL ended 0.7% lower on May 26 before the earnings were announced, compared with a 0.75% gain in the benchmark S&P BSE Sensex.