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Nirmal Bang Report
Bharat Petroleum Corporation Ltd. reported standalone loss of Rs 62.91 billion for Q1 FY23, which was higher than our/street estimate of a loss of Rs 28.9 billion/Rs 46.4 billion- the higher loss was due to the higher-than-expected loss in the marketing segment and higher forex loss.
We have cut FY23E of BPCL by 42.8% and FY24E a tad. We have cut estimates based on the net impact of:
raised gross refining margin forecast, in line with the current elevated refinery margins and
pressure on retail margins in motor spirit/high speed diesel due to sustained increase in global MS/HSD spreads, compounding the pain caused by brent crude persisting above $100/barrel of oil.
We have also built in the impact of potential inventory losses of Rs 77.7 billion/Rs 78.5 billion in FY23E/FY24E, likely arising from a potential correction in oil/fuel prices, as per our declining oil price forecast, which is pinned to expectations of a global demand slowdown.
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