(Reuters) -India’s state-run refiner Bharat Petroleum Corp (BPCL) reported a smaller-than-expected fourth-quarter profit decline on Tuesday, helped by a dip in crude oil prices.
Standalone net profit fell 24% to 32.14 billion rupees (about $377 million), while analysts expected 29.70 billion rupees, as per data compiled by LSEG. Revenue from operations fell 4% to 1.27 trillion rupees.
Lower crude prices benefit refiners, as they boost refining margins -the profit from making refined products from one barrel of oil.
For further earnings highlights, (click here).
KEY CONTEXT
BPCL, the country’s third-largest oil refiner by capacity, along with peers Indian Oil and Hindustan Petroleum have been hurt by losses in the cooking gas or LPG segment as the government kept domestic LPG prices unchanged. While overall fuel demand fell in two of the three months, LPG demand was higher for most of the quarter.
Analysts said the cost of crude oil – used by refiners as raw material – fell in the quarter, helping cushion the blow from LPG losses. In the quarter, international benchmark Brent crude prices fell 8.4% on-year to $75 per barrel, as per Systematix Research.
BPCL’s average gross refining margin was $6.82 per barrel for the year ended March 31, compared to $14.14 per barrel a year ago. It did not report quarterly margins.
PEER COMPARISON
Valuation (next 12 Estimates (next 12 Analysts’ sentiment
months) months)
RIC PE EV/EBITDA Revenue Profit Mean No. of Stock to Div
growth (%) growth (%) rating* analyst price yield
s target** (%)
Bharat Petroleum 9.76 6.80 -0.24 3.60 Buy 23 0.90 3.47
Corporation
Hindustan Petroleum 8.41 6.90 -7.33 60.39 Buy 15 0.92 5.52
Corp
Indian Oil 8.93 6.94 -4.58 103.18 Buy 21 0.90 8.91
Corporation Ltd
Reliance Industries 20.59 10.66 3.76 -87.70 Buy 31 0.84 0.38
* The mean of analyst ratings standardised to a scale of Strong Buy, Buy, Hold, Sell, and Strong Sell
** The ratio of the stock’s last close to analysts’ mean price target; a ratio above 1 means the stock is trading above the PT
JANUARY-MARCH STOCK PERFORMANCE
— All data from LSEG– $1 = 85.2130 rupees
(Reporting by Manvi Pant in Bengaluru; Editing by Eileen Soreng)
