BPCL Ltd. Q4FY21 - Earning Analysis | Globe Capital Market LTD.
BPCL Ltd. Q4FY21 – Earning Analysis

At the CMP of Rs. 471, the stock is trading at full year P/E multiple of 5.75 times with the full year EPS of Rs 81.87 per share.

Q4 FY21 Overview and Verdict
Rs. 471
Higher than estimates

At the CMP of Rs. 471, the stock is trading at full year P/E multiple of 5.75 times with the full year EPS of Rs 81.87 per share.

The Company has reported a net profit of Rs 11,940 crore for the quarter ended March as against a net loss of Rs 1,361 crore in the year-ago quarter. The profit includes an exceptional gain of Rs 6,993 crore. The consensus estimate of analysts tracked by Bloomberg was Rs 1,980 crore.

The company’s revenue from operations rose 21.5% on a year-on-year basis to Rs 98,755.6 crore for the quarter.

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. 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.

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

During the quarter, the company made gains of Rs 9,422 crore from sale of stake in subsidiary Numaligarh Refinery, took an impairment of assets worth Rs 2,032.8 crore related to subsidiary Bharat Petro Resources and took a one-time hit on employee share-based expenses.

In the year-ago quarter, BPCL had suffered a one-time loss worth Rs 1,080.8 crore due to write-down of inventory in lieu of the crash in global crude oil prices in March 2020.

During the quarter, the company’s refinery throughput remained largely unchanged at 8.39 million tonnes, whereas market sales grew 4 per cent on-year to 11.17 million tonnes.

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.


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