BPCL Q3 net profit jumps 82% on higher refining, market margins

State-owned Bharat Petroleum Corporation Ltd (BPCL) on Monday reported an 82% jump in its December quarter net profit on the back of higher-than-expected refining margins and a rise in margins on fuel sales. Its consolidated net profit of Rs 3,181.42 crore in October-December - the third quarter of the current fiscal year, stated on April 1, 2023 - compares to Rs 1,747.01 crore earnings in the same period of the previous financial year, according to a company statement.

Its profit was, however, lower than Rs 8,243.55 crore earnings in the preceding quarter (July-September 2023).

The continuing freeze in fuel prices, which is now 21 months old, despite a fall in input raw material (crude oil) prices helped raise marketing margins.

BPCL earned an estimated USD 13.3 on turning every barrel of crude oil into fuel like petrol and diesel during October-December.

Pre-tax earnings from fuel marketing soared to Rs 4,372.93 crore in the third quarter from Rs 2,618.95 crore a year back but lower than the record Rs 11,283.29 crore in the July-September period.

Its revenue from operations was slightly lower at Rs 1.3 lakh crore.

In 2022, state-owned fuel retailers Indian Oil Corporation (IOC), BPCL and Hindustan Petroleum Corporation Ltd (HPCL) froze prices, despite a spike in global oil rates, following Russia's invasion of Ukraine. This was with a view to insulate consumers from price volatility.

The price freeze led to the three firms incurring losses in the first half of the 2022-23 fiscal (April 2022 to March 2023). When prices started to fall last year, they recouped the previous year's losses, and the same continues even now.

Profitability soared in the July-September quarter, but inventory losses in the subsequent three months tempered earnings.

BPCL's marketing margin in October-December is estimated at Rs 3.5 per litre.

The company turned 9.86 million tonnes of crude oil into fuel in the third quarter, up from 9.39 million tonnes a year back and 9.35 million tonnes in the preceding quarter.

Fuel sales were almost flat at 12.92 million tonnes in October-December when compared to year-on-year, but were higher than 12.19 million tonnes in the preceding quarter.

During the first nine months of the current fiscal, the company recorded its highest-ever net profit of Rs 22,069.27 crore as opposed to a loss of Rs 4,739.42 crore in April-December 2022.

Gross refining margins (GRM) for the April-December period was USD 14.72 per barrel against USD 20.08 a barrel in the corresponding comparative period.

EBITDA for the nine months of FY24 reached Rs 36,887.35 crore, an increase from Rs 1,253.93 crore in the first three-quarters of FY23. The EBITDA margin was 9.84% in the first nine months of FY24, compared to 0.31% in the corresponding period of FY23.

EBITDA for Q3 FY24 at Rs 6,906.37 crore was higher than Rs 4,685.82 crore in Q3 FY23.

BPCL expanded its retail network by adding 501 new fuel stations, bringing the total network strength to 21,532.

A total of 112 CNG stations were commissioned, raising the total to 1,711 CNG stations as of December 31, 2023.

BPCL chairman and managing director G Krishnakumar said the company "delivered another quarter of resilient performance with strong operating fundamentals amidst a challenging operating environment. Our focus remains on driving competitive volume growth and achieving operational excellence, whilst stepping up investment towards our long-term strategic priorities".