Bharat Petroleum (BPCL) Share Q3 Results

For the Dec-21 quarter, Bharat Petroleum reported 44.3% higher sales revenues at Rs.95,326 crore, net of excise duty. During December 2021 quarter, BPCL saw overall product sales of 11.15 MMT which included export volumes of 0.55 MMT. Domestic and export sales were marginally higher on a YoY basis. 

Refinery throughput for BPCL stood at 7.95 MMT in Q3 against 7.24 MMT in Dec-20 quarter. The downstream petroleum marketing and refining vertical saw growth of 35.05% YoY while the much smaller exploration and hydrocarbon business of BPCL saw doubling of top line. On a sequential basis, the revenues were up by 24.71% compared to Sep-21 quarter.

Let us now turn to the operating performance of BPCL. For the Dec-21 quarter, operating profits were down YoY by -13.43% at Rs.3,792 crore. That was largely on account of sharply higher input costs. During the quarter, EBIT of downstream oil business fell by -5.73%, despite sharply higher sales. EBIT of exploration and hydrocarbons dipped into a loss.

The average gross refining margins (GRM) in the first 9 months to Dec-21 of FY22 stood at $6.78/bbl in contrast to $2.90/bbl in the first 9 months of fiscal year FY21. Operating margins tapered from 6.63% in Dec-20 quarter to 3.98% in the Dec-21 quarter. The OPM was also lower on a sequential basis also, but more on account of the higher top line effect.

The picture was more encouraging on the bottom line front. Net Profits for Dec-21 quarter were sharply higher by 79.21% at Rs.2,805 crore, despite weak operating performance. The growth in the net profits of BPCL can be attributed to two factors; which were outside of the operational ambit. Firstly, BPCL reported profits from associates of Rs451cr against a loss from associates of Rs.727 Cr in the Dec-20 quarter. 

The other key reason was that the tax outgo was much lower in this quarter. For instance, the tax outgo in Dec-21 quarter was 40% lower on a YoY basis; which boosted the net profits. PAT margins improved from 2.37% in the Dec-20 quarter to 2.94% in Dec-21 quarter. The PAT margins were lower on a sequential basis, but the boost to the bottom line came from purely non-operating factors in this quarter.