BPCL board recommends dividends to shareholders


by 5paisa Research Team Last Updated: Jun 02, 2022, 10:56 PM IST

For the March 2022 quarter, BPCL announced its results along with the final dividend for the fiscal year FY22. Before we get into the dividend part, let us first look at the financial numbers for Q4FY22. BPCL reported an 82% fall in net profits for the fourth quarter at Rs.2,131 crore. For the fourth quarter of the previous year, Q4FY21, the net profit had stood at a rather imposing Rs11,940 crore.

Here is a quick look at what led the profits lower. Remember, like most of the refining companies, BPCL also reported better than expected gross refining margins (GRM) due to elevated crude prices. That means, BPCL not only gained from higher refining margins but also from inventory translation gains.

However, the pressure came from the marketing margins. Prices of petrol and diesel were not hiked between November 2021 and March 2022 despite a 70% rally in crude. This badly dented profits of BPCL due to under-recoveries.

However, that has not deterred BPCL from paying out a liberal dividend to its shareholders. Along with the announcement of its fourth quarter results, BPCL also announced a final dividend of Rs6 per share. This liberal pay-out of dividend is despite the sharp fall in the profits and marks the third dividend declared for the fiscal year FY22. Prior to this final dividend, BPCL has already declared and paid 2 interim dividends to shareholders.
 

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The payment of the dividend to shareholders is subject to the final approval of shareholders  at the AGM. Prior to the final dividend, BPCL had paid two interim dividends of Rs5 each, taking the total dividend pay-out to shareholders to the tune of Rs16 per share for the full year FY22. Of course, the government of India will be the biggest beneficiary of this generous dividend pay-out, since it holds 52.98% stake in BPCL as of date.

Here is a quick look at how the dividend yield for BPCL for FY22 looks like based on the full year dividend.
 

Particulars

Dividend per share

Dividend in (%)

First Interim Dividend

Rs.5 per share

50%

Second Interim Dividend

Rs.5 per share

50%

Final dividend

Rs.6 per share

60%

Total dividend for FY22

Rs.16 per share

160%

Stock Price of BPCL

Rs.322.70

Closing Price on 27th May

Dividend Yield (%)

4.96%

 

 

Data Source: NSE

The final dividend will be taken up for approval of shareholders at the Annual General Meeting(AGM). The final dividend will be paid by the company within a period of 30 days from the date of declaration at the AGM. 

For FY22, BPCL saw its GRM double to $9.09 per barrel. However, there has been another interesting development on BPCL. The government has put off plans to divest its 52.98% stake in the oil refiner and marketer and has withdrawn the expression of interest (EOI) issued. For now, BPCL stays in the government fold and that promises a continuation of liberal dividend pay-outs by the company. The government may evaluate a later date for the divestment, post a rethink in the valuation metrics of BPCL.

About the Author

Our research team is composed of some highly qualified research professionals, their expertise range across sectors.

Disclaimer

Investment/Trading is subject to market risk, past performance doesn’t guarantee future performance. The risk of trading/investment loss in securities markets can be substantial. Also, the above report is compiled from data available on public platforms.
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