Bharat Petroleum Corporation Limited PAT up 2.6x YoY led by operating efficiency

Company Overview:

Bharat Petroleum Corporation Limited (BPCL) is a prominent public sector company operating in the refining of crude oil and marketing of petroleum products. The company operates in two main segments: downstream petroleum, encompassing refining, storage, distribution, and marketing, and exploration and production of hydrocarbons. BPCL holds a significant position in the Indian petroleum industry with a refining capacity that includes three refineries in Mumbai, Kochi, and Bina, with respective capacities of 12 MMTPA, 15.5 MMTPA, and 7.8 MMT. Notably, BPCL ranks as the third-largest refining capacity holder in India, contributing to 13.90% of the nation’s refining capacity.

 Market Presence and Distribution:

BPCL commands a substantial presence in the Indian market, operating through 21,142 retail outlets and 83 retail depots across the country. The company holds a notable market share of 27.2% in the retail segment, offering a diverse range of petroleum products. In the LPG business, BPCL’s market share is 27.3%, boasting a robust network of 6,245 distributors and 53 LPG bottling plants. The company’s strategic footprint extends to the aviation sector, with 61 aviation service stations across Indian airports and a domestic market share of 23.4% in ATF (Aviation Turbine Fuel).

Infrastructure and Global Operations:

BPCL’s infrastructure includes a comprehensive pipeline network spanning 3,536 kilometers, designed to accommodate a capacity of 29 MMTPA. The company’s subsidiary, Bharat Petro Resources Ltd, holds Participating Interest (PI) in eighteen blocks, with a balanced distribution between Indian and overseas operations. Additionally, BPCL has equity stakes in two Russian entities, which are license holders for four productive blocks in Russia.

Q1FY24 Results Updates: Standalone

In the first quarter of the fiscal year 2023-24, BPCL’s financial performance displayed noteworthy improvements. The company’s revenue experienced a decline of 6.67% YoY (-4.35% QoQ) to INR 1,12,978 Crore. Notably, gross profit surged significantly, growing by 6.5x YoY (+23.5%) to INR 22,091 Crore. This remarkable growth was attributed to effective cost of goods sold (COGS) management, leading to a 23% YoY decline in COGS. EBITDA also demonstrated substantial growth, increasing 3x YoY to INR 15,810 Crore, primarily due to a 33% reduction in other expenses. Consequently, EBITDA margins improved by approximately 9% to 14% in Q1FY24. EBIT witnessed a growth of 2.8x, reaching INR 14,200 Crore, supported by controlled depreciation costs, resulting in EBIT margins expanding by 7% YoY to 13% in the same period. Notably, PAT exhibited remarkable growth of 2.6x YoY to INR 10,551 Crore, attributed to robust operational efficiency and meticulous cost management, leading to a 400 basis points expansion in PAT margins to 9.3% in Q1FY24. The quarter’s earnings per share (EPS) stood at INR 48.62, a noteworthy improvement compared to the EPS of -28.86 in Q1FY23

conclusion:

Bharat Petroleum Corporation Limited’s operations span critical segments of the Indian petroleum industry. Despite facing challenges in some financial parameters in FY23, the company exhibited substantial growth and improved operational efficiency in Q1FY24. The strategic positioning, extensive distribution network, and focus on cost management position BPCL as a significant player in the Indian petroleum sector.