(Reuters) – India’s Bharat Petroleum Corp Ltd (BPCL) reported a lower-than-expected third-quarter profit on Wednesday, due to lower marketing margins and losses in its liquefied petroleum gas (LPG) segment.
The state-owned company’s standalone net profit rose about 37% to 46.49 billion rupees ($538.6 million) in the three months ended Dec. 31. Analysts had expected a profit of 48.52 billion rupees, as per data compiled by LSEG.
The company, India’s third-largest oil refiner by capacity, said its average gross refining margin for April-December fell to $5.95 per barrel from $14.72 per barrel a year earlier. BPCL does not give quarterly margin numbers.
Revenue from operations fell about 2% to 1.28 trillion rupees, after a 72.29 billion rupees hit to account for the difference between LPG cylinders’ market-determined price and their subsidised selling price.
KEY CONTEXT
India, the world’s No. 3 oil importer and consumer, saw increased fuel consumption last quarter due to holidays-related travel and a pickup in agricultural activity after a healthy monsoon.
Fuel consumption rose 2.9% in October, before surging 9.3% in November and increasing another 2.1% in December.
However, since March, the three Indian refiners – Indian Oil, HPCL and BPCL – have been hurt by losses in the cooking gas or LPG segment as the government kept domestic LPG prices unchanged even as raw material costs spiked.
Global crude oil prices rose 4% in the quarter.
PEER COMPARISON
Valuation (next 12 Estimates (next 12 Analysts’ sentiment
months) months)
RIC PE EV/EBITDA Revenue Profit Mean No. of Stock to Div
growth (%) growth rating analyst price target yield
(%) * s ** (%)
BPCL 6.52 7.19 1.36 -11.89 Hold 22 0.80 7.68
HPCL 7.83 7.16 -4.35 9.00 Hold 15 0.90 5.85
IOC 8.23 6.69 1.96 2.32 Hold 21 0.80 9.37
Reliance Industries 20.80 10.77 7.11 14.85 Buy 32 0.84 0.38
* The mean of analyst ratings standardised to a scale of Strong Buy, Buy, Hold, Sell, and Strong Sell ** The ratio of the stock’s last close to analysts’ mean price target; a ratio above 1 means the stock is trading above the PT
OCTOBER-DECEMBER STOCK PERFORMANCE
— All data from LSEG
— $1 = 86.3120 rupees
(Reporting by Anuran Sadhu in Bengaluru; Editing by Savio D’Souza)
