(Reuters) – India’s Bharat Petroleum Corp (BPCL) reported a slump in second-quarter profit on Friday, weighed down by lower marketing margins.
The state-owned company’s standalone net profit fell 71.8% to 23.97 billion rupees ($285.2 million) for the three months ended Sept. 30. Analysts had expected a profit of 35.06 billion rupees, as per data compiled by LSEG.
The country’s third-largest oil refiner by capacity said the average gross refining margin for April-September fell to $6.12 per barrel from $15.42 per barrel a year earlier.
The company has decided not to raise capital through a rights issue due to improved internal generation of funds and as the ministry of petroleum and natural gas has said it will not be allocating funds for capital support to oil marketing companies.
KEY CONTEXT
India, the third-largest oil importer and consumer globally, usually experiences a drop in fuel demand during the four-month monsoon season starting in June. This decline is largely due to severe flooding in various regions, which hampers mobility.
Additionally, heavy rains impact agricultural demand, as farmers rely on gasoil-powered generators for irrigation.
India’s fuel consumption dropped year-on-year in August and September, hitting a two-year low in the latter month.
Global crude oil prices dropped nearly 17% in the quarter ended September.
The Indian government cut the windfall tax on petroleum crude twice in July and August before scrapping it entirely on Sept. 15.
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 yield
s target** (%)
Bharat Petroleum 10.43 7.19 0.77 -24.62 Hold 21 0.96 6.53
Corporation
Hindustan Petroleum 9.24 7.50 -1.80 -16.79 Hold 15 1.04 5.19
Corp
Indian Oil 8.88 6.32 1.70 -26.38 Hold 20 0.88 7.83
Corporation
Reliance Industries 22.29 11.10 6.67 11.34 Buy 32 0.84 0.37
* 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
JULY-SEPTEMBER STOCK PERFORMANCE
— All data from LSEG
— $1 = 84.0500 Indian rupees
(Reporting by Anuran Sadhu in Bengaluru; Editing by Mrigank Dhaniwala)
