BPCL Q1 Results Review - Inline Despite Miss On Gross Refining Margin: Nirmal Bang

Nirmal Bang Report

Bharat Petroleum Corporation Ltd. Q1 FY25 standalone profit after tax missed our estimate a tad and the street’s by 3%. This was driven by the 12% miss on Ebitda due to the 16.4% miss in gross refining margin reported at $ 7.86/barrel of oil, which offset the 16.5% beat in marketing Ebitda reported at Rs 20.2 billion (as per our estimate). Mumbai/Bina/Kochi GRMs saw a miss of 12.4%/13.3%/7.8%.

Bharat Petroleum Corporation also reported marketing inventory gain of Rs 4.07 billion versus a loss of Rs 10.7 billion in Q1 FY24. The reported Q1 FY25 Marketing Ebitda is after reducing the under recovery of Rs 20.15 billion in LPG buffer account (LPG UR).

The miss on profit after tax was tempered by - 3.4% beat in other income at Rs 5.09 billion, and lower interest/depreciation expense - 28.8%/9.6% below our estimate.

We have cut the estimates for FY25E a tad due to a cut in /retail margin; but raised FY26E by 5.7% based on marginal increase in GRM. We have also rolled over to FY26E.

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