Bharat Petroleum Q1 Preview: Profit May Decline On Weak Refining Margin
The company's net profit may fall 37% sequentially to Rs 2,620.84 crore in the three months through June, according to the consensus of analysts' estimates tracked by Bloomberg.
Bharat Petroleum Corp.'s quarterly profit is expected to decline on the back of lower refining margins.
Net profit of the state-run oil refiner and marketer may fall 37% sequentially to Rs 2,620.84 crore in the three months through June, according to the consensus of analysts' estimates tracked by Bloomberg.
While the company's revenue may rise 0.36% over a quarter ago, margins are expected to contract by 300 basis points, according to Bloomberg data.
Bharat Petroleum Corp. Earnings Estimates (Standalone, QoQ)
Revenue may rise 0.36% to Rs 1.16 lakh crore.
Ebitda may fall 37.5% to Rs 5,750.97 crore.
Margin may contract to 4.9% vs 7.9%.
Net profit may drop 37.95% to Rs 2,620.84 crore.
Brokerage Views
Bharat Petroleum could report a weak set of results, reflecting the impact of the sharp sequential decline in refining margins, and marketing margins, due to the recent Rs 2 per litre price cut for petrol and diesel, Nomura said.
The brokerage expects the company's operating profit to decline 42% quarter-on-quarter to Rs 53,600 crore.
The weakness in profits will be on a sequential as well as annual basis, according to Nirmal Bang Institutional Equities. The brokerage expects its quarterly net profit to fall 71.2% year-on-year.
Gross Margin
Refining margins of Indian oil marketers in the ongoing fiscal is likely to moderate from the higher-than-usual levels seen during FY24, according to Fitch Ratings. It attributed the moderation to weakening demand for refined products, especially in China, lower fuel exports from Asia and shrinking price gap between different types of crude oil.
The sharp decline can be attributed to the decline in spreads for transportation fuels like diesel, gasoline and jet fuel/kerosene, Nomura said. Margins could also be modestly impacted by inventory losses due to decline in crude prices during the quarter. Nomura expects Bharat Petroleum to report refining margins of $6.3 per barrel of oil, against the $12.5 per barrel margin in the fourth quarter of FY24.
Nirmal Bang Institutional Equities also expects year-on-year decline in gross refining and marketing margins, which will dent earnings for the oil marketer. The brokerage expects Ebitda margins to be at 5.8%, compared to 7.9% a year ago.
