Mumbai: State-run Bharat Petroleum Corp. Ltd (BPCL) Wednesday said net profit rose 11% in the June quarter, aided by higher product prices and inventory gains.
BPCL, India’s third largest oil refiner and marketer, posted a net profit of Rs.2,620.5 crore during the quarter, against Rs.2,360.6 crore a year ago.
Total income fell to Rs.57,015.75 crore, down 3%, against Rs.58,818.37 crore a year ago.
A Bloomberg poll of 22 brokers had estimated the company’s standalone net profit at Rs.2,178.1 crore and a poll of 16 brokers had estimated standalone net sales at Rs.51,284.6 crore.
“Income was down due to drop in product prices. However, sales volumes were up,” said P. Balasubramanian, director finance, BPCL, over phone. Sales registered an 8% increase against a drop of 1.10% a year ago.
Operating profit (Ebitda—earnings before interest, tax, depreciation and amortisation) was up by 3% year-on-year to Rs.3,919 crore.
Gross refining margins (GRMs) came in at $6.09 per barrel against $8.55 per barrel during the June 2015 quarter. GRM is the difference between the refined product and raw crude price.
Profit also got a boost from inventory gains of Rs.1,200 crore. Balasubrananian however, declined to specify the quantum of inventory gains.
Inventory gains are gains made on the crude oil stock kept with oil companies. Companies typically keep stocks for 30 days. They incur an inventory loss or gain when the price at which crude is purchased is higher or lower than the prevailing price.
Ahead of earnings, BPCL scrip closed at Rs.600, down 1.21% on the BSE while the benchmark Sensex closed at 28452.17, up 0.39%.
BPCL has a total refining capacity of 27.5 million tonnes per annum, spread across Mumbai, Kochi and Bina in Madhya Pradesh. Last month, it received approval from the Union cabinet to invest Rs.3,000 crore in its unit Bharat Oman Refineries Ltd (BORL), which operates a refinery at Bina in Madhya Pradesh. The company needs Rs.3,072 crore for its capacity expansion to 7.8 million tonnes and to produce fuel that meets the latest emission norms.