BackBPCL share price gains on Q4 results: Should you own this stock?
BPCL Q4FY23 Results: The company recorded a staggering 158.99% or 2.58 fold increase in standalone profit after tax (PAT) to ₹6,477.74 crore in Q4FY23.
PremiumBharat Petroleum Corporation Ltd (BPCL) share price gained 1.8% on Tuesday's trade following company's Q4FY23 results. BPCL shares closed at ₹361.50 apiece, up 0.33% on BSE on Monday.
The company recorded a staggering 158.99% or 2.58 fold increase in standalone profit after tax (PAT) to ₹6,477.74 crore in Q4FY23 as compared to ₹2,501.08 crore in Q4 of the previous fiscal on Monday.
Following the Q4 results, investors would be keeping an eye on the stock reaction today. In comparison to the quarter ended in December 2022, when PAT was ₹1,959.58 crore, the company recorded a significant increase of 230.57%, or 3.30 times, in the most recent quarter.
In Q4FY23, standalone revenue from operations was 1,33,413.81 crore, an increase of 8.13% from 1,23,382 crore in the same quarter of the previous year. For the fiscal year that ended in March, the board has also recommended a dividend of ₹4 per equity share. If approved at the AGM, the dividend would be paid within 30 days of that date.
Read all market stories here
Further, the the oil marketing company's average gross refining margin (GRM) of BPC stood at $20.24 per barrel in the year ended March 31, 2023, which was ahead of the street's estimates.
The company said that this is before factoring in the impact of Special Additional Excise Duty and Road & Infrastructure Cess, levied with effect from July 1, 2022.
Let's take a look at what the brokerage's say:
Motilal Oswal
In its analysis, the brokerage stated that the company's GRM for the fourth quarter of fiscal year 2023 was USD 20.6/bbl, exceeding its expectation of USD 17.0/bbl, while the indicated marketing margin was ₹2.9/lit, below its forecast of ₹4.5/lit.
The brokerage claims that the company's total EBITDA came in 8% under expectation but 47% over consensus. The extraordinary spending drove the reported PAT to be 11% below the brokerages' expectation but 56% above the consensus estimate.
"BPCL’s marketing performance can improve further in the upcoming quarter as OMCs are estimated to be generating gross margins of ₹9.1/ ₹11.6 on petrol/diesel in 1QFY24’td due to decline in crude oil prices. There is no update on the divestment roadmap for BPCL now. The stock is trading at 1.3x FY24E P/BV, and we value it on 1.2x FY25E P/BV to arrive at our target price of ₹360. Maintain Neutral," said the brokerage.
Emkay Global
According to the brokerage, the company's Q4FY23 SA EBITDA exceeded its prediction by 57% thanks to better-than-anticipated GRM of USD20.6/bbl and 6% lower operating expenses. Lower interest costs and bigger exchange gains emphasised APBT.
"BPCL ended FY23 in the black at ₹18.7 billion RPAT, with USD20.2/bbl GRM and LPG subsidy of ₹55.8 bn, while marketing margin came in at a negative about Rs2.3/kg. We raise FY24E/25E PAT by nearly 56%/13%, assuming recouping of FY23 under-recoveries. We slightly raise our target multiple to 5.6x FY25E EV/EBITDA and revise the target price by 13% to Rs395/share. While earnings outlook is steady, there are system-wide risks, given the company's new ₹500 billion capex plan and upcoming national elections. We retain 'hold'," said the brokerage.
BPCL Q4 results: OMC beats estimates, standalone PAT rises 159%; key highlights of earnings
Milestone Alert!Livemint tops charts as the fastest growing news website in the world 🌏 Click here to know more.
