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These 2 govt-owned oil companies will turn ex-dividend this week. Details here

Both stocks will be in focus due to ex-dividend. Also, ONGC's quarterly earnings will further sway the stock's sentiments. (Ashish Raje)Premium
Both stocks will be in focus due to ex-dividend. Also, ONGC's quarterly earnings will further sway the stock's sentiments. (Ashish Raje)

  • ONGC is planning to pay a final dividend of 65% to its shareholders, while BPCL will make a payment of 60% dividend. These final dividends are for the financial year FY22. The ex-dividend date is the day that sets the list of eligible shareholders for the dividend benefit.

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Two government-owned oil companies namely BPCL and ONGC are set to turn ex-dividend ahead of the record date on stock exchanges later this week. Both stocks will be in focus due to ex-dividend. Also, ONGC's quarterly earnings will further sway the stock's sentiments. ONGC is planning to pay a final dividend of 65% to its shareholders, while BPCL will make a payment of 60% dividend. These final dividends are for the financial year FY22. The ex-dividend date is the day that sets the list of eligible shareholders for the dividend benefit.

Generally, when a company earns profit they share a certain portion of the surplus with the shareholders. The majority of the time, big companies announce dividends. Typically, an investor should hold the stocks of a company before the ex-dividend to be eligible for the benefit.

ONGC dividend:

India's one of the largest oil and gas explorers and producers, ONGC has announced a final dividend of 3.25 per share (i.e.@ 65%) for the financial year 2021-22. It has fixed a record date of August 19 for determining the eligible shareholders to receive the final dividend.

While the ONGC shares on stock exchanges will turn ex-dividend on August 18.

This dividend, if approved at the AGM, will be paid within the stipulated period of 30 days of declaration. The company is scheduled to hold its 29th annual general meeting (AGM) on August 29.

ONGC announced its June 2022 quarter results on Friday last week. In Q1 of FY23, the company registered a whopping 250.8% growth in consolidated net profit to 15,206 crore against 4,335 crore in the same quarter last year. Gross revenue climbed by 83.8% to 42,321 crore versus 23,022 crore in Q1FY23.

During the quarter, ONGC's crude oil production was at 5.494 MMT versus 5.394 MMT in Q1FY22 - rising by a marginal 1.9%. Total gas production surged by 1.4% to 5.383 BCM in Q1FY23 against 5.309 BCM in Q1 of the previous fiscal.

Last week, on Friday, ONGC shares ended at 139.25 apiece up by 4.94% on BSE. The company's market cap is around 1,75,180.39 crore.

BPCL dividend:

The oil marketing company has decided on a final dividend of 6 per equity share at a face value of 10 each (@60%) for the financial year FY22. The final dividend is in addition to the first interim dividend of 5 per equity share at a face value of 10 each and the second interim dividend of 5 per share for the fiscal.

The company has fixed August 23 as the record date to determine the eligible shareholders for the final dividend. While the company's shares will turn ex-dividend on August 19.

BPCL plans to pay the final dividend within 30 days from the date of its declaration at the AGM. The company is scheduled to hold its annual general meeting (AGM) on August 29.

In Q1FY23, BPCL posted a consolidated net loss of 6,147.94 crore compared to 3,214.16 crore in the same quarter last year. Its revenue from operations, however, climbed to 1,38,424.50 crore in Q1 of this fiscal against 89,714.12 crore in Q1FY22.

On BSE, BPCL shares closed at 333.90 apiece up by 1.72% on Friday last week. The company has a market capitalisation of 72,431.35 crore.

Analysts have mixed views on BPCL shares going forward.

Avishek Datta analyst at Prabhudas Lilladher post-BPCL's Q1 results said, "We downgrade BPCL to ‘HOLD’ from ‘BUY’ with a revised PT of Rs331 (Rs416 earlier) based on 8x PER FY24E and add value of investments along with E&P. The company’s Q1FY23 standalone financials include results of a wholly owned subsidiary, Bharat Oman (BORL), hence is not comparable. We cut FY23/24E estimates by 13-39% as we lower marketing margins, while we increase BORL’s GRMs assumption. Marketing margins will likely be under pressure, as low product inventory and lower exports from China and Russia may keep product spreads high. Q1 EBIDTA/PAT was at -Rs59.0bn (Q4: Rs42.4bn; PLe –Rs52.7bn) and –Rs62bn (Q4: Rs21.3bn; PLe –Rs65bn). Core EBIDTA adjusted for inventory and forex loss was at –Rs45.7bn vs Rs44.4bn in Q4."

On the other hand, Dayanand Mittal analyst at JM Financial said, "OMCs’ auto-fuel under-recovery has declined to INR 3/ltr at present from a high INR 15-16/ltr in 1QFY23 due to fall in crude price and moderation in product cracks. At CMP, BPCL is trading at 1.2x FY24 P/B (vs. 10-year avg of 1.5x) Hence, we maintain BUY on BPCL (unchanged TP of INR 385); further, there exists significant value creation optionality from synergy and efficiency improvement arising out of privatisation. Key risks: a) sustained high marketing losses; b) decline in GRM below historical levels."

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