Bharat Petroleum Corporation is expected to report a 42 percent year-on-year decline in net profit to Rs 3,114.8 crore for the quarter ended March, according to a Moneycontrol poll.
However, the net sales of the company are expected to surge 57 percent on a year-on-year basis to Rs 1.2 lakh crore in the reporting quarter aided by strong demand environment.
The reopening of the economy during the March quarter, partially hindered by the third wave of the pandemic, saw marketing volumes surge on a sequential and on-year basis.
That said, BPCL was unable to reap the benefits of a strong demand environment as it was unable to raise prices of retail fuel for majority of the quarter even as global crude oil prices simmered.
During the quarter, global crude oil prices rallied more than 30 percent aided by a strong demand environment in the West and sanctions imposed on Russian oil exports following the country’s invasion of Ukraine in late February.
The high oil marketing business losses will reflect in the weak operating performance of the company as operating profit is likely to fall 12 percent on a year-on-year basis to Rs 5,107 crore in the March quarter.
The decline in operating profits is despite Singapore Gross Refining Margins soaring during the quarter due to tight refining supplies and strong demand environment. Kotak Institutional Equities expects reported refining margins of the company to rise to $14.5 per barrel from $4.7 per barrel a year ago.
Brokerage firm Motilal Oswal Financial Services is even more bullish on refining margins as it expects them to come in at $19.8 per barrel. However, gross marketing margins are likely to be at negative Rs 1 per litre leading to sharp underrecoveries for the state-owned refiner.
At 11:56 am, shares of Bharat Petroleum were down 0.7 percent at Rs 327.7 on the National Stock Exchange. Disclaimer: The views and investment tips expressed by investment experts on Moneycontrol.com are their own and not those of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.
Discover the latest Business News, Sensex, and Nifty updates. Obtain Personal Finance insights, tax queries, and expert opinions on Moneycontrol or download the Moneycontrol App to stay updated!
