Prabhudas Lilladher's research report on Bharat Petroleum Corporation
We change our FY23/24E estimates as we incorporate FY22 actuals. BPCL reported lower than expected Q4 results with standalone EBITDA of Rs42.4bn (+1%QoQ; PLe Rs 50.7bn) and PAT of Rs21.3bn (-13%QoQ; PLe Rs33.2bn), due to lower than expected marketing earnings as calculated marketing EBIDTA loss increased to Rs56.9bn in Q4 vis-à-vis gains of Rs31.4bn in Q3. For FY22, EBIDTA/PAT was at Rs161.9bn (-6%YoY) and Rs88.7bn (-30%YoY). We believe OMCs earnings will be hit by sharp jump in marketing losses, despite improvement in refining profitability.
However, softening diesel spreads from recent highs of $45/bbl to ~$30/bbl will reduce marketing losses as more refiners come back from maintenance shutdown. Maintain BUY.
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