BPCL gains 4%, hits 52-week high on strong Q4 results, Rs 58/share dividend

Shares of Bharat Petroleum Corporation Limited (BPCL) rose 4 per cent and hit a 52-week high of Rs 488 on the BSE in intra-day trade on Thursday after the state-owned oil marketing company's board recommended a final dividend of Rs 58 per equity share, including one-time special dividend of Rs 35 per equity share of Rs 10 each, for the financial year ended March 31, 2021, subject to the approval of the shareholders.

In the past one month, the stock has outperformed the market by gaining 15 per cent, as compared to 5.5 per cent rise in the S&P BSE Sensex. At 09:25 am, BPCL was up 1.6 per cent at Rs 478.75, against 0.12 per cent decline in the benchmark index.

Privatisation-bound fuel retailer BPCL, on Wednesday, reported a return to net profit in March quarter (Q4FY21) at Rs 11,940 crore, which includes one-time gain of Rs 6,993 crore, as against net loss of Rs 1,361 crore in the year-ago period. Profit before exceptional item is at Rs 5,244.5 crore.

The turnaround witnessed by the company in its profitability is largely on account of inventory gains, and also on account of a V-shape recovery seen by the company in the second half of financial year resulting in robust growth in fuel sales.

BPCL's revenues increased 14.1 per cent quarter on quarter (QoQ) to Rs 98,756 crore while marketing sales were at 11.2 MMT, 4.1 per cent QoQ. On the refining front, crude throughput was up 15.9 per cent QoQ to 8.4 MMT while reported gross refining margins (GRMs) at US$6.6/bbl were lifted by inventory gain of US$4.2/bbl.

“Fuel demand reached near normal level in Q4FY21. However, the second wave of Covid-19 and subsequent restrictions have affected fuel demand in the current quarter (Q1FY22-TD). Improvement in GRMs and further recovery in fuel demand will be important for BPCL's profitability in the near term. The progress on divestment and response by potential bidders will be the key monitorable for the stock price performance,” ICICI Securities said in a note.