Moody's Investors Service has affirmed the 'ba1' baseline credit assessment (BCA) rating and the 'Baa3' issuer and senior unsecured ratings of Bharat Petroleum Corporation (BPCL).
The credit rating agency has also affirmed the '(P)Baa3' senior unsecured rating on the medium-term note (MTN) program of BPCL and the '(P)Baa3' backed senior unsecured rating on the medium-term note (MTN) program of BPRL International Singapore (BPRL). It has further affirmed the 'Baa3' backed senior unsecured rating of BPRL.
BPRL is a wholly owned subsidiary of BPCL and its bonds are guaranteed by BPCL.
Moody's has also changed the outlook on all ratings to stable from negative.
The change in BPCL's outlook to stable follows the Indian government's recent announcement to call off its proposed stake sale in the company.
"The government's decision to cancel the divestment eliminates the risk of a potential deterioration in BPCL's credit quality. If the divestment had occurred, we would have reassessed the sovereign support currently incorporated in BPCL's rating that results in a one-notch uplift," says Sweta Patodia, a Moody's Assistance Vice President and Analyst.
"The affirmation of BPCL's Baa3 issuer rating and ba1 BCA reflects its position as the second-largest state-owned refining and marketing company in India and our view that the company's credit metrics will recover over the next 12-18 months such that they will be more appropriately positioned for its current rating," adds Patodia, who is also Moody's Lead Analyst for BPCL.
Bharat Petroleum Corporationis a downstream company, specializing in oil refining, marketing, distribution, and the retailing of petroleum products. As of 31 March 2022, the Indian government had a 52.98% stake in the company.
The PSU company reported 82.2% fall in standalone net profit to Rs 2,130.53 crore in Q4 FY22 as against Rs 11,940.13 crore in Q4 FY21. Net sales came at Rs 108,773.57 crore for the quarter ended 31 March 2022 as against Rs 76,890.50 crore during the same period in the previous year, registering a growth of 41.5%.
The scrip rose 0.64% to currently trade at Rs 328.50 on the BSE.
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