BPCL's Revenue Gain By 23.5% YoY, Board Recommends Rs. 6.00 Dividend: Stock Outlook

Bharat Petroleum Corporation Ltd (BPCL) has recently announced its financial report that shows its total revenue has increased by 23.5% YoY and 4.7% QoQ to Rs. 1,232.2 billion in 4QFY22. Its revenue has advanced to Rs. 4,325.69 billion against Rs. 3,042.75 billion in FY21. BPCL's other income in the same quarter grew by 2.3% on QoQ to Rs. 6.02 billion.

Profit After Tax (PAT) and EBITDA

However, the company's profits have fallen marginally. According to the report, on a full-year basis, the company witnessed a PAT of Rs. 116.8 billion in FY22 down from Rs. 173.19 billion in FY21. During the quarter BPCL registered a PAT of Rs. 28.03 billion as against Rs. 28.05 billion in the previous quarter. The slide in net profit, despite the surge in revenue, is being attributed to the firm's decision to hold the fuel prices despite the risk in input cost.

EBITDA for the reported quarter has decreased to 5.8% YoY and increased by 16.8% on QoQ to Rs. 59.54 billion. The operating margin for 4QFY22 stood at 4.8%.

Recommendation of Dividend

The Board has recently recommended a final dividend of Rs. 6/ Equity Share and BPCL's Face Value is Rs. 10/ equity share, which is subject to the approval of shareholders. This is in addition to the interim dividend of Rs. 10.00/ Equity Share, with a Face Value of Rs. 10/ equity share, paid for the year by the Corporation.

Share Price and Stock Recommendation

The share price of BPCL stood at Rs. 320.85, which has fallen by 1.08% today, on May 27, till 2.33 pm, from the last closing price. However, reputed firm JM Financial has recommended buying the stock with a target price (TP) of Rs. 400, in 1 year.

Significantly, the union government has called off said it has called off the process for inviting expression of interests (EOIs) for the strategic disinvestment (strategic privatization process) of BPCL, on May 26. The Department of Investment and Public Asset Management (DIPAM) said in a statement, that the majority of BPCL suitors "expressed their inability to continue." However, the government added, that it would re-initiate the process in "due course based on review of the situation".

Market sales

The market sales of the BPCL for the year ended March 31, 2022 was 42.51 MMT as compared to 38.74 MMT for the year ended March 31, 2021. The increase is mainly in MS-Retail (13.05%), HSD-Retail (6.64%), and ATF (31.91%). The Average Gross Refining Margin (GRM) of the Corporation for the year ended 31st March 2022 is $9.09 per barrel (Previous year: $ 4.06 per barrel).