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1QFY12 PAT was substantially below our subsidy adjusted estimates primarily due to lower than
expected refining profits. The company bore net retail under recoveries of 32.6% during the
quarter after accounting for GOI contribution
BPCL reported a loss of Rs21.9bn at EBITDA level in 1QFY12 compared to our subsidy
adjusted loss estimate of Rs12.9bn. Below par refinery performance was the major drag on
results even though it was partly offset by higher than expected product inventory gains.
The company reported refining profits of Rs5.3bn (-22.6% yoy, -60% qoq) significantly below
our estimate of Rs14.6bn. Both throughput and refining margins were below our expectations.
Refining throughput of 5.2mt (-6.6% yoy, -6.8% qoq) was 7% below our estimates mainly
because of lower throughput at Kochi refinery. Kochi processed 1.84mt of crude (-20.3% yoy,
-17% qoq) as a part of the quarter was lost due to emergency shutdowns apart from regular
shutdowns. We await clarity from the management on this issue given the earlier guidance for
Kochi throughput was for 9.5mt in FY12 (up 8.4% yoy).
1QFY12 GRMs came in at $3.02/bbl (US$6.93/bbl in 4QFY11) vs our estimate of US$7.8/bbl.
We note that the reported GRMs include crude inventory losses (though not disclosed
separately), which can significantly dampen the true refining margins. On June 25 2011,
government of India (GOI) removed the 5% customs duty on crude while Brent was down
4.8% qoq in 1QFY12. To put into perspective, IOC reported 1QFY12 GRMs of US$4.7/bbl
after adjusting for crude inventory loss of US$2.35/bbl.
Product inventory gains for BPCL during the quarter were Rs12bn compared to our estimate
of Rs800mn and Rs2.9bn in the immediately preceding quarter. OMCs continue to show
divergence in quarterly trends while reporting product inventory gains.
During the quarter, BPCL has accounted for Rs35bn as GOI contribution towards gross retail
under recoveries which was disclosed some days back. The net under recoveries for BPCL in
1QFY12 were Rs33.6bn or 32.6% share in gross under recoveries.
The company reported net loss of Rs25.6bn in 1QFY12 vs our subsidy adjusted estimate of
Rs16.6bn reflecting the underperformance at EBITDA level.
India Equity Research Reports, IPO and Stock News
Visit http://indiaer.blogspot.com/ for complete details �� ��
1QFY12 PAT was substantially below our subsidy adjusted estimates primarily due to lower than
expected refining profits. The company bore net retail under recoveries of 32.6% during the
quarter after accounting for GOI contribution
BPCL reported a loss of Rs21.9bn at EBITDA level in 1QFY12 compared to our subsidy
adjusted loss estimate of Rs12.9bn. Below par refinery performance was the major drag on
results even though it was partly offset by higher than expected product inventory gains.
The company reported refining profits of Rs5.3bn (-22.6% yoy, -60% qoq) significantly below
our estimate of Rs14.6bn. Both throughput and refining margins were below our expectations.
Refining throughput of 5.2mt (-6.6% yoy, -6.8% qoq) was 7% below our estimates mainly
because of lower throughput at Kochi refinery. Kochi processed 1.84mt of crude (-20.3% yoy,
-17% qoq) as a part of the quarter was lost due to emergency shutdowns apart from regular
shutdowns. We await clarity from the management on this issue given the earlier guidance for
Kochi throughput was for 9.5mt in FY12 (up 8.4% yoy).
1QFY12 GRMs came in at $3.02/bbl (US$6.93/bbl in 4QFY11) vs our estimate of US$7.8/bbl.
We note that the reported GRMs include crude inventory losses (though not disclosed
separately), which can significantly dampen the true refining margins. On June 25 2011,
government of India (GOI) removed the 5% customs duty on crude while Brent was down
4.8% qoq in 1QFY12. To put into perspective, IOC reported 1QFY12 GRMs of US$4.7/bbl
after adjusting for crude inventory loss of US$2.35/bbl.
Product inventory gains for BPCL during the quarter were Rs12bn compared to our estimate
of Rs800mn and Rs2.9bn in the immediately preceding quarter. OMCs continue to show
divergence in quarterly trends while reporting product inventory gains.
During the quarter, BPCL has accounted for Rs35bn as GOI contribution towards gross retail
under recoveries which was disclosed some days back. The net under recoveries for BPCL in
1QFY12 were Rs33.6bn or 32.6% share in gross under recoveries.
The company reported net loss of Rs25.6bn in 1QFY12 vs our subsidy adjusted estimate of
Rs16.6bn reflecting the underperformance at EBITDA level.
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