Sign up for Equitymaster's free daily newsletter, The 5 Minute WrapUp and get access to our latest Multibagger guide (2017 Edition) on picking money-making stocks.

This is an entirely free service. No payments are to be made.

Download Now Subscribe to our free daily e-letter, The 5 Minute WrapUp and get this complimentary report.
We hate spam as much as you do. Check out our Privacy Policy and Terms Of Use.
BPCL: Depreciation costs buoy PAT - Views on News from Equitymaster
  • E-MAIL
  • A  A  A
  • Jul 31, 2001

    BPCL: Depreciation costs buoy PAT

    Bharat Petroleum Corporation Ltd. (BPCL) seems to have succumbed to the slowdown. The turnover, YoY, has dropped in 1QFY02. Growth in the refining sector has slowed down to 6.4% in 1QFY02 from 34.5% in 1QFY01 as per Central Statistical Organisation (CSO) estimates.

    (Rs m) 1QFY01 1QFY02 Change
    Sales 108,097 101,463 -6.1%
    Other Income 340 356 4.7%
    Expenditure 103,423 96,956 -6.3%
    Operating Profit (EBDIT) 4,674 4,507 -3.6%
    Operating Profit Margin (%) 4.3% 4.4%  
    Interest 492 721 46.5%
    Depreciation 2,245 712 -68.3%
    Profit before Tax 2,277 3,430 50.6%
    Tax 401 1,201 199.5%
    Profit after Tax/(Loss) 1,876 2,229 18.8%
    Net profit margin (%) 1.7% 2.2%  
    No. of Shares (eoy) 150 300  
    Diluted Earnings per share* 25.0 29.7  
    P/E Ratio   6.3  

    Sales have declined despite a rise in crude throughput to 2.2 MMT (m metric tonnes) from 1.7 MMT, a growth of 29.8%. Purchase for resale volumes have also increased to 5 MMT from 4.8 MMT, a growth of 3.8%. Sales increase has been seen in petrol, ATF (aviation turbine fuel), naphtha and LPG. However, sales of key middle distillates (diesel & kerosene) could have come under pressure, especially with a slowdown in the industry. Middle distillates contribute an estimated 62% to sales. Reliance Petroleum (RPL) has registered a de-growth of 4.3% in middle distillate sales for 1QFY02. The company has also clocked a drop of 16.1% in lubricants sales to 15.5 TMT (thousand metric tonnes).

    Along with a drop in sales, operating expenses have also declined, which has protected operating margins. This has also prevented a further slide in operating profits. The OPM for 1QFY02 has increased marginally by 12 basis points. The drop in operating cost is due to a 8.3% drop in purchase of products for re-sale, which constitute an estimated 65% of sales. The higher volume in purchase of products for resale but lower costs could indicate some softening in international petroleum product prices. YoY inventory has increased by Rs 30 bn, which has supported operating margins.

    The increase in interest expense could be due to the blockage of funds in the oil pool account. Consequently, the company had to resort to short-term borrowings for meeting working capital requirement. Depreciation costs have declined substantially, which has buoyed BPCL's pre-tax profits. The drop in depreciation is due to lower procurement of LPG cylinders. The company continues to charge 100% depreciation on LPG cylinders.

    Tax for quarter ended June '01 includes deferred tax of Rs 432 m. Deferred tax liability for previous years will be adjusted against reserves of the company. In 1QFY02, excluding deferred tax, effective tax rate of the company has increased by 480 basis points over the corresponding period of the previous year. Effective tax rate has increased to 22.4%.

    At Rs 186 the company trades on a multiple of 6.3x 1QFY02 annualised earnings.



    Equitymaster requests your view! Post a comment on "BPCL: Depreciation costs buoy PAT". Click here!


    More Views on News

    BPCL: Inventory gains boost profits (Quarterly Results Update - Detailed)

    Sep 10, 2016

    BPCL has reported 3.1% decline in the topline and 11% growth in the bottomline for the year ended June 2016.

    GAIL: A Good Show (Quarterly Results Update - Detailed)

    Mar 27, 2017

    GAIL (India) Ltd has announced results for the quarter ended December 2016. reported 9.4% year on year (YoY) decline in sales, while bottom-line grew 45.4% YoY.

    ONGC: Higher Realisations on Crude Support Performance (Quarterly Results Update - Detailed)

    Mar 17, 2017

    ONGC has announced results for the quarter ended December 2016. The company has reported 9.2 % year on year (YoY) growth in sales, while bottom-line grew 197% YoY.

    BPCL: Higher other income boosts profits (Quarterly Results Update - Detailed)

    Jan 20, 2016

    BPCL has reported 25.1 % YoY decline in the topline while bottomline for the quarter grew 119% YoY.

    BPCL: A strong quarter (Quarterly Results Update - Detailed)

    Sep 10, 2015

    BPCL has reported 22.2% YoY decline in the topline while bottomline grew by 95.4% YoY in the quarter ended June 2015.

    More Views on News

    Most Popular

    Demonetisation Barely Made Any Difference to Tax Collections(Vivek Kaul's Diary)

    Aug 7, 2017

    The data tells us quite a different story from the one the government is trying to project.

    Proxy Plays: A Smart Way to Bet on 'Off Limits' Companies(The 5 Minute Wrapup)

    Aug 4, 2017

    The small-cap space is full of small players that are clear proxies to great growth stories and Indian megatrends.

    Should You Invest In Bharat-22 ETF? Know Here...(Outside View)

    Aug 8, 2017

    Bharat-22 is one of the most diverse ETFs offered so far by the Government. Know here if you should invest...

    Signs of Life in the India VIX(Daily Profit Hunter)

    Aug 12, 2017

    The India VIX is up 36% in the last week. Fear has gone up but is still low by historical standards.

    7 Financial Gifts For Your Sister This Raksha Bandhan(Outside View)

    Aug 7, 2017

    Raksha Bandhan signifies the brother-sister bond. Here are 7 thoughtful financial gifts for sisters...

    Copyright © Equitymaster Agora Research Private Limited. All rights reserved.
    Any act of copying, reproducing or distributing this newsletter whether wholly or in part, for any purpose without the permission of Equitymaster is strictly prohibited and shall be deemed to be copyright infringement.

    LEGAL DISCLAIMER: Equitymaster Agora Research Private Limited (hereinafter referred as 'Equitymaster') is an independent equity research Company. Equitymaster is not an Investment Adviser. Information herein should be regarded as a resource only and should be used at one's own risk. This is not an offer to sell or solicitation to buy any securities and Equitymaster will not be liable for any losses incurred or investment(s) made or decisions taken/or not taken based on the information provided herein. Information contained herein does not constitute investment advice or a personal recommendation or take into account the particular investment objectives, financial situations, or needs of individual subscribers. Before acting on any recommendation, subscribers should consider whether it is suitable for their particular circumstances and, if necessary, seek an independent professional advice. This is not directed for access or use by anyone in a country, especially, USA or Canada, where such use or access is unlawful or which may subject Equitymaster or its affiliates to any registration or licensing requirement. All content and information is provided on an 'As Is' basis by Equitymaster. Information herein is believed to be reliable but Equitymaster does not warrant its completeness or accuracy and expressly disclaims all warranties and conditions of any kind, whether express or implied. Equitymaster may hold shares in the company/ies discussed herein. As a condition to accessing Equitymaster content and website, you agree to our Terms and Conditions of Use, available here. The performance data quoted represents past performance and does not guarantee future results.

    SEBI (Research Analysts) Regulations 2014, Registration No. INH000000537.

    Equitymaster Agora Research Private Limited. 103, Regent Chambers, Above Status Restaurant, Nariman Point, Mumbai - 400 021. India.
    Telephone: +91-22-61434055. Fax: +91-22-22028550. Email: info@equitymaster.com. Website: www.equitymaster.com. CIN:U74999MH2007PTC175407

    Become A Smarter Investor In
    Just 5 Minutes

    Multibagger Stocks Guide 2017
    Get our special report, Multibagger Stocks Guide (2017 Edition) Now!
    We will never sell or rent your email id.
    Please read our Terms


    Aug 16, 2017 (Close)



    Detailed Quarterly Results With Charts