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.
BRPL: IOC the key - Views on News from Equitymaster
  • E-MAIL
  • A  A  A
  • Aug 28, 2003

    BRPL: IOC the key

    Bongaigaon Refinery and petrochemicals Limited, announced its quarterly results reporting a 37% growth in its topline while bottomline increased significantly by 167%. The strong performance of the company has been led mainly by higher capacity utilisation as well as reduction in its operating expenses. Let us analyse the results in detail.

    (Rs m) 1QFY03 1QFY04 Change
    Net sales 3,886 5,327 37.1%
    Net claim from oil pool account (65) -  
    Other Income 322 850 164.0%
    Expenditure 3,476 4,869 40.1%
    Operating Profit (EBDIT) 345 458 32.8%
    Operating Profit Margin (%) 8.9% 8.6%  
    Interest 88 52 -40.6%
    Depreciation 78 75 -3.0%
    Profit before Tax 502 1,181 135.2%
    Tax 180 322 78.6%
    Profit after Tax/(Loss) 322 859 166.8%
    Net profit margin (%) 8.3% 16.1%  
    No. of Shares 199.8 199.8  
    Diluted earnings per share* 6.4 17.2  
    P/E Ratio   4.5  

    BRPL reported a healthy growth in its topline on account of higher capacity utilization up from 64% in 1QFY03 to 88% in 1QFY04. This increase in capacity utilization was mainly on account of the company receiving additional Ravva crude oil of about 1.5 m tonnes from Krishna Godavari Basin. The company, a subsidiary of IOC, is expected to operate at about 85% capacity utilization for the current year and this will help to increase its topline as well as improve the margins during the entire year. This apart, higher realisation also led to an increase in topline.

    Increase in volumes and also higher crude prices as compared to last year resulted in an increase in raw material costs (as a percentage of sales raw material costs increased from 87% in 1QFY03 to 94% in 1QFY04). However the company was able to reduce its staff costs and also kept its other expenses under control. This coupled with inventory gains helped it to bring expenses under control. However, on an overall basis, total expenses as a percentage of sales increased marginally and this resulted in a marginal decline in the operating profit margins. BRPL reported an increase in refinery margins on account of higher capacity utilization. It should be noted that being in North Eastern region, the company also enjoys benefit on the excise duty front.

    Apart from increase in refinery margins, the company was able to reduce its interest outgo and this also aided bottomline growth. Depreciation also witnessed a decline during the quarter. Consequently the company reported a significant jump of about 167% in bottomline.

    segment wise breakup
    Net sales 1QFY03 1QFY04
    Refinery segment 4,197 5,846
    Petrochemicals segment 131 153
    PSF segment 113 2
    PBIT margins 1QFY03 1QFY04
    Refinery segment 15.9% 21.4%
    Petrochemicals segment -9.4% 20.9%
    PSF segment -67.7% -3947.1%
    (figures in m)    

    If one were to look at the segment wise breakup, refinery and petrochemicals business of the company reported improvement in PBIT margins. While the PSF unit is in losses. On account of poor economic size of its PSF and petrochemicals plants, the units are currently shut down. A significant chunk of its revenues comes from refinery business only.

    At Rs 78, the stock is trading at a P/E multiple of 4.5x its 1QFY04 earnings (8.8x its FY03 earnings). IOC is likely to play a key role in the fortunes of the company going forward as increasingly BRPL will be able to sell its products to IOC. This means better capacity utilisation for the company and consequently improvement in its overall refinery efficiencies. This is an important factor considering the fact that the country is facing oversupply scenario in petroleum products and increasing competition in marketing front.



    Equitymaster requests your view! Post a comment on "BRPL: IOC the key". Click here!


    More Views on News

    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.

    Mahanagar Gas Ltd (IPO)

    Jun 21, 2016

    Should one subscribe to Mahanagar Gas IPO?

    More Views on News

    Most Popular

    This Small Cap Can Drive Chinese Players Out of India (and Make a Fortune in the Process)(The 5 Minute Wrapup)

    Aug 17, 2017

    A small-cap Indian company with high-return potential and blue-chip-like stability is set to supplant the Chinese players in this niche segment.

    Dear PM Modi, India is Already Land of Self-Employed, and It Ain't Working(Vivek Kaul's Diary)

    Aug 21, 2017

    Most Indians who cannot find jobs, look at becoming self-employed.

    It's the Best Time to Buy IT Stocks(Daily Profit Hunter)

    Aug 16, 2017

    The IT Sector could be in an uptrend till February 2019. Are you prepared to ride the trend?

    5 Steps To Become Financially Independent(Outside View)

    Aug 16, 2017

    Ensure your financial Independence, and pledge to start the journey towards financial freedom today!

    Think Twice Before You Keep Money In A Savings Bank Account(Outside View)

    Aug 22, 2017

    Post demonetisation, a cut in bank savings deposits rates was in the offing.

    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


    Apr 20, 2009 (Close)


    • Track your investment in BONGAIGAON R with Equitymaster's Portfolio Tracker. Set live price alerts, get research alerts and more. Get access now...
    • Add To MyStocks