Standalone refineries: 1QFY04 review - Views on News from Equitymaster

Helping You Build Wealth With Honest Research
Since 1996. Try Now

  • MyStocks


Login Failure
(Please do not use this option on a public machine)
  Sign Up | Forgot Password?  

Standalone refineries: 1QFY04 review

Sep 4, 2003

Standalone refineries have performed well both on the Indian stock markets as well as financially in the June quarter. Higher crude prices and parental support has been the drivers of growth for these companies. Let us review the consolidated financial performance of BRPL, MRPL, CPCL, KRL in 1QFY04.

(Rs m) 1QFY03 1QFY04 Change
Net Sales 66,058 68,961 4.4%
Net claim from oil pool account (65) -  
Other Income 475 1,192 151.3%
Expenditure 62,724 64,339 2.6%
Operating Profit (EBDIT) 3,269 4,623 41.4%
Operating Profit Margin (%) 4.9% 6.7%  
Interest 2,404 1,430 -40.5%
Depreciation 1,539 1,564 1.7%
Profit before Tax (200) 2,820  
Tax (133) 851  
Profit after Tax/(Loss) (66) 1,970  
Net profit margin (%) -0.1% 2.9%  
No. of Shares 2,239.6 2,239.9  
Diluted Earnings per share (Rs)*   3.5  
P/E   14.9  

On a consolidated basis, the companies reported an increase of about 4% in its topline. Volumes in fact declined during 1QFY04. However, as BRPL was able to significantly raise its volumes, due to sourcing agreement with parent, fall in volumes was arrested to a certain extent. The major reason for the marginal rise in topline was due to higher crude prices as compared to the same period last year. This led to higher realisations and a consequent improvement in sales during 1QFY04.

Expenses also rose in line with sales. However the increase was at a lower pace as compared to increase in topline and this resulted into higher operating profits for the companies. Rise in expenses was primarily on account of higher output and consequently higher raw material requirements by BRPL and MRPL. The companies managed to reduce their other expenses and this further aided in the improvement of operating margins of these companies (up by 180 basis points).

Apart from higher operating margins for the group, the companies were able to reduce their interest expenses significantly during the quarter and this resulted into similar improvement in profitability. MRPL has restructured it debt and this resulted into significant reduction in interest outgo. On a consolidated basis, the companies reported a net profit of about Rs 2 bn as compared to net losses of about Rs 66 m in the same period last year.

The crude prices after being stable post the war have again started moving north and this would further benefit standalone refining companies in terms of higher refining margins. This apart continuing support from their parent companies (likely to lead to higher volumes) would help the companies to get a shield as far as their sales are concerned. As survival of independent refineries was becoming increasingly difficult in the wake of rising competition in the marketing front most of the standalone refineries are now integrated with larger refinery players having their own marketing infrastructure. Hence parental support will be a key factor in the survival of these companies in the long-term.

Equitymaster requests your view! Post a comment on "Standalone refineries: 1QFY04 review". Click here!


More Views on News

CHENNAI PETROLEUM Announces Quarterly Results (3QFY20); Net Profit Up 101.7% (Quarterly Result Update)

Jan 21, 2020 | Updated on Jan 21, 2020

For the quarter ended December 2019, CHENNAI PETROLEUM has posted a net profit of Rs 64 m (up 101.7% YoY). Sales on the other hand came in at Rs 120 bn (down 0.3% YoY). Read on for a complete analysis of CHENNAI PETROLEUM's quarterly results.

CHENNAI PETROLEUM Announces Quarterly Results (1QFY20); Net Profit Down 249.6% (Quarterly Result Update)

Jul 31, 2019 | Updated on Jul 31, 2019

For the quarter ended June 2019, CHENNAI PETROLEUM has posted a net profit of Rs 2 bn (down 249.6% YoY). Sales on the other hand came in at Rs 127 bn (up 3.0% YoY). Read on for a complete analysis of CHENNAI PETROLEUM's quarterly results.

CHENNAI PETROLEUM 2017-18 Annual Report Analysis (Annual Result Update)

Jan 3, 2019 | Updated on Jan 3, 2019

Here's an analysis of the annual report of CHENNAI PETROLEUM for 2017-18. It includes a full income statement, balance sheet and cash flow analysis of CHENNAI PETROLEUM. Also includes updates on the valuation of CHENNAI PETROLEUM.

More Views on News

Most Popular

How the 8-Year Cycle Can Help Identify Multibaggers (Fast Profits Daily)

Sep 11, 2020

This is how you can apply the greed and fear cycle in the market to pick stocks.

Why We Picked This Small-cap Stock for Our Hidden Treasure Subscribers (Profit Hunter)

Sep 17, 2020

This leading household brand will profit big time in a post covid world.

This Could Be the Best September for Auto Stocks (Profit Hunter)

Sep 11, 2020

Here's why I think this month could be a great for auto stocks.

What Do the Charts Say About Buying Smallcaps Now? (Fast Profits Daily)

Sep 18, 2020

Everyone seems to be excited about buying smallcaps now...but is it the right thing to do? What do the charts tell us? Find out in this video...


Covid-19 Proof
Multibagger Stocks

Covid19 Proof Multibaggers
Get this special report, authored by Equitymaster's top analysts now!
We will never sell or rent your email id.
Please read our Terms


Sep 24, 2020 12:27 PM


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