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Bharat Petroleum Corporation Limited (BPCL) Q4FY21 Conference Call Highlights

Bharat Petroleum Corporation Limited (BPCL) Q4FY21 Conference Call Highlights

Published on 22 June 2021 Views 153 Comments 1

Disinvestment:

  • BPCL is not having any plans to divest its stake in IGL and PLNG as management believes that a gradual reduction in the stakes can be destructive.
  • It is working with the govt to avoid an open offer and get an exemption so that BPCL’s value is protected.
  • The order of divestment was only for NRL from CCEA.
  • There is no correspondence-indication from Govt as regards upstream disinvestment and it is unlikely to happen at this juncture anyway.
  • BPCL would take a call on residual treasury shares and is waiting for opportunities. The Company expects disinvestment to complete by FY22.

Refining and Petroleum:

  • Q4FY21 pro-rata PAT was Rs9bn with USD45.12/bbl of GRM incl. excise benefits. FY21 PAT was Rs30.48bn with USD37.23/bbl reported GRM.
  • BORL will become a 100% subsidiary with Oman Oil’s exit and acquisition of MP govt warrants amounting to a 0.63% stake.
  • Product cracks, including non-transport fuels, have gone up QoQ in Q4FY21. The second wave lockdown and lower demand have led to 86-87% refining capacity utilization currently for BPCL.
  • In Kochi, two PDPP units, acrylic acid, and oxo-alcohol were commissioned, while the third one, acrylate, is under commissioning, with Japanese licensors using the virtual mode. Kochi refinery MS block has also been commissioned.
  • PDPP should start properly from Q2FY22 with output growing.

Marketing:

  • In Q4FY21, BPCL recorded Year-on-Year growth of 9.89% & 5.9% in retail petrol and retail diesel sales respectively.
  • The market Share of BPCL in the auto fuel market was 29% in Q4FY21. Overall, the company is having a market share of 24.5% as of Q4FY21.
  • ATF sales were impacted by international flight restrictions.
  • The subsidy for LPG is almost nil (from May 20) as the Govt has been serious to increase domestic prices.
  • With BPCL going private and targeting a 31% market share in auto fuels in 2 years, the overall private sector market share would cross 40%, hence BPCL believes that the Govt may not signal price interventions by then and deregulation would deepen.
  • BPCL added 752 fuel pumps (ROs) in Q4 and 2,444 in FY21, taking the total to 18,637. It has the highest unit throughput in the industry (PSUs).

Capex:

  • Capex in FY21 was Rs. 110.64bn of which Rs. 30 billion was on refining, Rs. 10 billion on petchem, Rs. 50 billion on marketing, Rs11.56 billion on BPRL equity, and remaining on pipelines-others.
  • FY22 CAPEX target is Rs. 120 billion with Rs. 30 billion on refining, Rs. 10 billion on petchem, Rs 40 billion on marketing, Rs. 13 billion on BPRL equity, Rs. 5.5 billion on gas and remaining others.
  • This Capex expenditure will mainly include Mumbai refinery kerosene treatment unit and revamp unit for Rs12.2bn, the balance of Kochi MS Block (Rs32.89bn was total), some on Kochi polyol and 2G bioethanol plant in Odisha.

Other Highlights:

  • Activities in Mozambique, however, stopped due to violence but BPCL sees a 6-12 months delay and no permanent impact. No impairment has been taken in Mozambique.
  • BPCL has 40 EV charging and 7 battery swapping stations in different cities. EV Investment is low by BPCL as of now.
  • BPRL impairment was based on relinquished blocks and some existing assets based on prices, which may get reversed also going ahead. Globally projects remain unaffected.

Dividends:

  • The Company does not assure high dividends in future.
  • The special dividend of Rs. 35 per equity share was from the NRL sale, while Rs44/sh was on adjusted PAT of Rs110bn+ in FY21
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