BPCL

Post the dismal numbers from HPCL one did not expect much from BPCL. And it did not disappoint. The PSU Oil Marketing company (OMC) posted, for Q2FY14 a sharp 81% (YoY) drop in net profit at Rs.931 crore though net sales rose 9% at Rs.61,757 crore.  The average GRMs for H1Fy14 was lower at $4.38/barrel compared to $4.55/barrel and in the quarter, it was at $4.65/barrel much lower on YoY. Given crude prices at the current prices, GRMs are expected to remains around the same levels in the months to come.

The market sales during the half year ended 30th September 2012 was higher at 16.27 MMT when compared to 14.87 MMT achieved during the corresponding period of previous year. Increase was mainly in MS-Retail (6.74%),     HSD-Retail        (14.95%),          RLNG   (28.12%)          and      LPG     (4.88%)            partly   offset by decrease in Furnace Oil (-5.09%). The biggest bane for the OMCs is the under-recoveries on sale of sensitive petroleum products. In H1FY14, it was at Rs. 7280 crore for the current half year v/s Rs.5051 crore in H1Fy13. The company received a compensation of Rs. 7,23,940 from the Govt  v/s Rs.3,52,446 received last year. The company had to thus absorb net under-recovery of Rs.6133 crore during in current H1 v/s Rs. 6583 crore (YoY). There was also a forex loss of Rs.444 crore. Going ahead, the picture will continue to look grim as long as under-recoveries will exist and with elections now round the corner, there might not be much relief which the company might get through price rise. Cash and equivalent as at 30^th Sept 2013 stands at Rs.349 crore.