BPCL surprises with a 1:1 bonus
BPCL posted a drop in its net profit for Q4FY16 yet the stock price hit a new 52-week high today at Rs.1023.65 and this was after breaching the upper circuit at Rs.1019. Volumes are up almost 6 times.
The market is thrilled with the unexpected happy news from BPCL - it surprised everyone with a 1:1 Bonus; this was least expected. And the market is celebrating this sweet surprise. It has fixed 11th July as the record date.
On the results front, the oil marketing PSU naturally bore the brunt of falling crude prices. If ONGC gained, which is an upstream oil company, the downstream ones were at a disadvantage. The company reported a 11% (YoY) drop in net profit for Q4FY16 at Rs.2549 crore. Its total income was down 14% at Rs.44,197 crore. Its Gross Refining Margin (GRM) doubled up from US$3.62 /barrel to US$6.59/barrel in FY16 but for the quarter, it slipped from $7.85/barrel to $6.30/barrel (YoY). GRM is what the company earns for turning every barrel of crude oil into fuel. The company also received a fuel subsidy of Rs.1598 crore from the Govt, plus Rs.198 crore from ONGC.
BPCL ended FY16 with a consolidated net profit of Rs.7981 crore, up 66% on a 22% drop in total income at Rs.1,90,392 crore.