BPCL Q2 Results: Net profit slumps 72% to ₹2,397 crore on weak refining margins, expenses rise 9% YoY; Stock sheds 5%

BPCL Q2 Results: Bharat Petroleum Corporation Limited (BPCL) announced its July-September quarter results for fiscal 2024-25 (Q2FY25) on Friday, October 25, reporting a crash of nearly 72 per cent in its standalone net profit to ₹2,397 crore as refinery margins fell and marketing margins shrunk, compared to ₹8,501 crore in the corresponding period last year.

The state-owned oil marketing company (OMC)'s revenue from operations in the second quarter of the current fiscal rose marginally by one per cent to ₹1.17 lakh crore, compared to ₹1.16 lakh crore in the year-ago period. BPCL share price plunged six per cent on Friday over poor Q2FY25 results. The stock settled 4.79 per cent lower at ₹305.95 apiece on the BSE.

Also Read: Israel-Iran war: TCS, Adani Ports to BPCL — experts see selling heat in these 10 Indian stocks

BPCL Q2 Results: Key Metrics

On the operating front, BPCL's earnings before interest, taxes, depreciation, and amortization (EBITDA) during the September quarter was ₹4,547 crore, and the margin came in at 4.4 per cent. The country's third-largest oil refiner by capacity said the average gross refining margin (GRM) for April-September fell to $6.12 per barrel from $15.42 per barrel a year earlier.

BPCL's total expenses rose nine per cent to ₹1.15 lakh crore, compared to ₹1.06 lakh crore in the year-ago period. For H1FY25, BPCL reported a 2.45 per cent growth in market sales, achieving 25.55 million tonnes (MMT) of market sales from a year ago. The market sales for the September quarter under review were up two per cent at 12.39 MMT, compared to 12.19 MMT a year ago.

Also Read: Oil & gas, paint, tyre stocks in focus on rising crude oil prices; ONGC gains; BPCL among largest Nifty 50 losers

BPCL decided not to raise capital through a rights issue due to improved internal fund generation, and the Ministry of Petroleum and Natural Gas has said it will not allocate funds for capital support to oil marketing companies.

The OMC and other state-owned fuel retailers—Indian Oil Corporation (IOC) and Hindustan Petroleum Corporation Ltd (HPCL)—made extraordinary gains last year by holding petrol and diesel prices despite a drop in cost.

The price freeze was justified in the name of recovering losses BPCL and the other two retailers had suffered in the previous year when they did not raise retail prices despite a surge in cost. The gains arising from the price freeze were eroded with petrol and diesel prices being cut by ₹2 per litre each just before general elections were announced.

Also Read: BPCL board approves joint ventures with Sembcorp Green Hydrogen India & GPS Renewables to meet net-zero goals

This together with a drop in product cracks or margins on relatively stable crude oil prices led to a fall in profits. Cracks -- the difference between raw material crude oil and final product price -- have shrunk from highs of 2022-23.