MOSL: BPCL (Buy)-Impresses with higher refining throughput, all-time-high marketing margin
BPCL: Impresses with higher refining throughput, all-time-high marketing margin
(BPCL IN, Mkt Cap USD12.2b, CMP INR392, TP INR452, 15% Upside, Buy)
- BPCL reported EBITDA of INR45.3b (+23% YoY; 23% beat) in 4QFY19. However, adjusted EBITDA (adj. for inventory and one-offs) stood at INR41.7b (+29% YoY, +22% QoQ), exceeding our estimate of INR20.1b, primarily due to an all-time-high marketing margin. The company reported a forex gain of INR2.8b, as against a gain of INR0.5b in 4QFY18 and INR1b in 3QFY19. PAT came in at INR31.2b (+17% YoY; 40% beat).
- Core GRM stood at USD2.6/bbl (our estimate: USD3.0; 4QFY18: USD5.6; 3QFY19: USD6.0). Core GRM was higher at Mumbai (USD3.03) and lower at Kochi (USD2.14) refineries. Refinery throughput of 8.2mmt (+5% YoY, +10% QoQ) was in line with our estimate.
- Implied marketing margin, inclusive of inventory gain, was at an all-time high of INR6.5/liter (v/s INR4.6 in 4QFY18 and INR2.9 in 3QFY19). Net of inventory gain, the marketing margin stood at INR6.3/liter. Domestic sales volumes were up ~6% YoY/QoQ at 11.4mmt in the quarter.
- FY19 performance: EBITDA stood at INR114b (+10% YoY) v/s INR103.5b in FY18. PAT of INR71.3b (-10% YoY) was lower than INR79.2b in the previous year due to higher interest and depreciation cost. Core GRM (throughput) stood at USD4.0/bbl (31.1mmt) v/s USD6.0/bbl (28.5mmt) in FY18.
Bharat Petroleum refines crude oil and markets petroleum products in India. Co. offers fuels and services, as well as lubricants, including automotive engine oils, gear oils, transmission oils, specialty oils, and greases; and liquid and gaseous fuels, illuminating oils, and other products from crude petroleum or bituminous minerals. Co. is engaged in the retailing of petrol, diesel, and kerosene. Co. also imports and exports fuel oil, naphtha, and base oil. Co. serves household and automobile sectors; public and private sectors; and various government establishments, such as defense, railways, state trading corporations, state electricity boards.
Motilal Oswal Financial Services Ltd. is a reputed name in Financial Services and Online Trading with group companies providing services such as Private Wealth Management, Retail Broking and Distribution, Institutional Broking, Asset Management, Investment Banking, Private Equity, Commodity Broking, Currency Broking, Principal Strategies & Home Finance.
Motilal Oswal Securities is a group company of Motilal Oswal Financial Service Limited which started as a stock trading company and has blossomed into well diversified firm offering a range of financial products and services. Motilal Oswal has built a reputation as the source for best stock trading company and this has taken a wealth of experience, knowledge and expertise, constantly working in tandem, over the years.
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