Hindustan Petroleum Corporation Limited (HPCL)’s performance for the quarter ended March, like that of Bharat Petroleum Corporation Limited (BPCL), was impressive and much ahead of estimates.
HPCL’ profit at Rs 1,553 crore declined 28.2 per cent year-on-year (y-o-y), but beat Bloomberg consensus estimate of Rs 1,087 crore by 43 per cent. The topping of the estimate was led by better-than-expected operating performance. Ebitda at Rs 2,643 crore was substantially higher than Rs 2,378-crore Bloomberg consensus estimate.
BPCL, too, had posted good results for the March quarter (Q4) on Thursday after market hours. Falling crude oil prices pulled down revenues in the quarter. Crude oil prices have fallen 35 per cent in Q4 year-on-year. While BPCL saw net sales at Rs 44,146 crore, a decline of 14 per cent over the year, HPCL’s net sales at Rs 48322 crore too were lower than Rs 48,639 crore a year ago. Overall, revenues were ahead of Bloomberg consensus estimates of Rs 40,522 and Rs 36,853 crore for BPCL and HPCL, respectively. Inventory losses for BPCL stood at Rs 990 crore in Q4 versus Rs 1,430 crore a year ago. Lower crude oil prices, fall in tax rate from 32.7 per cent in the March 2015 quarter to 27.1 per cent in March 2016 quarter, and higher Other Income aided net profit in the quarter.
Net profit for BPCL was down 10.6 per cent to Rs 2,549 crore however was much ahead of Bloomberg estimate of Rs 1,906 crore.
HPCL also saw lower tax expenses of Rs 649.54 crore on March’16 quarter compared to Rs 1121.49 crore in corresponding quarter last year, however the benefits were negated by fall in other income to Rs 407.85 crore from Rs 1015.54 crore in the year ago quarter.
The companies did not bear any under-recovery burden in the quarter.
Gross refining margin (GRM) for BPCL stood at $6.3 a barrel while HPCL reported GRM of $7.52 for the quarter. For the year BPCL reported GRM’s at $6.59 a barrel compared to $3.62 in Fy15. HPCL reported GRM of $ 6.68 per barrel for Fy16 against $2.84 a barrel seen in FY15.
Both the companies are believed to have earned better marketing margins as earnings are being supported by higher refining margins and lower inventory losses too.
Post results HPCL saw its shares surge 9.81 percent to Rs 930.90 while BPCL shares too surged 9.12 per cent to Rs 1010.85 levels on Friday.
BPCL recommended issue of bonus shares in the ratio of 1 equity share of Rs 10 each for every 1 existing equity share of Rs 10 each. The board also recommended a final dividend of Rs 15 per equity share of face value of Rs 10 each for FY16. HPCL has recommended dividend of Rs 16 per equity share.
HPCL board has approved on May 27, 2016 acquisition of 21670020 equity share of Petronet MHB Ltd. (PMHBL) @ Rs.12.04 from Petronet India Ltd totaling to Rs. 26.09 crore.