BPCL Q4 earnings, dividend payout boost investor sentiment

BPCL Q4 earnings, dividend payout boost investor sentiment

A strong Q4 performance by Bharat Petroleum Corporation (BPCL) led by inventory gains, and a handsome dividend payout announcement drove its stock prices. The stock gained more than 3% in early morning trades, touching 52-week highs on Thursday.
The company rewarded investors with a large payout of Rs 58 a share as dividend. This was in addition to the dividend of Rs 21 per share announced earlier during the year, taking total dividend payout to about Rs 79 a share. The dividend payout translates to more than 16% dividend yield for FY21 at the price the stock is trading at. The company has paid proceeds from treasury stock sale and Numaligarh refinery (NRL) stake sale as a dividend.

The company had completed the sale of its entire 61.65% stake in NRL for about Rs 9,876 crore to a consortium of Oil India and Engineers India, and the government of Assam. Also, it had sold treasury shares, that is BPCL equity shares held by the BPCL Trust, for about Rs 5,510 crore.As both developments are in the direction of paving the way for BPCL privatization, the street will be watchful of further progress on this front.

Meanwhile, the company’s Q4 financial performance, too, remained strong. Both marketing margins and refining margins reported by the company were ahead of expectations. The inventory gains (carrying over lower-priced inventory in rising crude oil price environment) benefited the company during Q4.
BPCL’s reported marketing margin stood at Rs 6.1 per litre. The marketing sales volumes, too, were higher.
The reported gross refining margins, or GRM, at $6.6 per barrel, which was boosted by an inventory gain of about $4.2 per litre.
The company’s forward outlook also remains decent with benchmark refining margins improving gradually. Marketing profitability is also to stay firm with retail price hikes continuing in accordance with crude oil prices.

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