A leading petroleum company witnessed a 2 percent surge in its share price after securing a Rs.756 crore order from NTPC. The contract involves the development of solar PV power projects, signaling the company’s strategic focus on renewable energy initiatives.
Price Movement
In Thursday’s trading session, Bharat Petroleum Corporation Ltd’s share price reached an intra-day high of Rs.299.30 per share, rising 2.5 percent from the previous close of Rs.292.00 apiece. Over the past year, the shares have delivered over 30 percent returns.
What Happened
BPCL participated in NTPC’s tender for the selection of Solar Power Generators to establish 1,200 MW ISTS-connected solar PV power projects across India. During the reverse auction, BPCL emerged as the lowest bidder for a capacity of 150 MW.
The project, once finalized, will be developed over a two-year timeline with an estimated capital outlay of Rs.756.45 crore. It is projected to generate approximately 400 million units of clean energy annually, resulting in an estimated revenue of Rs.100 crore.
Capacity Expansion
Bharat Petroleum Corporation Limited (BPCL) plans to expand its refining capacity to 45 million tonnes per annum (MTPA) by 2028, up from the current 35.3 MTPA.
This includes increasing the Kochi refinery’s capacity from 15.5 MTPA to 18 MTPA, the Mumbai refinery from 12 MTPA to 16 MTPA, and the Bina refinery from 7.8 MTPA to 11.3 MTPA by May 2028. BPCL intends to invest Rs 1.7 trillion ($20.3 billion) over the next five years, with a significant focus on refinery and petrochemical expansion.
The company is also exploring the establishment of a new 12 MTPA refinery in states like Andhra Pradesh, Uttar Pradesh, or Gujarat, and diversifying its crude oil supply by procuring low-sulfur crude from South America, particularly Argentina.
Future Outlook
India’s demand for refined fuels and petrochemicals is expected to grow steadily, with BPCL’s chairman projecting an annual increase of 4-5 percent for refined fuels and 7-8 percent for petrochemicals in the coming years.
This expansion aims to meet the growing domestic demand and address the shifting dynamics in the global refining market, as other regions face refinery closures.
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Financial Overview
Turning towards the financials of the company, Supriya Lifescience Ltd reported Q2 FY25 revenue of Rs.166 crore, up remarkably by 19 percent from Rs.140 crore in the same quarter last year. Profit After Tax (PAT) increased by 53.3 percent to Rs.46 crore, compared to Rs.24 crore in the same period.
Important Financial Ratios
The Return on Capital Employed (ROCE) of the company stands at 32.1 percent, while the Return on Equity (ROE) is 41.9 percent.
The company’s Price-to-Earnings (P/E) ratio is 9.40, which is lower than the industry average of 20.7. Additionally, the company maintains a stable current ratio of 0.79 and an Earnings Per Share (EPS) of Rs.30.2.
Shareholding Pattern
As of September 2024, the shareholding pattern of Bharat Petroleum Corporation Ltd indicates that promoters hold 52.98 percent, Foreign Institutional Investors (FIIs) hold 15.39 percent, Domestic Institutional Investors (DIIs) account for 22.06 percent, and retail investors hold 8.63 percent of the shares.
Company Profile
Bharat Petroleum Corporation Limited (BPCL) is an Indian public sector oil and gas company based in Mumbai. Founded in 1976 after the nationalization of Burmah Shell, BPCL is the second-largest government-owned downstream oil producer in the country.
The company operates three major refineries and has been granted Maharatna status, signifying substantial operational and financial independence. BPCL is engaged in crude oil refining and the marketing of petroleum products, serving a wide range of industries, including defense and transportation.
Written by – Siddesh S Raskar
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