India’s refining and marketing sector is poised for significant growth, with refining capacity expected to increase from 256 million metric tons to 309 million metric tons by 2028. Demand for petroleum products is projected to rise by 3-4% in FY25, driven by economic expansion and a burgeoning middle class.
With a market capitalization of Rs 9,053.81 crore, the shares of Chennai Petroleum Corporation Ltd were trading at Rs 608.00 per share, decreasing around 0.52 percent as compared to the previous closing price of Rs 611.20 apiece.
Matter Explanation
As of December 2024, a domestic institutional investor, Icici Prudential Smallcap Fund bought fresh 18,48,820 equity shares representing 1.24 percent of the company. Moreover, ace investor Dolly Khanna holds 16,18,520 equity shares which is equivalent to 1.09 percent of the company.
Product offering
The company’s main products include LPG, Motor Spirit, Kerosene, Aviation Turbine Fuel, Diesel, Naphtha, Fuel Oil, Lube Base Stocks, and Bitumen, marketed by IOCL. It also produces and markets specialty products like Paraffin Wax, MTO, Hexane, LABFS, Petrochemical feedstocks, Petroleum Coke, and Sulphur.
Refineries and Capacity
The company operates a crude refining capacity of 2.35 lakh barrels/day, with a 10.5 MMTPA refinery at Manali, Chennai, and a 9 MMTPA refinery under construction at Nagapattinam. It also has a 30,000 MTPA Wax Plant for paraffin wax and a 30,000 MTPA Propylene Plant for various applications.
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Financial performance
Analyzing a company’s financial performance, revenue decreased by 27 percent from Rs 16,545 crore in Q2FY24 to Rs 12,087 crore in Q2FY25, during the same time frame, the company’s net profit decreased significantly by 47 percent from Rs 1,191 crore to Rs 629 crore.
High-speed diesel constitutes 57% of the entity’s sales, followed by motor spirit (13.5%), aviation turbine fuel (10%), naphtha (6.4%), and LPG (2.75%). Sales through IOCL account for 92%, while 8% are direct sales by the company.
Refinery Expansion
CPCL is investing approximately ₹2,570 crore as part of a joint venture aimed at expanding its refinery capacity by 9 million metric tonnes per annum (mmtpa). The total project cost is estimated at ₹31,580 crore, with CPCL’s equity stake being around 25% in this venture. This investment is essential for meeting growing demand and enhancing operational efficiency.
Company snapshot
Chennai Petroleum Corporation Limited is an India-based refining company, which is engaged in the processing of crude oil into refined petroleum products and other products. The Company has approximately two refineries with a combined refining capacity of over 11.5 million tons per annum (MMTPA).
Written by:- Abhishek Singh
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