Refiner With A Conscience

Bharat Petroleum Corporation (BPCL), a Maharatna, is India's second-largest government-owned downstream oil producer, and a constant presence in the top five of the BW Real 500 companies list basis its consistently robust financial performance. The company is ranked fifth in the FY 2021-22 rankings curated by our knowledge partner TechSci Research after extensive data crunching. Last year, BPCL was ranked fourth in the list. 

Bharat Petroleum has been among the first corporates in India to have announced their 'Net Zero' plans. The company's ambition is to achieve Net Zero in Scope 1 and Scope 2 emissions by the year 2040 to curb the carbon footprint of its operations. 

For the period under review (April 2021 to March 2022), BPCL reported a net profit of Rs 9.076.50 crore as opposed to a net profit of Rs 19,110.06 crore in the previous financial year. On a standalone basis, the company recorded a profit after tax (PAT) of Rs 8,789 crore as against a PAT of Rs 19,042 crore in the previous year. Arun Kumar Singh, the Chairman & Managing Director during FY22 explained the lower PAT by saying: "The higher PAT last year was essentially due to the one-time gain on the sale of stake in Numaligarh Refinery. Besides, in FY22 the gains due to higher refining margins were more than offset by the lower marketing margins and lower inventory gains, resulting in a dampening effect on our profit." BPCL earned $9.09 on turning every barrel of crude oil into fuel in FY22, up from $4.06 per barrel gross refining margin in the previous fiscal.

The company's Board of Directors declared a total dividend of Rs 16 per share on earnings of Rs 41.31 per share for FY22.

Singh was the CMD at BPCL during FY22. Today, he is the chairman and managing director of ONGC, following his appointment to the post in December 22 for a three-year tenure. Vetsa Ramakrishna Gupta, earlier the director of finance at BPCL, is the interim CMD since November 2022. 

Privatisation Drive

The last three years have been interesting for BPCL, with the central government taking a decision in November 2019 to privatise it. Bids were invited in early March 2020 for the sale of 52.98 per cent in the company but the process was stalled by the Covid pandemic. Subsequently, a decision was taken to consolidate the businesses of BPCL before re-starting the process of privatisation. It started with the sale of Assam-based Numaligarh Refinery (NRL). The central government decided to keep NRL as a public sector entity. In March 2021, BPCL sold its entire 61.5 per cent stake in NRL to a consortium of Oil India and Engineers India along with the government of Assam for nearly Rs 10,000 crore. Meanwhile, BPCL acquired 36.6 per cent in Bina refinery in Madhya Pradesh from Oman Oil company for Rs 2,400 crore. With rising oil prices, strong voices in favour of going green and several other related issues, privatisation of BPCL is "not on the cards" anymore. 

Pillars of Future Growth 

In order to hedge against any possible future decline in liquid fossil-fuel business, BPCL has firmed up plans to diversify and expand in adjacent and alternative businesses. This will create additional revenue streams for the company, Singh said. While the core businesses of refining and marketing of petroleum products continue to serve as a solid foundation, providing stability and consistent cash flows, petrochemicals, gas, renewables, new businesses (consumer retailing), e-mobility and upstream have been identified as pillars of future growth and sustainability.

Arun Kumar Singh, CMD, Bharat Petroleum Corporation (BPCL) 

Total Assets: Rs 1,87,529 crore

Total Income: Rs 4,34,838 crore

Operating Profit: Rs 16,037 crore

Net Profit: Rs 11,682 crore