BPCL Earnings Preview: Quarterly loss expected with clarity on LPG grant

OMCs have not been able to raise prices recently to aid the government combat inflationary pressures.

CNBC-TV18 had exclusively reported earlier that Oil Marketing Companies may seek government intervention as they are weighed down by fuel under recoveries. Sources said that the combined under recoveries for LPG and fuel are over Rs 1 lakh crore.

As has been the case with BPCL's peers, the company's operating loss is likely to be driven by negative marketing margin and a sequential drop in Gross Refining Margin (GRM).

For the September quarter, BPCL's reported GRM is likely to fall to $4.36 per barrel, compared to $25.6 per barrel during the June quarter. On the other hand, the company's Blended Gross Marketing Margin is likely to be a negative Rs 5.2 per litre.

Similar to its peers, BPCL is also likely to report inventory losses in both refining and marketing segments. An inventory loss occurs when a company buys a product at a higher price, but is forced to sell it at a lower price.

BPCL's refinery throughput is expected to reach 10 Million Metric Tonnes (MMT), growing 3 percent from the June quarter and 39 percent from the same period last year. This will be led by a ramp-up of utilisation at the company's Kochi refinery.

Shares of BPCL are down over 21 percent this year, second to HPCL, shares of which have declined nearly 30 percent year-to-date.