BPCL's New LPG Plan: 10kg Cylinders to be Available in 100 Cities by August 15

State-owned oil company Bharat Petroleum Corporation Limited (BPCL) has provided an update for its LPG customers. The company plans to expand the availability of its 10kg LPG cylinders to 100 cities across 24 states by August 15.

Additionally, the company has modified its strategy regarding crude oil procurement for the June quarter. This information was shared during a conference call held following the announcement of the June quarter results.

However, BPCL reported a net loss of ₹3,962 crore for the same quarter. Despite this, brokerage houses have maintained a positive outlook on the company's stock.

What changes are expected by August 15?

BPCL announced that the reach of its 10kg LPG cylinders will be further expanded.

It will be available in 100 cities across 24 states by August 15.

This will provide more options to small families and customers with lower LPG consumption.

What changes were made to crude oil procurement?

During the June quarter, the company altered its sources for crude oil procurement.

Crude purchased from Russia accounted for 38% of the company's total procurement.
Purchases via spot cargoes rose to 69%, up from 44% in the same quarter of the previous year.
The company also increased crude oil imports from Venezuela and Angola.
BPCL currently holds a crude oil stock of 3.8 million tonnes.
This stock is sufficient to meet the company's requirements for approximately 35 days.

How did the company perform in the June quarter?

BPCL reported a net loss of ₹3,962 crore for the April-June quarter. In the preceding quarter, the company had posted a profit of ₹3,919 crore. However, the reported loss was significantly lower than market estimates. According to Bloomberg estimates, the company could have incurred a loss of up to ₹12,632 crore.

Key quarterly figures:

Total revenue: ₹1.51 lakh crore
EBITDA: Loss of ₹4,077 crore
Additionally, the company stated that its Mozambique LNG project is expected to commence operations in the 2029 fiscal year (FY29).

What are brokerage houses saying?

Despite the June quarter results, several brokerage houses remain positive about BPCL.

Citi has maintained a 'Buy' rating with a target price of ₹350. The brokerage notes that the company's operations remained robust despite the challenging environment, and BPCL continues to be its top pick among oil marketing companies.
Macquarie has also retained an 'Outperform' rating with a target price of ₹370. According to the firm, while the marketing business was weak, the refining business delivered better-than-expected earnings. However, it also cautioned that continued volatility in global crude oil prices could impact the future earnings of oil marketing companies.
Around 12:25 PM, BPCL shares were trading 0.49% lower at ₹312.95, while the BSE Sensex recorded a decline of 0.27% at the same time.