BPCL Q4FY25: Profit likely to decline due to GRM, marketing margin squeeze

The profit of state-run Bharat Petroleum Corporation (BPCL) is expected to decline on a sequential basis in Q4 FY25 on account of lower auto fuel marketing margins and subdued gross refinery margins (GRMs).

JM Financial in a report said that BPCL is likely to report 17-23 per cent Q-o-Q decline in EBITDA on lower auto fuel marketing margin due to around 4 per cent sequential rise in crude price on a Rs per litre basis.

Besides, lower GRMs due to lower Russian crude discount benefit and slight inventory loss is also dragging down margins, the brokerage added.

“OMCs’ weighted average auto-fuel gross marketing margin is still strong at Rs 7 per litre in Q4 FY25 but is lower vs. very strong margin of Rs 9.5 in Q3 FY25 due to around 4 per cent Q-o-Q rise in crude price on Rs per litre basis, while OMCs’ LPG under-recoveries is likely to be high at around ₹12,200 crore in Q4 FY25 in the absence of any government compensation,” it added.

Emkay Global Financial Services also expects a sequential decline in margins.

“Diesel marketing margins fell 41 per cent Q-o-Q to Rs 5.1 per litre in Q4 FY25; petrol margins also declined, to Rs10 a litre vs Rs12 Q-o-Q, on account of marginal uptick in crude oil prices and depreciating rupee. Brent averaged at around $76 per barrel in Q4 FY25, up 1 per cent Q-o-Q,”the brokerage pointed out.

Benchmark GRM corrected to around $3.2 a barrel from $5 Q-o-Q, largely owing to about 23 per cent Q-o-Q decline in gasoline spreads, while gasoil was steady. Russian crude imports declined, and discounts narrowed during the quarter due to stricter US sanctions, while Middle East OSP premiums were also higher, Emkay added.

The oil marketing company (OMC) had reported a 20 per cent Y-o-Y growth in its consolidated net profit at around ₹3,806 crore during the December quarter in FY25. Consolidated total income stood at around ₹1.28 lakh crore.

The Average Gross Refining Margin (GRM) of the corporation for nine months ended December 31, 2024 is $5.95 per barrel against $14.72 per barrel in the year-ago period. This is before factoring the impact of Special Additional Excise Duty and Road & Infrastructure Cess, levied from July 1, 2022.

As of December 2024, the OMC has a cumulative net negative buffer of around ₹7,228.56 crore and accordingly the revenue from sale of LPG was reduced by this amount.

Published on April 29, 2025