India's Bharat Petroleum misses Q4 profit view on lower marketing margins, higher costs

FILE PHOTO: A man paints the logo of oil refiner Bharat Petroleum Corp on a wall on the outskirts of Kochi

BENGALURU/NEW DELHI (Reuters) -India's Bharat Petroleum Corp (BPCL) posted a smaller-than-expected fourth-quarter profit on Thursday, hurt by lower marketing margins and higher raw material costs.

The state-owned firm's standalone net profit fell nearly 35% to 42.24 billion rupees (about $506 million), well below analysts' estimate of 52.66 billion rupees, per LSEG data.

BPCL, the country's third-largest oil refiner by capacity, said its average gross refining margin - the profit from making refined products from one barrel of oil - was $14.14 per barrel for the year ended March 31, compared to $20.24 per barrel a year earlier.

The company is "cautiously optimistic" and expects crude oil prices to remain in the range of $83-$87 per barrel in the near-future, its Chairman and Managing Director G. Krishnakumar said.

"We are planning to expand our refining capacity to 45 million metric tonnes per annum and add 4,000 new fuel stations by FY2029," Krishnakumar said.

The executive flagged that BPCL is setting up two petchem facilities, which will triple its gas footprint by fiscal year 2029.

India has been buying discounted Russian oil in recent years, helping domestic refiners mitigate the impact of higher global crude oil prices.

However, Russian discounts have fallen in the previous fiscal year and lower fuel prices in India have hurt refining margins of companies such as BPCL.

Globally, crude oil prices jumped nearly 14% in the quarter.

BPCL's revenue from operations fell 1% to 1.32 trillion rupees, while raw material costs rose nearly 3% to 565.53 billion rupees.

Separately, Bharat Petroleum approved a bonus issue of shares in the ratio of 1:1 and declared a final dividend of 10.5 rupees per share, post bonus.

($1 = 83.4718 Indian rupees)

(Reporting by Manvi Pant in Bengaluru, Nidhi Verma in New Delhi; Editing by Sonia Cheema and Mrigank Dhaniwala)