BPCL share price declines post Q3 results, dividend announcement. Here's why

Stock Market Today: Bharat Petroleum Corporation (BPCL) share price opened higher but soon thereafter declined up to 1% despite strong Q3 results and dividend announcements on Thursday, January 23.

BPCL share price opened at ₹284.70 on the BSE, slightly higher than the previous close of ₹277.70, post Q3 results that were declared after market hours on Wednesday. BPCL share price nevertheless dipped more than 1% to ₹272.55 levels.

BPCL Q3 results

Bharat Petroleum Corporation reported a net profit for the quarter ended December 2024 at ₹4,649 crore, up 36.85% year-on-year over ₹3,397.27 crore reported during the year-ago quarter. The net profit nearly doubled compared to ₹2,397.23 crore in the previous quarter ended September 2024.

However, BPCL revenue from operations during Q3 FY25 stood at ₹1,27,520.50 crore, slightly lower than ₹1,29,946.95 crore during the year-ago quarter.

What's behind the fall in BPCL shares?

Analysts attribute the following reasons behind a decline in BPCL share price:

1, Volatile markets

One reason for BPCL's share price decline remains volatility in benchmark indices ahead of the Union Budget.

2. Rising crude prices

The rising crude oil prices are adding to concerns about the profitability of oil marketing companies such as BPCL. The higher cost of crude oil impacts the marketing margins that OMCs earn if the retail prices of auto fuels do not rise in the same proportion. Marketing margins are margins that oil marketing companies earn by selling fuel through retail outlets.

Also if crude prices rise, OMCs have to spend more on fuel imports and the depreciating rupee i further adding to the rise in costs of imports. The same leads to higher working capital requirements by OMCs.

3. Declining benchmark refining margins

The higher tariff concerns are putting pressure on benchmark refining margins.

“Oil refining giant Bharat Petroleum Corp. Ltd. reported strong operational performance annually in Q3FY25 due to improved marketing margins. The average gross refining margin (GRM) fell to $5.95/barrel in 9MFY25, down from $14.72/barrel in the same period last year. The temporary shutdown of the refineries impacted throughput. The company’s performance will depend on the recovery timeline and sustainability of marketing margins. Given the decline in fuel consumption and volatile crude oil prices, we will closely monitor any government actions that could affect the company's financial performance in the short to medium term” said Akriti Mehrotra, Research Analyst, StoxBox.

BPCL dividend details

The Board of Directors at their meeting held on January 22, 2025, in addition to considering and approving financial results declared an Interim Dividend of ₹5 per equity share of face value of ₹10 each.

The oil PSU company has fixed January 29, 2025, as the record date for determining the eligibility of the shareholders to receive the said interim dividend. The company had said that the dividend shall be paid out to the shareholders before February 20, 2025.

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