Bongaigaon Refinery was the subject of much glee today following the last quarter's sterling turnaround with a net profit of Rs 109.4 crore.

In fact, such was the enthusaism on the counter that the scrip hit its 52-week high of Rs 30.15 earlier today. However, by 11:45 IST, the scrip came off to Rs 29.60 (still higher by more than 13% over its yesterday's close). Relatively high volumes of 17.05 lakh shares were recorded on the counter till then.

The scrip of Bongaigaon Refinery (BRPL) has now risen 111.5% from Rs 14 on 1 April 2003 . It srecent rise was purely on expectations of sterling results, which in any case were forthcoming . The future prospects of the company are also believed to be very bright.

For Q4 ended 31 March 2003 (results announced today), the company registered a massive net profit of Rs 109.4 crore compared to a net loss of Rs 83.31 crore in the corresponding period of the previous year. Net sales also jumped two-fold, by 222.5% to Rs 480.65 crore from Rs 149.04 crore in MQ 2003.

The excellent performance by BRPL has manifested mainly from the cut in excise duty on petroleum products in the Union Budget for 2002-03. A special concession was given to refineries in certain areas (BRPL's refinery is located in the north-east of India, affording the company an extended excise concession). Now, the company has to pay excise duty at the rate of 16%, from the earlier 32%. Last year, the company had to pay Rs 161 crore as excise duty. Now there will be considerable savings on this front. Also, with the company's products being marketed by IOC, the company does not have to incur any cost on marketing infrastructure.

Earlier, the government approved the proposal to allocate 1.5 million tonnes of Ravva crude to BRPL from 2003-04. This is expected to increase the availability of crude to refineries in the North-east, which have been running below capacities as a result of a shortage. Coming after the revision in royalty, which will benefit oil-producing states like Assam, this decision will improve the financial viability of refineries in the North-east. This should lead to increased costs savings.

There have been reports in the recent past that a strategic alliance with RIL to jointly manage the company's polyester business is on the cards. Analysts say the alliance, if materialises, will prove a win-win situation for both companies. Reliance Industries (RIL), for instance, does not have a foothold in the markets of eastern India. The alliance will help the company to expand its market presence there. BRPL, on the other hand, will see the recommencing of operations at its unit, which has been idle since October 2001.

Reports reveal that both companies are at an advanced stage of negotiations to work out the modalities of the alliance for reviving BRPL's polyester staple fibre (PSF) unit.

RIL will provide technical expertise and marketing support to BRPL. RIL, which controls the domestic polyester market, also supplies raw material for the manufacture of polyester to BRPL. BRPL has a capacity to produce 30,000 tonnes of polyester staple fibre (PSF) at its plant in Assam. Reports suggest BRPL's PSF product will continue to be marketed under the name Bonpoly.

BRPL had to suspend its polyester operations mainly due to low prices and high input costs.

BRPL was incorporated in Assam in 1974. The company has a refining capacity of approximately 2.35 mtpa. It also houses a petrochemical complex for the manufacture of xylene, DMT, orthoxylene, paraxylene and polyester staple fibre (PSF). The company is a major exporter of PSF to Bangladesh, Belgium, France, Iran, Vietnam, etc.

BRPL has the unique distinction of being the first indigenous grassroots refinery in the country integrated with a petrochemical complex at one location.

Subsequent to the decision of the Government of India (GOI) to sell its entire shareholding in BRPL to IOC (it disinvested 14,87,93,826 shares or 74.46% of the paid-up capital in favour of IOC on 29 March 2001), BRPL became a subsidiary of IOC. While the company continues to remain a state-run undertaking, it will have the benefit of technical, managerial and financial inputs from IOC, a Fortune 500 and 'Navaratna' company.

As on 31 March 2003, the public and institutions held 6.84% and 14.32%, respectively, in BRPL.