BPCL found itself piped to gains today after the company pleased the market with a 20% growth in net profit for Q4.

The scrip of the state-run oil refiner jumped 5.5% to Rs 268.80 on BSE. It hit a high of Rs 272.40 earlier. The stock rallied on high volumes of 7.3 lakh shares in less than an hour of trades.

BPCL's results boosted shares of other PSU refiners as well -  Indian Oil Corporation (IOC) (up 6.9% to Rs 353) and HPCL (up 4% to Rs 302.45).

BPCL has been on a sustained rise on the bourses recently, and the Q4 results have accentuated the surge . From Rs 191.70 on 30 January 2003, the stock has gained 40% within four months to the current Rs 268.80. The stock has also been boosted by a liberal final dividend of Rs 13 per share announced for FY 2002-03.

Contrary to market expectations of a fall in net profit, BPCL has pleasantly surprised the market with growth in Q4. It reported a 20% rise in Q4 net profit to Rs 447.40 crore compared to Rs 373.10 crore. This came in stark contrast to a huge fall of 71.5% to 78.5% in net profit to between Rs 80 crore and Rs 107 crore for MQ 2003 as against Rs 373.10 crore in MQ 2002 according to a capitalmarket.com poll.

Total income went up 35% to Rs 13,627.20 crore from Rs 10,089.30 crore in Q4. Analysts had forecast a growth of 13% to 27% in BPCL's net sales to between Rs 11,267 crore and Rs 12,645 crore for MQ 2003 as against sales of Rs 9,976.10 crore in MQ 2002.

For FY 2002-03, BPCL posted a 47% growth in net profit to Rs 1,250 crore compared to Rs 849.80 crore in the previous year. Total income climbed 21.8% to Rs 48,848.90 crore in FY 2002-03 from Rs 40,094.90 crore.

On a consolidated basis, net profit went up 66.6% in FY 2002-03 to Rs 1,551.40 crore (Rs 931 crore) on a 24% growth in total income to Rs 57,171.30 crore (Rs 46,081.10 crore).

The surge in refining margins has led to robust FY 2002-03 results. The gross refining margin (GRM) during the year was USD 3.71 per barrel (approx. Rs 1350 per MT) compared to USD 2.4 per (approx. Rs 858 per MT) barrel during the previous year.

The marketing margins of oil companies have also gone up following the dismantling of the adminstered price mechanism effective from 1 April 2003. The blended marketing margins on these products rose from an estimated Rs 400-500/ KL to Rs 800-1,000/ KL during the year. Oil companies set oil prices every fortnight depending on the trend in international crude prices.

BPCL has about 4,500 retail outlets and a 20% share in the petroleum products market. As per recent reports, BPCL plans to double its refining capacity to 2,40,000 bpd from the current 1,30,000 bpd by October 2004, and modify its refineries so that it can process different grades of oil. The total cost of the expansion and modernisation is estimated at Rs 1,831 crore, of which Rs 1,200 crore has already been spent.