Shares of this refinery company under the ‘large-cap’ category are in focus after the company’s Board of Directors approved the setting up of a Polypropylene unit at Kochi. In the past month, the company’s stock delivered nearly 12 percent returns to its stakeholders.
With a market capitalization of Rs 95,208.50 crores, the stocks of Bharat Petroleum Corporation Limited (BPCL) started their trading session on Wednesday at Rs 453.95 and currently trade at Rs 438.65. The scrip witnessed an intra-day high of Rs 455.25 indicating a gain of around 1.50 percent compared to the previous close of Rs 449.20 apiece.
In a recent filing with the Bombay Stock Exchange (BSE), the Board of Directors of BPCL, at its meeting held on 19th December 2023, approved the proposal of setting up a Polypropylene (PP) unit at its refinery in Kochi.
The projected cost, on a gross basis, is expected to be Rs 5,044 crores. With no current production at the mentioned plant, the project is expected to add a proposed capacity addition of Polypropylene of around 400 Kilo-Tonnes Per Annum (KTPA).
The proposed capacity is expected to be added within 46 months from the date of investment approval. The abovementioned additions are a part of supporting the robust growth in the petrochemical segment in India and the availability of Propylene feedstock.
The same provides BPCL Kochi Refinery with immense opportunities for the production of Polypropylene, having wide applications in downstream industries such as packaging films, sheets, containers, etc.
During the recent financial quarters, the company’s basic business indicators such as operating revenues and after-tax profits portrayed a dip in numbers with the former reducing from Rs 1.28 lakh crores during Q1FY23-24 to Rs 1.17 lakh crores during Q2FY23-24, and, the latter slipping from Rs 10,167.67 crores to Rs 7,943.48 crores.
As per the recent presentations, the PSU company projects a capital expenditure (capex) of Rs 10,000 crores for the full financial year, out of which the company has already achieved a capex of around Rs 5,200 crores.
The company does not plan to apply the funds towards the expansion of refinery capacities but to bridge the gap between refining capacity and market requirements.
Bharat Petroleum Corporation Limited (BPCL) operates with the help of a wide range of refineries in India and also markets and distributes petroleum by-products. The PSU company’s operations are divided into business segments comprising downstream petroleum and production of hydrocarbons.
Written by Amit Madnani
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