Categories Analysis, Energy, Research Summary

The Mine of Indian Petroleum Industry Ft Bharat Petroleum Corporation Limited

The disruptions in the global energy supply chain and the soaring oil prices have brought the issue of supply security to the fore – not just for your company but for the country as well. The Company will continue its focus and efforts on the upstream Oil & Gas projects, particularly to enable earliest monetization of the discoveries made in Mozambique and Brazil. The initial 2-Train LNG Project in Area 1, Mozambique which is the first step towards unlocking the world-class gas resources of approximately 63 Trillion Cubic Feet in which BPCL holds 10% stake, is poised to resume operations in the latter part of 2023. We are confident that this will propel us to new heights on the energy frontier.

Krishnakumar Gopalan, Managing Director

Stock data

ExchangeBSE and NSE
Price Performance:
Last 5 days+0.27%
Last 1 year+2.61%

Company description:

Bharat Petroleum Corporation Limited (BPCL) is a leading Indian state-controlled oil and gas company. It is part of the Maharatna group of companies owned by the Government of India. BPCL is engaged in various aspects of the petroleum industry, including refining, marketing, distribution, and exploration of hydrocarbons. The company is known for its extensive network of retail outlets and a strong presence in the downstream petroleum sector.

Business Segments:

1. Refining:

BPCL owns and operates refineries in various locations in India, including Mumbai and Kochi. These refineries have a combined crude oil processing capacity. The refining segment is a core part of BPCL’s operations, where crude oil is processed into various petroleum products, including petrol, diesel, and petrochemical feedstocks.

2. Marketing and Distribution:

BPCL has an extensive marketing and distribution network, with a significant presence in the retail market. It operates under the brand name “Bharat Petroleum” and offers a wide range of petroleum products through its retail outlets. The marketing and distribution segment is crucial for BPCL’s revenue generation, as it serves both retail and industrial customers.

3. Exploration and Production:

BPCL is involved in the exploration and production of hydrocarbons, including crude oil and natural gas. It has interests in various oil and gas blocks. While the company’s primary focus is downstream activities, its exploration and production activities contribute to its energy portfolio. BPRL has Participating Interest (PI) in 18 blocks, of which nine are in India and nine overseas, along with equity stake in two Russian entities holding the license to four producing blocks in Russia. The blocks of BPRL are in various stages of exploration, appraisal, development and production. The total acreage held by BPRL and its subsidiaries is around 22,000 sq. km, of which approximately 49% is offshore.


BPCL, on a consolidated basis, intends to spend around ₹10,000 crore in FY23, of which it will spend around ₹2,100 crore on refinery and on the Petchem project in Kerala, ₹5,200 crore on marketing, ₹800 crore on CGD/GAS, ₹1,400 crore on upstream and ₹500 crore on other projects (including pipeline). 

Revenue Breakup FY22:

High speed diesel (HSD) accounts for ~52% of revenues, followed by  Motor spirit (23.4%) and Liquefied Petroleum Gas (11.3%).

Presence Across Value Chain:

  1. Retail (Petroleum):

The company owns 82 retail depots and operates ~20,000 retail outlets across India. Presently, it has a market share of ~26% in the domestic petroleum market.

  1. LPG: 

The company owns and operates 54 LPG bottling plants and serves over 6,200 distributors of LPG in India. It has a base of ~9 crore customers with a market share of 27%.

  1. Industrial/ Commercial:

The company serves 8,000+ customers and provides them with a reliable supply of industrial and commercial petroleum products.

  1. Aviation: 

The company has 56 aviation service stations across airports in India and has a 21% market share in ATF (Aviation Turbine Fuel) in the domestic market.

  1. Lubricants:

The company sells more than 400 grades of lubricant products through its own brand MAK Lubricants. It has a market share of ~25% through a base of over 18,000 customers.

  1. Gas:

The company has a customer base of 55+ major LNG customers. The company undertakes this business through its wholly owned subsidiary Bharat Gas Resources Ltd which has business interest in 50 GAs (geographical areas).

Listed Joint Ventures:

  1. Petronet LNG Limited:

The company was formed in 1998 for importing LNG and setting up a LNG terminal with facilities like jetty, storage, regasification etc. to supply natural gas to various industries in the country. It was promoted by 4 public sector companies viz. BPCL, IOCL, ONGC and GAIL which owns 12.5% each in the company. BPCL’s equity investment in PLL currently stands at ~₹ 100 crore. 

  1. Indraprastha Gas Limited:

It is a leading CGD (city gas distribution) company in India, supplying natural gas to transport, domestic, commercial and industrial consumers. The operations of IGL spread over NCT of Delhi, Noida & Greater Noida, Ghaziabad & Hapur, Gurugram, Meerut, Shamli, Muzaffarnagar, Karnal and Rewari. It is a JV with Gail India wherein the company holds 22.5% stake.


On June 22, 2022, MCA approved the amalgamation of Bharat Oman Refineries Ltd. with BPCL. The Order has been filed with ROC and BORL stands merged with BPCL effective July 1, 2022. BGRL, a wholly owned subsidiary of BPCL, was incorporated for handling Natural Gas business. In March 2021, the Board of Directors approved the amalgamation of BGRL with BPCL. Thereafter, the companies filed a petition with the MCA for amalgamation. The process is in an advanced stage now.

Privatization of the Company:

The Government of India vide its letter dated June 3, 2022 has advised to call off the present process for strategic disinvestment of BPCL and accordingly, all the activities in connection with the disinvestment have been discontinued. 

Sale of stake in Numaligarh Facility:

In 2021, The company sold its entire ~61.6% stake in Numaligarh Refinery Ltd for Rs. 9,876 crores. It operates a 3 MMTPA refinery in the state of Assam. Buyers include Oil India Ltd, Engineers India Ltd, and the Govt. of Assam.


What we like:  

  1. Efficiency and sustainability remain key goals:

BPCL has initiated trials of ethanol-diesel blend to reduce emissions. This falls in line with the company’s target of net-zero emissions by 2040. On the sustainability front, it currently has 85 electric vehicle (EV) charging stations, and aims to set up 250 EV stations by FY24-end. It has also tied up with Ather Energy for setting up an energy infrastructure network for the latter. BPCL also plans to roll out new energy-efficient piped natural gas burners with 70% efficiency, compared with 55% earlier.

  1. Decline in crude oil price aid auto fuel margins:

With crude oil prices correcting, the gross marketing margins on petrol and diesel have improved from Q4FY23, allowing the oil marketing companies (OMCs) to recover losses made in the marketing segment in H1FY23. Given the current trend, we believe the OMCs shall most likely be allowed to recover the losses incurred on the sale of petrol and diesel before any cuts in retail selling prices of petrol and diesel are implemented. Therefore, for BPCL, we factor in blended (for all petroleum products) gross marketing margins of INR 4.4/4.7 per litre for FY24/25E. Every INR 0.5/litre change in gross marketing margin impacts BPCL’s FY24/25E EPS by 22.4/21.7% or INR 10.5/11.2 per share

  1. Strong Retail Network:

BPCL boasts an extensive retail network under the brand name “Bharat Petroleum.” This vast network of retail outlets allows the company to reach a broad consumer base across India, contributing significantly to its revenue.

  1. Robust market positions:

BPCL holds a prominent position in the Indian oil and gas sector, making it a trusted brand. Its market leadership in various product categories, such as petrol and diesel, is advantageous for long-term investors.

  1. Government backing plays a huge role:

BPCL is a government-owned enterprise, providing a sense of security to investors. Government backing can be seen as a signal of stability, reducing the risk associated with economic downturns or market volatility.

Factors to consider:

  1. The oil and gas industry is highly regulated by governments, and changes in regulations can impact BPCL’s operations and profitability. Regulatory shifts may include pricing controls, taxation policies, and environmental standards.
  1. BPCL’s profitability is closely tied to crude oil prices. Fluctuations in global crude oil prices can affect the company’s margins, as it may not always be able to pass on price increases to consumers.
  1. As an international player, BPCL is exposed to geopolitical risks. These risks include changes in international relations, sanctions on oil-producing nations, and disruptions in the supply chain due to geopolitical conflicts.


Bharat Petroleum Corporation Limited (BPCL) is a multifaceted player in the Indian oil and gas industry, offering investors several advantages and challenges to consider. With government backing, a diversified business model, and a strong retail presence, BPCL presents compelling reasons for investment. Its global footprint and exploration activities also offer growth opportunities.

However, the company operates in a highly regulated environment, faces fierce competition, and is vulnerable to price fluctuations in the global crude oil market. Environmental concerns, geopolitical risks, and currency exchange exposure further add to the complexities of investing in BPCL.

Investors should carefully evaluate their risk tolerance and investment objectives when considering BPCL. Conducting thorough research, staying updated on industry trends, and monitoring the company’s performance in a dynamic market are essential for making informed investment decisions.

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