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MarketScreener Homepage  >  Equities  >  NATIONAL STOCK EXCHANGE OF INDIA  >  Bharat Petroleum Corporation Limited    BPCL   INE029A01011

BHARAT PETROLEUM CORPORATION LIMITED

(BPCL)
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End-of-day quote. End-of-day quote NATIONAL STOCK EXCHANGE OF INDIA - 01/29
479.05 INR   -0.40%
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Explainer: Why India's diesel demand is contracting, and what it means

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12/04/2019 | 02:39am EST
FILE PHOTO: A worker fills diesel in a car as he holds 500 Indian rupee banknotes at a fuel station in Kolkata

India's demand for diesel is slowing as the country's car fleet shifts predominantly to gasoline, trucks get more efficient and solar pumps displace diesel-fed units across the countryside.

The combination of these changes has led analysts, academics and company officials to speculate that diesel demand growth in the world's third-largest crude oil consumer may have peaked, with significant repercussions for the firms that produce and sell the fuel.

WHY HAS DIESEL DEMAND FALLEN?

In addition to the longer term trends mentioned above, 2019 diesel demand was also curtailed by a prolonged monsoon which brought rural demand to a near standstill this autumn.

Widespread flooding hampered mining, construction and freight movement across parts of the country.

Slowing factory output also stymied diesel demand.

India's industrial output fell at the fastest pace in more than six years in September, while power demand in October posted its steepest decline in over 12 years.

India Petrol and Diesel Prices: https://fingfx.thomsonreuters.com/gfx/mkt/12/8880/8794/Pasted%20Image.jpg

New legislation that has allowed truckers to carry 10-15% higher loads has also reduced the number of trips they need to make.

WHO ARE THE MAJOR DIESEL CONSUMERS?

India consumed 83.5 million tonnes of diesel in the 2018/19 fiscal year, according to Ministry of Petroleum and Natural Gas data.

Most of it was produced and sold by Indian state refiners - Indian Oil Corp Ltd, Bharat Petroleum Corp Ltd, Hindustan Petroleum Corp Ltd and Mangalore Refinery and Petrochemicals Ltd.

Private refiners Reliance Industries Ltd and Nayara Energy Ltd also produce diesel, but most of that is exported.

India's diesel demand growth taps the brakes: https://fingfx.thomsonreuters.com/gfx/ce/7/5350/5336/IndiaDieselGasoline.png

A breakdown of diesel fuel usage by industry for 2018/19 is not available. But a government website showed that transportation accounted for about 86% of total use in 2017/18.

Fuel retailers also sell around about 7% to state road transport companies, shipping lines and railways.

The remainder is divided among the mining and quarrying, manufacturing, power generation and agriculture sectors.

India Diesel Demand Mix : https://fingfx.thomsonreuters.com/gfx/mkt/12/8878/8792/Pasted%20Image.jpg

WHAT ARE REFINERS DOING ABOUT THE DEMAND SLOWDOWN?

Diesel accounts for 40% of total refined fuel production in India, so refiners are taking steps to counter the impact of stagnating demand for their highest-volume product.

To start with, they are stepping up exports, which are expected to rise by up to 8 million tonnes in the 2019-20 fiscal year, according to company officials.

The three state-owned firms are also looking into converting some diesel capacity to petrochemicals, although in the near term that is expected to absorb only about 2% of the diesel excess, senior executives from two state-owned oil firms said.

(Editing by Jacqueline Wong)

By Promit Mukherjee

Stocks mentioned in the article
ChangeLast1st jan.
BHARAT PETROLEUM CORPORATION LIMITED 2.82% 479.05 End-of-day quote.-2.16%
HINDUSTAN PETROLEUM CORPORATION LIMITED 1.38% 245.7 End-of-day quote.-8.37%
INDIAN OIL CORPORATION LIMITED 0.38% 118.3 End-of-day quote.-6.09%
MANGALORE REFINERY & PETROCHEMICALS LTD -3.55% 46.25 End-of-day quote.5.96%
RELIANCE INDUSTRIES 0.55% 1479.85 End-of-day quote.-2.79%
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Financials (INR)
Sales 2020 2 961 B
EBIT 2020 99 621 M
Net income 2020 77 484 M
Debt 2020 427 B
Yield 2020 3,11%
P/E ratio 2020 13,3x
P/E ratio 2021 10,7x
EV / Sales2020 0,50x
EV / Sales2021 0,48x
Capitalization 1 043 B
Chart BHARAT PETROLEUM CORPORATION LIMITED
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Technical analysis trends BHARAT PETROLEUM CORPORATI
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Income Statement Evolution
Consensus
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Mean consensus HOLD
Number of Analysts 34
Average target price 510,33  INR
Last Close Price 480,95  INR
Spread / Highest target 44,5%
Spread / Average Target 6,11%
Spread / Lowest Target -33,5%
EPS Revisions
Managers
NameTitle
Rajkumar Duraiswamy Chairman & Managing Director
Neelakantapillai Vijayagopal Finance Director & Executive Director
R. Narayanan Executive Director-Information Systems
Ramamoorthy Ramachandran Director & Refineries Director
Vishal Vinod Sharma Independent Non-Executive Director
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