B P C L Q2 FY27 Results (NSE: BPCL)
Signal: Margin pressure
The read
The quarter shows a sequential operating recovery but a YoY earnings setback: operating margin rebounded to 3.94% from -4.11% in Q1FY27, yet remained 215bps below 6.09% a year earlier and PAT fell 22.5% to ₹4,993.17 crore because suppressed marketing margins outweighed higher throughput and refining margins.
| Metric | Value | YoY | QoQ |
|---|---|---|---|
| Revenue | ₹1,57,778.58 Cr | +29.8% | -1.1% |
| Net profit | ₹4,993.17 Cr | -22.5% | |
| EPS | ₹11.69 | -22.5% | |
| EBIT margin | 3.94% |
P&L walk
Revenue rose 29.8% YoY on higher physical throughput and market sales, but PAT fell 22.5% as management cited suppressed marketing margins; the 3.94% operating margin recovered sequentially from -4.11% but remained 215bps below the year-ago quarter.
Key positives
- Refinery throughput increased 6.0% YoY to 10.41 MMT, while domestic market sales rose 6.3% to 13.47 MMT.
- Operating margin recovered to 3.94% from -4.11% QoQ, and the company reported a sequential return to ₹4,993.17 crore PAT from a ₹3,962.13 crore loss.
- Export sales increased 63.9% YoY to 0.59 MMT, although they remain small relative to domestic sales.
Key concerns
- PAT fell 22.5% YoY to ₹4,993.17 crore despite 29.8% revenue growth, with management attributing the lower profit to suppressed marketing margins.
- Operating margin declined 215bps YoY to 3.94%, showing that higher physical volumes did not translate into comparable earnings growth.
- Operating cash flow was negative at ₹3,284.54 crore in H1FY27 versus ₹20,478.27 crore positive in H1FY26, with inventory and receivables absorbing cash.
- Cost of materials consumed increased to 47.5% of revenue from 42.8% YoY; the filing does not disclose the precise driver.
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