BHARAT PETROLEUM CORPORATION Ltd.

INTRODUCTION

Bharat Petroleum Corporation Limited refines crude oil and markets petroleum
products in India. The company operates through two segments, downstream
petroleum and exploration and production of hydrocarbons. It operates fuel
stations that sell petrol; diesel, automotive liquefied petroleum gas (LPG), and
compressed natural gas. The company has network of 13439 fuel stations with
8403 fully automated fuel stations. The company also provides Bharatgasfuels
to approximately 42 million homes. MAK lubricants such as automotive engine
oils, gear oils, transmission oils, specialty oils, and greases; and jet fuels and
aero lubricants to airline customers and aircraft operators, as well as operates oil
refineries in Mumbai, bina, numaligarh, kochi. The company has participating
interest in 26blocks in 5 countries; imports and exports of other petroleum
products and owns a network of 2241km of multiproduct pipeline and engages
in natural gas business. The company was formally known as Bharat Refineries
Limited and changed its name to Bharat Petroleum Corporation Limited in
august 1977. BPCL was incorporated in 1952 and is based in Mumbai, India.

VISION

To become an Indian MNC in the field of Fluid handling, Gas Compression,

Gas storage equipment, services & project management.

MISSION

To provide quality products and services to core sector industries with special
thrust on Oil and Natural Gas, Petrochemicals, Refineries, Nuclear and Thermal
Power plants, Fertilizers and Public Transport Services, complying with health
and safety requirements.
 SALE ANALYSIS

As we go through the graphs shown above the comparison is done in between 3

major oil and petroleum companies of India and key players in this industries
are, currently standing in the top is the reliance industries with more than 5.6
trillion dollar sales and second comes Indian oil corporation with 5.28 trillion
dollar sales and next comes BPCL where according to the very recent news it
crossed its 3 trillion whereas according to the graph its 2.98 trillion dollar in
sales. If we compare all 3 companies Reliance industries has better sales return
than any other companies.

Interpretation: As we can see the trend line the graph comes down drastically
in all cases around 2016 due to higher rate of oil supply from OPEC nation that
lead to reduction the rate of oil prices in the market. This was the case why all
the companies around the world were hit drastically. Later on as the crude oil
price around globe was down to make it stable OPEC made a treaty with the
countries and brought back the market two years later now as u can see all the
reliance has got higher percentage of advantage in sales recently due to the
contract between Reliance and Saudi Aramco.
 PROFITABILITY ANALYSIS

ROCE which means return on capital employed ROCE is expressed in terms of

percentage (%). If we see the data we find that only Reliance is more constant
when it comes to ROCE. They have a better ROCE in last 5 years as compared
If we look at the graph during end of 2014 the best performance can be seen in
BPCL than other two companies and later till 2015 a gradual decrease in
Reliance industries as well as ROCL but, BPCL experienced increase which
shows good company performance. After, 2016 till today BPCL has been
experiencing rapid decrease every year and Reliance industries on the contrary
increasing every year. In case of IOCL 2015 to 2018 increase but they got hit
last year which lead then tremendous decrease.
EPS stand for earning per share. EPS generally shows the company capability to
give maximum on one share. As much as the EPS is high, the investors get good
returns. BPCL has no constant EPS in the last 5 years. In 2014 its EPS was
17.03, whereas in the next year it rises on to Rs20.53. In the years it has
experienced pretty much increase in its share prices except last year where it fell
short from 45.80to 39.83 Whereas Reliance EPS increased constantly every
year but in case of IOCL earning per share in always lesser. According to above
chart Reliance has always had better returns than any other company.

Interpritation: If we have to do the profitability analysis we need two things

one is ROCE and EPS. In ROCE BPCL have increasing returns till 2016 and in
case of IOCL till 2018 after that there is constant dip in ROCE. Reliance has a
constant run in ROCE and also almost increases though it is very little but they
are maintaining study pace. When comes to EPS we can see that Reliance is the
best company to earn return on investments as they has yearly gradual growth
but same goes with BPCL but only dip experienced was in 2019 but in case of
IOCL the investors doesn’t seem to show much ineptest as they has very less
returns with that rapid changes in the earnings per share also is risky situation
for investors as possibility of losing money is much higher.

LIQUIDITY ANALYSIS
Current ratio is also known as liquidity ratio. Generally if a company have 1.33
liquidity ratios then it shows that company liquidity position is in good
condition. If we see the data of these companies for last 5 years, we get to know
that IOCL is doing far more better than rest two companies when we see the
graph where we calculate current ratio from last years it has been almost
maintaining liquidity of company in study pace. But in case of both BPCL as
well as Reliance they liquidity of the company is not maintained very well. As
the years have passed from 2015 it’s getting worse for both industries. But
liquidity crunch is experienced by all the companies in the present scenario but
IOCL is trying to come out of where as other two are in process.

When we see the net cash flow in the years from 2014 to 2019 the
cash flow of BPCL and IOCL was increased in 2015 because of worldwide
reduction in rate of crude oil but increase of Reliance it was reduced because as
they had their own refineries to extract oil their supply increased and by then all
the companies started to pay the cash flow they got. Reliance and Saudi
Aramco’s deal brought in very last money to reliance last year which they used
to pay off the depth owed to government and same in case of IOCL the
expansion of company made them come the lowest of the company’s history in
13 years of cash flow but since 2015 BPCL is maintaining constant cash flow
which shows loyal relationships with investors.

Interpretation:

Current ratio we get to know about the company liquidity position

in the market.

Current Ratio = Current Assets / Current Liability

To evaluate liquidity of the company we need both cash flow as well as

current ratio of the company when we see the company’s current ratio then we
can see that IOCL has done better than other two companies even though all 3
companies are experiencing liquidity crunch. But AS we can see all the
companies are trying to come out of it better is IOCL next BPCL but reliance
only in case is lagging behind. But this also says about how the company is
performing in other sectors like amount of cash that is coming in and going out
for that we need to look at the cash flow.

Cash flow shows us the amount of cash that comes in and goes out
in case of BPCL it has got too much of inflow or outflow which is why its
almost maintaining similar kind of pace. In Case of IOCL their company
expansion made them to borrow which is why they got huge amount of cash
inflow around 2015 and due to expansion expenses they have reduced the cash
inflow drastically over the years. But in case of Reliance the around last year
they sold some of their petroleum products for which they got huge amount
which is why they cash inflow increase around 2018 and then sudden decrease
because company had to pay it to the government as they borrowed large
amount of loan about 6000crores in which they almost paid half of it at a time.
 CONCLUSSION

When we compare all the graphs we can see that Reliance industries is the
market leader in current scenario, next to that is IOCL which is also came to
that place because of their expansion strategy is past few years and then comes
the BPCL which is maintaining their position in the market as one of the leaders
in the petroleum industry in India. When we compared EPS and ROCE the
company has done pretty well in those segments to keep their investors happy.
But in case of sales and cash inflow Reliance is done tremendously well job.
BPCL has to do well in their sales as well as cash inflow which means they
need to come up with better advertisement and marketing strategy to increase
their net sales. As well as that company need to expand little more into the
market to become ambassadors of petroleum industries in India. Even though in
profitability we can see BPCL is higher amongst others but on its own year to
year decrement they need to work on to maintain better pace.

-CHETHAN S N

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