Chennai Petro Q2FY23 PAT falls sharply to Rs17 crore as lower gross refining margins (GRM) hits profit margins

26 Oct 2022 , 10:46 AM

Chennai Petroleum reported 120% growth in total revenues for the September 2022 quarter on consolidated basis at Rs19,509cr.

Revenue fall was -15.77% in sequential terms. Revenues for the quarter were hit by the levy of duties on export of petroleum products, which resulted in lower revenues.

However, despite lower profits, the fall in the debt equity ratio resulted in a sharp improvement in the debt service coverage ratio in H1 from 2.60X to 6.37X yoy.

Interest coverage also improved from 6.69X to 26.41X. Average operating margins for the first half were higher at 7.86% compared to 2.10% in the H1 of previous fiscal year.

Consolidated Profit after tax (PAT) for September 2022 quarter was down -72.3% at Rs17cr and it plummeted sharply on sequential basis.

The sharp fall in the gross refining margins (GRM) combined with the impact on profits of the special additional export duty on oil, resulted in a fall in the net profits by the company.

The debtor turnover days and inventory turnover have reduced, showing strain on working capital. Net profit margins at 0.09% in Q2FY23 is lower compared to 0.69% in Q1FY22 and against 10.18% in Q1FY23.

Financial highlights for Sep-22 compared yoy and sequentially

	Chennai Petroleum
Rs in Crore	Sep-22	Sep-21	YOY	Jun-22	QOQ
Total Income (Rs cr)	₹ 19,509	₹ 8,856	120.29%	₹ 23,163	-15.77%
Net Profit (Rs cr)	₹ 17	₹ 61	-72.27%	₹ 2,358	-99.28%
Diluted EPS (Rs)	₹ 1.14	₹ 4.10		₹ 158.32
Net Margins	0.09%	0.69%		10.18%