BPCL Shares Rise on Solar Project Win & East Coast Refinery Plan

Bharat Petroleum Corporation Limited (BPCL) witnessed a rise in its share price during early trading on December 26, following its selection as the lowest bidder for a 150 MW solar photovoltaic (PV) power project tendered by NTPC.

Invest in Indian Markets and Unlock Future Potential With 5paisa!

Open Account Now

At 9:22 AM IST, BPCL's shares were trading at ₹296.10 on the BSE, reflecting an increase of ₹4.25 or 1.46%.

Upon securing the contract, the project is set to be executed over two years, with an estimated investment of ₹756.45 crore. It is expected to generate annual revenue of approximately ₹100 crore by producing around 400 million units of renewable energy.

BPCL had participated in NTPC’s tender for the development of 1,200 MW ISTS-connected solar PV power projects across various locations in India.

In a separate update, BPCL’s board, during its December 24 meeting, approved initiating preliminary activities for establishing a greenfield refinery and petrochemical complex on the East Coast of Andhra Pradesh. The project, estimated to cost ₹6,100 crore, will include activities such as feasibility studies, land acquisition, environmental assessments, and engineering designs.

Earlier this month, BPCL and Coal India signed a non-binding Memorandum of Understanding (MoU) in Mumbai to explore the development of a coal-to-synthetic natural gas project at Western Coalfields Limited (WCL) using surface coal gasification technology.

For the second quarter of FY 2024-25, BPCL reported a consolidated net profit of ₹2,297 crore, marking a 72% decline from ₹8,243 crore in the same quarter of the previous year. The decrease was attributed to lower refining margins and reduced cracks.

Over the past year, BPCL’s share price has climbed by about 30%, significantly outperforming the Nifty 50 index, which registered a 13% increase during the same period.

The 150 MW solar PV power project, where BPCL emerged as the lowest bidder, is part of NTPC's larger initiative to establish 1,200 MW of ISTS-connected solar projects across the country. These projects are crucial to meeting India’s ambitious renewable energy targets and reducing its reliance on fossil fuels. The solar plant, once operational, will contribute significantly to BPCL’s renewable energy portfolio, aligning with its vision of achieving net-zero emissions by 2040.

BPCL’s investment in greenfield refinery and petrochemical projects is equally noteworthy. The proposed complex on the East Coast of Andhra Pradesh will enhance India’s refining capacity while incorporating advanced technologies to ensure efficiency and environmental compliance.

The memorandum with Coal India further exemplifies BPCL’s diversification strategy. Exploring coal-to-synthetic natural gas technology positions the company as a key player in transitioning from traditional coal usage to cleaner energy alternatives. Such innovations aim to optimize the use of India’s coal reserves while mitigating environmental impacts.

Despite challenges such as declining net profits in Q2 FY 2024-25 due to lower refining margins and crack spreads, BPCL has demonstrated resilience. Its share price performance over the past year, outpacing the benchmark Nifty 50 index, reflects investor confidence in its long-term growth and diversification strategy.

As BPCL continues to navigate the evolving energy landscape, its initiatives reinforce its role as a forward-thinking energy company committed to balancing profitability, sustainability, and innovation.