| Demonstrated support from GoI and State government of Assam
BCPL is a joint venture between GAIL, OIL, NRL and GoA with GAIL holding 70.00%, OIL, NRL and GoA each holding 10.00% respectively. The company has strategic importance as it is formed under Assam Accord of 1985 to promote economic development in Assam. As per the arrangement with various shareholders, BCPL will get the raw material from OIL and NRL, the land from GoA and all the technical and operational support from GAIL. GAIL, the single largest shareholder with 70% stake in BCPL was incorporated in August 1984 as a central public sector undertaking (PSU) under the Ministry of Petroleum and Natural Gas (MoPNG). The company renewed its marketing agreement with GAIL in 2024, extending its validity until 2034. Under this arrangement, BCPL continues to leverage GAIL's established marketing channel for the sale of its products GAIL is responsible for evacuation of 100% BCPL polymer products and charges a marketing commission charge of 1.45% (Previously 2.4% of net sales). Acuite believes that the company is expected to continue to benefit from the promoters for sourcing of customers as well as assured suppliers over the medium term.
Steady scale of operation with improvement in margins:
BCPL reported revenue growth of 4.09% in FY26, with operating income increasing to Rs. 3,725.53 crore from Rs. 3,579.20 crore in FY25, primarily driven by improved product realizations. LLDPE/HDPE products contributed approximately 75% of total revenue during the year. However, operational performance in Q1FY27 remained subdued, with operating income declining to Rs. 622.19 crore, from Rs. 918.03 crore in Q1FY26. The decline was primarily attributable to lower production levels, with capacity utilization reducing to around 55% in Q1FY27 from 114% in Q1FY26, mainly due to the non-availability of Naphtha amid supply disruptions. Production was also impacted by a planned shutdown of around 20 days undertaken for ongoing project-related activities pertaining to the HPG-2 and Butene-1 projects. BCPL is setting up Butene-1 and HPG (2nd Stage) units at Dibrugarh with a total project cost of Rs.818 crore, funded through debt (69.93%) and internal accruals. As of March 2026, the project had achieved around 87% financial progress and 97.3% physical progress. Commissioning is expected by December 31, 2026, with stabilization by March 2027. The Butene-1 unit will cater to internal raw material requirements, while HPG-2 output will be sold externally; BCPL has already signed an MoM with NRL for offtake at a premium price. The projects are expected to increase revenue by 8-10% and improve EBITDA margins by 1-2% from FY28 onwards.
On the profitability, BCPL witnessed a significant improvement in FY26, with EBITDA margin increasing to 10.61% from 6.03% in FY25. The improvement was largely supported by lower raw material costs and a reduction in commission expenses, which declined to Rs. 53.96 crore in FY26 from Rs. 63.48 crore in FY25. Consequently, the company's PAT margin improved substantially to 3.16% in FY26 from 0.44% in FY25. Nevertheless, BCPL remains exposed to fluctuations in crude oil prices, as the prices of its key raw materials, Natural Gas and Naphtha, are linked to global crude oil movements, making raw material cost volatility a key monitorable going forward.
Healthy Financial Risk profile:
The financial risk of BCPL is marked by healthy net worth, low gearing and healthy coverage indicators. The net worth increased to Rs. 2918.65 crore in FY 26 as compared to Rs. 2783.75 crore in FY 25 driven by accretions to reserves. Gearing stood low at 0.41 times in FY 25 as compared to 0.43 times in FY 25. Debt protection metrics stood healthy with interest coverage and debt service coverage ratio stood at 13.56 times and 6.38 times in FY 26 as compared to 9.92 and 7.24 times in FY 25. TOL/TNW and Debt/EBITDA stood at 1.76 and 1.93 times in FY 26 as compared to 1.91 and 2.62 times in FY 25. Acuite believes financial risk profile will remain healthy in absence of any further large debt funded capex plan.
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| Intensive working capital cycle:
The working capital cycle remains intensive however improved to 193 days in FY 26 from 202 days in FY 25. Working capital cycle remain intensive mainly on account of high other assets, Other current increased to Rs, 1454.54 crore in FY 26 from Rs.1230.69 crore in FY 25 mainly driven by Receivable Against Subsidy stood at Rs. 1348.96 crore in FY 26 as compared to Rs. 1078.33 crore in FY 25. Inventory days improved to 51 days in FY 26 from 66 days in FY 25 mainly. in Finished goods and semi-finished goods avg inventory holding period is 15 to 20 days and in stores and spares avg inventory holding period is 80-90 days. The Company need to maintain high spares and parts mainly on account of supply chain disruptions caused by floods and adverse weather conditions. Debtor days stood at 1 days in FY 26 as compared to 4 days in FY 25 , debtors are mainly on advance basis. Creditor days also improved to 20 days in FY 26 from 25 days in FY 25. Acuite believes that working capital cycle will remain intensive in the medium term due to nature of their operation.
Exposure to volatile crude oil and polymer prices
Polymer prices are linked with crude oil price fluctuations with a higher degree of volatility in the recent past. This will be further aggravated with the petrochemical sector trying to navigate through uncertain and volatile times, facing uncertain crude oil prices which is driven by multiple factors . Further, the lower consumption and economic growth in other economies is resulting into higher dumping of polymers due to no restriction on polymer import as India is net importer of polymers. Acuité believes that the revenues and margins of BCPL will remain exposed to the fluctuations in petrochemical prices, the competitive landscape and demand for polymers as also the level of volatility in the feed stock prices and the import trends.
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