Bajajfinsv vs TATA CONSUMER PRODUCTS Q3 FY24

Bajaj Finserv reported a strong Q3 FY24 with consolidated total income up 34% to INR 29,038 crore and PAT up 21% to INR 2,158 crore. Growth was driven by robust performance across subsidiaries: Bajaj Finance (AUM +35%, PAT +22%), Bajaj Allianz General Insurance (GDPI +18.7% despite Nat Cat impact), and Bajaj Allianz Life Insurance (IRNB +24%, NBV +19%). The company announced the acquisition of Vidal Healthcare for INR 325 crore to strengthen its healthcare payment ecosystem. Management expressed confidence in sustained growth, citing favorable macro conditions and strategic investments. Key risks include potential regulatory changes on life insurance surrender norms and competitive pressure in motor insurance.

Guidance read

Bajaj Allianz Life to maintain market-leading growth: Management expects continued strong growth in IRNB, with focus on product mix and channel diversification. Bajaj Allianz General to sustain above-industry growth: The company aims to grow faster than the industry in profitable segments, leveraging distribution expansion. Bajaj Finserv Health to scale via Vidal acquisition: The acquisition of Vidal Healthcare will accelerate Finserv Health's position in the healthcare payment spectrum. Bajaj Finance to resume digital card issuance soon: Deficiencies pointed out by RBI have been mostly cleared; disbursements expected to resume after regulatory approval.

Risk read

Key risks include Regulatory risk on life insurance surrender norms — Proposed IRDAI changes to surrender values could impact product profitability and persistency.; Intense competition in motor insurance — Motor insurance growth slowed to 5% due to competitive pricing and conservative underwriting stance.; Dependence on bank insurance partners — Banks may prioritize deposits over third-party products, pressuring bancassurance growth.; Natural catastrophe claims impact — Frequent Nat Cat events increased combined ratio to 102.9% in Q3; core profitability remains strong..

Promise ledger

Of 3 tracked promises, management 0 met, 0 close, 3 missed.

Tata Consumer Products delivered a strong Q3 FY24 with consolidated revenue growth of 9% and EBITDA expansion of 190 bps. India beverages saw tea volume growth of 2% (fourth consecutive quarter of positive volume), while India foods grew 5% volume and 13% revenue. Growth businesses (Sampann, NourishCo, Soulfull, Yumside) surged 42%, now contributing 17% of India business. International business recorded 11% revenue growth with EBIT up 23%. The company closed the Capital Foods acquisition and expects to close Organic India within 45-60 days, targeting integration within 100 days. Management guided for NourishCo to reach INR 900-1,000 crore for FY24 and aims to grow the contribution of growth businesses to 30% with 30% growth post-acquisitions. Risks include U.S. coffee category softness and volatility in coffee prices, which could pressure international margins.

Guidance read

NourishCo to achieve INR 900-1,000 crore revenue in FY24: Management remains confident of delivering INR 900-1,000 crore for NourishCo in FY24, despite Q3 being seasonally weak. Growth businesses contribution to reach 30% growing at 30%: With the addition of Capital Foods and Organic India, management targets growth businesses to contribute 30% of India business, growing at 30%. Integration of Capital Foods and Organic India within 100 days: Capital Foods front-end integration substantially complete; Organic India expected to close in 45-60 days, with full integration within 100 days. International margins to be accretive to India business: Management expects international business margins to improve and become accretive to overall margins, with U.S. showing progress in 6-12 months.

Risk read

Key risks include U.S. coffee category softness and price volatility — The U.S. coffee category is under demand pressure, and coffee prices remain volatile, impacting the branded coffee business.; Portfolio complexity from multiple brands — Analyst raised concern about overlapping brands (e.g., Sonnets vs Sampann, Himalayan vs Sonnets honey) potentially causing confusion and bandwidth drag.; Integration risks from recent acquisitions — While integration is progressing, there could be hiccups in distributor transition and inventory cleanup for Capital Foods and Organic India..

Promise ledger

Of 2 tracked promises, management 0 met, 0 close, 2 missed.