Bajajfinsv vs TATA CONSUMER PRODUCTS Q3 FY25

Bajaj Finserv reported a mixed Q3 FY25. Consolidated revenue grew 10% YoY to INR 32,042 crore, while PAT rose 3% to INR 2,231 crore. Excluding unrealized MTM, core PAT grew 23%. BAGIC delivered strong performance with 39% PAT growth and a combined ratio of 101.1%, though top-line growth was distorted by regulatory changes. BALIC saw muted individual-rated new business growth due to product mix recalibration and new surrender regulations, but retail protection surged 96% YoY. Bajaj Finance posted a healthy quarter with 26% net income growth and ROE of 19.08%. Management emphasized a shift toward profitable growth, particularly in life insurance, with VNB growth prioritized over top-line. Key risks include prolonged disruption from surrender regulation adjustments and competitive pressure in health insurance. The Allianz JV exit discussions remain preliminary.

Guidance read

BALIC VNB growth to outpace top-line growth: Management expects VNB to grow faster than top-line due to product structure changes and focus on profitability. BAGIC to maintain combined ratio better than market: Continued focus on profitable growth with combined ratio superior to industry average. BFL to reduce loan losses next year: Management committed to bringing down loan losses in the coming year.

Risk read

Key risks include Surrender regulation disruption in life insurance — New surrender value guidelines have impacted product mix and distribution, with agency channel taking longer to adjust.; Health insurance pricing and commission pressures — IRDAI capping senior citizen premium hikes and EOM limits may pressure margins, though Bajaj is well-positioned.; Allianz JV exit uncertainty — Allianz's intention to exit the JV is at preliminary stage; no details provided, creating strategic uncertainty..

Promise ledger

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

Tata Consumer Products reported a strong Q3 FY25 with consolidated revenue growth of 17% YoY to INR 4,444 crore, driven by broad-based volume growth of 7% in India Beverages and robust performance in Foods (31% total, 11% organic). However, consolidated EBITDA was flat YoY due to significant margin pressure in the India Tea business, where input costs rose 25-30% while only 40% was passed through via pricing. Management expects Q3 to be the peak of margin pressure, with gradual easing as price hikes flow through and new tea crop arrives in Q1 FY26. International and non-branded businesses delivered strong margin expansion. The company is prioritizing long-term competitiveness in tea, focusing on volume growth and market share gains. Risks include sustained high tea/coffee prices, competitive intensity in RTD, and slower-than-expected ramp-up of Capital Foods and Organic India.

Guidance read

Tea margin pressure to ease from Q4 FY25: Management expects Q3 to be the peak of tea margin pressure, with gradual improvement as price hikes flow through and new crop arrives in Q1 FY26. Capital Foods and Organic India acceleration in Q4: After stabilization, focus shifts to accelerating growth with innovation and expansion into food services and pharma channels, expecting a substantial jump in Q4. Growth businesses to contribute 30% of portfolio: Target for growth businesses (Sampann, Soulfull, etc.) to grow at 30% and contribute 30% of portfolio; currently at 27% contribution with 89% growth. Pharma channel expansion for Organic India: Piloted in 10 cities, pharma channel to expand to 40 cities next year, driving significant uplift for Organic India.

Risk read

Key risks include Sustained high tea prices — Tea input costs remain elevated with only 40% passed through; if prices don't ease or further hikes aren't taken, margins could remain under pressure for two more quarters.; Coffee price volatility impacting non-branded demand — Coffee prices at 50-year highs; management is cautious on inventory and notes potential demand destruction if prices persist.; Competitive intensity in RTD business — Analyst raised concern about new entrants and pricing aggression; management acknowledged matching deeper retail margins, impacting revenue growth.; Urban slowdown impact on premium portfolio — Analyst questioned volume growth in Salt and Sampann given urban slowdown; management noted urban growth is low single digits excluding modern trade and e-commerce..

Promise ledger

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