Bharat Petroleum Corporation vs Bajajfinsv Q1 FY24

BPCL reported a stellar Q1 FY24 with consolidated PAT of INR 10,644 crore, its highest ever, driven by record refinery throughput at 115% capacity utilization and strong marketing volume growth of ~8% YoY. Refinery GRM stood at $12.64/bbl, down sequentially due to weaker cracks, but Russian crude discounts provided a tailwind. Marketing margins improved as LPG under-recoveries were fully recouped. Management guided for INR 10,000 crore capex in FY24, with a larger INR 1.5 lakh crore five-year plan focused on petchem expansion at Bina (2.2 MTPA by 2028) and energy transition. A rights issue of INR 18,000 crore was approved to fund net-zero and energy security goals. Key risk: crude price volatility and potential narrowing of Russian crude discounts could pressure refining margins.

Guidance read

Capex target of INR 10,000 crore for FY24: Management expects to spend INR 10,000 crore in capital expenditure during FY24, with INR 1,464 crore spent in Q1. Add 1,000 new retail outlets in FY24: BPCL plans to add approximately 1,000 new retail outlets during FY24; 111 were added in Q1. Add 500 CNG stations by FY24 end: BPCL aims to add another 500 CNG stations at existing retail outlets by the end of FY24. Petchem complex at Bina by 2028: A large petrochemical complex with 2.2 MTPA capacity and refinery expansion to 11 MMTPA is planned, with commissioning by 2028.

Risk read

Key risks include Crude price volatility and Russian discount narrowing — Management noted that crude prices have risen to $82-83/bbl and Russian crude discounts have narrowed sequentially, which could pressure refining margins.; Payment issues for Russian crude above price cap — Management acknowledged that if Russian crude prices cross $60/bbl, payment issues may arise, though more banks are now willing to settle.; Delays in Mozambique LNG project — The Mozambique LNG project remains under force majeure; management expects work to restart in 1-2 quarters but cost overruns are likely.; Dividend payout sustainability amid large capex — Analyst questioned whether elevated capex plans (INR 1.5 lakh crore over 5 years) could impact dividend payouts; management reaffirmed 30% payout policy..

Promise ledger

Scorecard data is being built as historical quarters are processed.

Bajaj Finserv reported a strong Q1 FY24 with consolidated PAT up 48% YoY to INR 1,943 crore and total income up 47% to INR 23,280 crore. The general insurance arm (BAGIC) posted a combined ratio of 100.7% (vs 104.6% last year) driven by lower loss ratios in motor and commercial lines, while life insurance (BALIC) grew individual WRP by 15% despite a high base. Bajaj Finance continued its momentum with AUM growth of 32% and record low GNPA of 0.87%. Management highlighted strong distribution expansion in BAGIC and product mix normalization in BALIC post-Q1 tactical shifts. Key risks include intensifying competition in crop insurance due to EoM arbitrage and potential flood claims in Q2 from North Indian rains.

Guidance read

BALIC to maintain NBV growth in line with past trends: Management expects absolute NBV to grow at a similar pace as historical 24% rolling 12-month growth, with margins stabilizing around 15%. BAGIC to sustain motor growth for 1-2 years: Expansion in distribution and geographies is expected to sustain motor growth in the medium term, though market dynamics may affect it. BALIC product mix to normalize from Q2: After a tactical Q1 with higher ULIP share, PAR mix is expected to revert to December 2022 levels, with corrective actions already taken in July.

Risk read

Key risks include Intensifying competition in crop insurance — Private players are aggressively bidding for crop insurance to utilize EoM allowances, potentially compressing margins for BAGIC.; North Indian flood claims in Q2 — Heavy rainfall in North India may lead to elevated motor and property claims, though management expects material impact to be assessed only in Q2 call.; Health insurance loss ratio pressure — Retail health loss ratios remain elevated due to fraud and claims inflation; management is investing in analytics but improvement may take time..

Promise ledger

Scorecard data is being built as historical quarters are processed.