Bharat Petroleum Corporation vs Bajajfinsv Q1 FY25

BPCL reported Q1 FY25 revenue of INR 128,103 crore and PAT of INR 3,015 crore, despite absorbing ~INR 2,300 crore in LPG under-recoveries. Normalized PAT (excluding LPG losses and inventory gains) was ~INR 4,600 crore. Refinery throughput hit 10.11 MMTPA (160% of nameplate) with GRM of $7.86/bbl, supported by 39% Russian crude processing. Marketing volumes grew 3.2% YoY, with aviation fuel up 15% and market share at 26.9% among PSUs. Management guided for FY25 capex of INR 16,400 crore, targeting 23,000 retail outlets and 300+ CNG stations. The Bina petrochemical project (INR 49,000 crore) is on track for FY28-29 commissioning. Risks include potential sustained LPG under-recoveries without government compensation and project cost escalation at Mozambique LNG.

Guidance read

FY25 Capex of INR 16,400 crore: Management guided for total capex of INR 16,400 crore in FY25, with INR 2,438 crore spent in Q1. Retail network to reach 23,000 outlets by year-end: BPCL plans to expand its retail outlet network to 23,000 by end of FY25, adding ~1,300 outlets during the year. Bina petrochemical project commissioning by FY28-29: The integrated refinery and petrochemical expansion at Bina (INR 49,000 crore) is targeted for commissioning in FY28-29. Ethanol blending target of 15% in current quarter: BPCL aims to achieve 15% ethanol blending in the current quarter, up from 14.13% in Q1.

Risk read

Key risks include LPG under-recovery without compensation — BPCL incurred ~INR 2,300 crore in LPG losses in Q1, with no government compensation mechanism announced. Monthly losses could be ~INR 600 crore at current Saudi CP prices.; Mozambique LNG project cost escalation — The Mozambique LNG project (force majeure) may see cost escalation from $15.5B to ~$19.5-20B, impacting IRR. Management confirmed the project remains commercially viable but with lower returns.; Market share pressure from private players — BPCL's overall marketing volume growth of 3.2% lagged industry growth of 5.5%, partly due to private players regaining share as pricing normalized. Diesel volumes saw degrowth.; Refinery turnaround impact on throughput — Planned turnarounds at Kochi (45 days) and Bina (15 days) in H2 FY25 could temporarily reduce throughput and GRM..

Promise ledger

Of 1 tracked promise, management 0 met, 0 close, 1 missed.

Bajaj Finserv reported a mixed Q1 FY25. Consolidated PAT grew 10% YoY to INR 2,138 crore, but excluding one-offs, growth was 8%. Revenue rose 35% to INR 31,480 crore. BAGIC posted strong GWP growth of 24% to INR 4,761 crore, though combined ratio worsened to 103.7% due to large commercial claims. BALIC's individual rated new business grew 26%, but PAT fell 37% due to new business strain. Bajaj Finance resumed eCom and Insta EMI card issuance post-RBI embargo. Emerging businesses' losses widened to INR 119 crore. Management highlighted margin pressure from regulatory changes and elevated loan losses, but expects improvement in H2. Key risk: elevated credit costs and collection efficiency in BFL's rural portfolio.

Guidance read

BAGIC expects combined ratio to normalize in subsequent quarters: Management indicated that large commercial claims in Q1 are one-offs and not expected to recur, with combined ratio likely improving. BALIC margins may see a pause in expansion this year due to surrender regulations: New surrender value norms could temporarily impact margin expansion, but medium-term expansion expected through product filings and cost optimization. BFL expects collection efficiency to improve in H2: Steps taken to strengthen collections and slow rural B2C business should yield results in the second half of FY25. Bajaj Finserv Health to provide long-term plan in 6-9 months: Post-Vidal acquisition, management will outline a complete long-range plan including breakeven visibility within 6-9 months.

Risk read

Key risks include Elevated loan losses and collection efficiency in BFL — BFL's loan losses and provisions were elevated in Q1 due to muted collection efficiencies and increase in stage 2 assets by INR 864 crore.; Impact of new surrender regulations on BALIC margins — New IRDA surrender value norms may temporarily slow margin expansion; management was evasive on quantifying the impact.; Large commercial claims in BAGIC may recur — Though termed one-offs, large property and liability claims caused combined ratio deterioration; similar claims could arise in future.; Vidal acquisition may lead to customer attrition — Insurance partners of Vidal may withdraw business due to conflict of interest with Bajaj Finserv's insurance arms..

Promise ledger

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