Bharat Petroleum Corporation vs Bajajfinsv Q2 FY24

BPCL reported a stellar Q2 FY24 with PAT of ₹8,501 crore, driven by robust refining margins (GRM of $18.49/bbl) and strong marketing performance. The Bina refinery operated at 105% capacity despite a planned shutdown, benefiting from high Russian crude processing and favorable diesel cracks. Marketing volumes grew 6.5% YoY, with market share gains in MS and HSD. The company outlined a ₹1,50,000 crore five-year capex plan, including a ₹49,000 crore petrochemical complex at Bina and significant investments in renewables and CGD. Net debt is nearly zero, with a debt-equity ratio of 0.032. However, management refrained from providing near-term guidance, citing volatile crude prices and geopolitical uncertainties. Key risks include potential moderation in refining cracks and delays in Mozambique LNG project.

Guidance read

Capex target of ₹10,000 crore for FY24: BPCL aims to spend ₹10,000 crore in capex for FY24, with ₹5,191 crore already achieved in H1. Add 1,000 new retail outlets in FY24: BPCL plans to add 1,000 new retail outlets during FY24, with 300 added in H1. Add 500 CNG facilities by FY24 end: BPCL aims to add 500 CNG facilities at existing retail outlets by the end of FY24. Five-year capex plan of ₹1,50,000 crore: BPCL outlined a ₹1,50,000 crore capex plan over five years, including ₹49,000 crore for Bina petrochemical complex and ₹26,000 crore for CGD.

Risk read

Key risks include Moderation in refining cracks — Management noted gasoline cracks have moderated in Q3, and diesel cracks may weaken post-winter, potentially impacting GRM.; Mozambique LNG project delays and cost escalation — The project remains under force majeure; cost escalation and timeline delays are likely, with potential impact on BPCL's E&P capex.; PDPP profitability still negative — The PDPP plant at Kochi contributed only $0.55/bbl to GRM, insufficient to cover operating expenses, indicating ongoing losses.; Russian crude discount compression — Management acknowledged that discounts on Russian crude have directionally reduced, which could pressure refining margins..

Promise ledger

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

Bajaj Finserv delivered a strong Q2 FY24 with consolidated revenue up 25% YoY to INR 26,023 crore and PAT up 24% YoY to INR 1,929 crore. Growth was driven by robust performance across subsidiaries: BAGIC reported a 95.3% combined ratio (lowest in 14 quarters) and 39% PAT growth, while BALIC saw NBV growth of 25% to INR 237 crore. BFL continued its momentum with 33% AUM growth and asset quality improvement. The AMC business launched with INR 5,235 crore AUM. Management guided for continued balanced growth, with BAGIC targeting sub-100% combined ratio despite near-term investment costs. Key risk: elevated claims volatility in government health and crop insurance segments could pressure underwriting profitability.

Guidance read

BAGIC combined ratio to be slightly above 100% for next few quarters: Due to investments in manpower and rural expansion, combined ratio may temporarily exceed 100% before normalizing. BALIC NBV growth expected to continue with product mix improvement: Management expects NBV growth to sustain as par product mix improves and new bank partnerships contribute. BFL to maintain long-term financial guidance metrics: BFL continues to deliver on AUM growth, profitability, and asset quality targets as per its stated guidance.

Risk read

Key risks include Government health business claims volatility — The Gujarat government health scheme may have higher loss ratios due to backlog claims, though 80% is reinsured.; Expense ratio normalization pressure — BAGIC's expense ratio may rise as investments in manpower and rural branches continue, impacting near-term profitability.; Competition in crop insurance and government health — Analyst raised concern about sustainability of crop and government health business given competitive pricing and tender-based nature.; BALIC VNB margin compression from product mix shift — Higher share of lower-margin products (ULIP, non-par) and investments in new channels may keep VNB margins below prior year levels..

Promise ledger

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