Bharat Petroleum Corporation vs Bajajfinsv Q2 FY25

BPCL reported Q2 FY25 PAT of ₹2,397 crore, impacted by ₹2,104 crore LPG under-recoveries and ₹1,113 crore marketing inventory losses. Refinery throughput was strong at 10.28 MMTPA (114% capacity) with GRM of $4.41/bbl, down from $8+ in Q1 due to lower cracks and reduced Russian crude throughput (34% vs 39%). Marketing volumes grew 1.6% YoY, driven by retail network expansion (540+ new outlets in H1). Management expects LPG losses to rise to ~₹3,000 crore/quarter in H2, but has approached the government for subsidy. CapEx guidance for FY25 is ₹15,000-16,000 crore, rising to ₹18,000 crore next year. Key risk: sustained weak refining margins and elevated LPG losses could pressure cash flows and delay deleveraging.

Guidance read

CapEx for FY25: ₹15,000-16,000 crore: Management expects to end the year with CapEx in the range of ₹15,000-16,000 crore, slightly below the original plan of ₹16,400 crore. LPG losses to rise to ~₹3,000 crore per quarter in H2: Assuming Saudi CP at $620-630/ton, management estimates monthly LPG under-recovery of ₹900-1,000 crore, implying ~₹3,000 crore per quarter. Retail demand growth: MS 6%, HSD 1.5% for FY25: Management estimates retail demand growth of 6% for petrol and 1.5% for diesel in FY25, with HSD urban demand slower due to CNG transition. CNG station additions: 300 in FY25, 800 over next 2-3 years: BPCL plans to add 300 CNG stations in FY25 and ~800 over the next 2-3 years, targeting 15-16% CAGR in CGD volumes.

Risk read

Key risks include Sustained LPG under-recoveries without government compensation — LPG losses are expected to rise to ~₹3,000 crore/quarter in H2, and management has only approached the government for budget support without certainty of compensation.; Weak refining margins may persist — Management expects similar crack levels for the next couple of quarters, with no big jump in spreads, which could keep GRMs subdued.; Potential delay in Mozambique LNG project — Force majeure has not been lifted yet; any further delay could defer planned CapEx and impact returns on the $2.15 billion already invested.; CNG margin compression due to gas deallocation — Recent deallocation of gas for CNG may squeeze margins, though management believes long-term deregulation will allow pass-through..

Promise ledger

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

Bajaj Finserv reported consolidated revenue growth of 30% YoY to ₹33,703 crore, with PAT up 8% YoY. The general insurance business (BAGIC) saw core premium growth of 11% (3x market), though headline GWP fell 20% due to a government health shift to Q3. Combined ratio worsened to 101.4% from 95.3% due to higher natural catastrophe claims. Life insurance (BALIC) grew individual retail new business by 34% YoY, but VNB margins declined 3.8pp to 9.2% due to a mix shift toward ULIPs. Bajaj Finance AUM grew 29% with strong asset quality (GNPA 1.06%). Management highlighted disciplined underwriting and risk management, but flagged near-term headwinds from regulatory changes (surrender value norms) and competitive pressure in credit life. Key risk: further margin compression in life insurance if ULIP dominance persists.

Guidance read

BALIC VNB margin improvement in H2: Management expects VNB margins to improve in H2 as product mix rebalances away from ULIPs and commission deferrals take effect. Bajaj Finserv Direct breakeven in 1-2 quarters: The marketplace business expects to break even on a cash basis within the next couple of quarters. Capital deployment of ₹500-600 crore in health & AMC by Mar'26: BFL plans to invest ₹500-600 crore in health tech and asset management over the next 18 months. BAGIC core growth to remain above market: Management expects core premium growth to continue outpacing the industry, driven by disciplined underwriting.

Risk read

Key risks include Allianz exit from JV creates strategic uncertainty — Allianz has informed Bajaj of its decision to exit the joint venture; management provided no further details, creating uncertainty around future ownership and operations.; VNB margin compression from ULIP mix and regulatory changes — VNB margins fell 3.8pp YoY to 9.2% due to higher ULIP sales; new surrender value norms may further pressure margins.; Motor TP price hike delay hurting growth — No TP price hike for three years has led to underwriting losses; management has reduced exposure, capping motor growth.; Retail health profitability under pressure — Medical inflation and hospital fraud are squeezing margins; management is cautious on growth in this segment..

Promise ledger

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