Bharat Petroleum Corporation vs Bajajfinsv Q4 FY24

BPCL reported Q4 FY24 revenue of INR 132,085 crore and PAT of INR 4,224 crore, contributing to a record full-year net profit of INR 26,674 crore. Refinery throughput hit an all-time high of 39.33 MMT, with GRM of $12.48/bbl (premium to Singapore) driven by Russian crude sourcing (39% of imports) and high diesel yield. Marketing sales grew 2.09% QoQ, with retail market share gains in petrol (29.6%) and diesel (29.8%). Management guided for INR 1.7 lakh crore capex over five years, including Bina refinery expansion to 45 MMT by FY29, 4,000 new retail outlets, and 10 GW renewable capacity by 2040. Risks include moderation of Russian crude discounts (now $3-6/bbl vs $8-10 last year) and potential volatility in product cracks.

Guidance read

Refining capacity expansion to 45 MMT by FY29: Brownfield expansion of Bina Refinery and debottlenecking of existing refineries to increase capacity from current levels to 45 MMT per annum by FY 2029. Capex of INR 1.7 lakh crore over five years (FY24-29): Planned investments include INR 75,000 crore for refineries/petchem, INR 20,000 crore for marketing, INR 25,000 crore for gas, INR 10,000 crore for green energy, and INR 32,000 crore for upstream. FY25 capex target of INR 15,000-16,000 crore: Breakdown: INR 4,200 crore for refinery/petchem, INR 7,000 crore for marketing (including CGD), and INR 2,000-2,500 crore for BPRL equity infusion. Add 4,000 new retail outlets by FY29: Plan to expand network from 22,000 to 26,000 outlets; FY25 target is 1,300 new outlets.

Risk read

Key risks include Moderation of Russian crude discounts — Discounts on Russian crude have narrowed from $8-10/bbl last year to $3-6/bbl currently, potentially compressing GRM premiums.; Volatility in product cracks — International product cracks have fallen significantly in Q4, and management noted that further moderation could impact refining margins.; Geopolitical and sanctions risk on Russian crude supply — Ongoing sanctions and payment issues cause intermittent delays in Russian crude deliveries; supply continuity is uncertain.; Brazil impairment and legal risk — INR 1,798 crore impairment on BMC-30 block in Brazil due to adverse arbitration; appeal filed but outcome uncertain..

Promise ledger

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

Bajaj Finserv reported a strong Q4 FY24 with consolidated total income up 36% YoY to INR 32,042 crore and PAT up 20% to INR 2,119 crore. The general insurance arm (BAGIC) grew gross written premium 32% YoY, significantly outpacing industry growth of 10.9%, though the combined ratio weakened to 101.6% from 97.3% due to higher claims. Life insurance (BALIC) delivered individual rated premium growth of 17% on a high base, with NBV up 16% to INR 480 crore. Bajaj Finance continued its robust performance with 25% revenue growth and 21% PAT growth. Management highlighted market share gains in both insurance businesses and expressed optimism about sustained growth driven by favorable macros and regulatory tailwinds. Key risks include competitive intensity in motor insurance, potential regulatory changes on surrender charges, and the cyclical nature of tender-driven government health and crop businesses.

Guidance read

BAGIC to maintain above-market growth with balanced profitability: Management expects continued market share gains driven by distribution expansion and prudent underwriting, but no specific growth target given. BALIC to grow faster than industry with improving margins: Directionally, NBV margins expected to improve due to scale and cost efficiencies, though no specific numbers provided. Bajaj Finserv Health to integrate Vidal acquisition in Q1 FY25: Acquisition completed in April 2024; integration and utilization of Vidal network to begin next quarter.

Risk read

Key risks include Motor TP pricing uncertainty — No price hike in motor third-party for years; frequency of accidents rising, and regulatory approval for hike is uncertain, especially in an election year.; Regulatory risk on surrender charges for life insurance — Regulator may reconsider surrender charge regulations; management declined to comment, indicating potential impact on product profitability.; Dependence on tender-driven government health and crop business — Growth in government health and crop is tender-based and pricing-dependent; management may lose share if pricing becomes unfavorable.; Persistency pressure in life insurance from older cohorts — 37th month persistency dropped due to a specific partner bucket; 49th month may also be impacted, though overall persistency improving..

Promise ledger

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