Bharat Petroleum Corporation vs Coalindia Q3 FY24

BPCL reported Q3 FY24 revenue of ₹1,29,976 crore and PAT of ₹3,397 crore, with nine-month PAT at ₹22,449 crore (vs loss last year). Refinery throughput hit 9.86 MMT (100%+ capacity) despite Mumbai shutdown, with GRM of $13.35/bbl (premium to Singapore). Russian crude accounted for 40% of imports, discounts stable. Marketing sales grew 5.1% Apr-Dec, market share in petrol/diesel improved. Management outlined Project Aspire with ₹1.5-1.7 lakh crore capex over 5 years, targeting net zero by 2040. Key projects: Bina refinery expansion (7.8 to 11 MMT) and Kochi polypropylene unit (₹5,044 crore). Mozambique LNG restart expected by mid-2024. Risk: volatility in crude prices and petchem margins due to global demand weakness.

Guidance read

Capex of ₹1.5-1.7 lakh crore over 5 years: Planned capital outlay includes ₹75,000 crore for refineries/petchem, ₹32,000 crore upstream, ₹25,000 crore each for gas and marketing, ₹10,000 crore for renewables. Rights issue to be completed by March 2024: Board approved rights issue; management aims to complete within current financial year (FY24). Mozambique LNG restart by mid-2024: Force majeure expected to be lifted around June/July 2024; work to commence shortly after. Petrol demand growth 4-5%, diesel 1.5-2% over 5 years: Management expects MS growth of 4-5% and HSD growth of 1.5-2% CAGR over next 5 years despite EV adoption.

Risk read

Key risks include Crude price volatility and marketing margins — Crude oil prices range-bound $80-90/bbl; marketing margins could turn negative if prices spike above $85/bbl.; Petchem margins under pressure from Chinese demand — Polypropylene margins remain negative due to weak Chinese demand; recovery uncertain.; Red Sea disruptions impacting crude sourcing — While currently covered till April, prolonged Red Sea tensions could raise shipping costs and narrow Russian crude discounts.; High capex may strain balance sheet — Peak debt-equity expected at 1x; returns from large projects (Bina, Mozambique) will take 4-5 years to materialize..

Promise ledger

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

Coal India reported a strong Q3 FY24 with highest-ever nine-month revenue of INR 104,914 crore (+5% YoY) and PAT of INR 23,849 crore. Production grew 11% YoY to 531.9 MT, driven by robust demand from power plants and improved logistics. Management maintained FY24 production guidance of 780 MT (likely ~770 MT due to SCCL lag) and set FY25 target at 838 MT. E-auction premiums moderated to 36-48% in Jan-Feb from Q3's 116% due to higher domestic availability. CAPEX guidance for FY25 is INR 17,500 crore, funded largely through internal accruals. Key risks include potential further decline in e-auction premiums and execution challenges in SCCL's ramp-up.

Guidance read

FY24 production target of ~780 MT: Management expects to achieve ~770 MT production for FY24, slightly below the original 780 MT target due to SCCL lag, but with efforts to minimize the gap. FY25 production target of 838 MT: Ministry has set a production target of 838 MT for FY25, down from initial 850 MT due to high coal stocks, with a review in April. CAPEX of INR 17,500 crore for FY25: CAPEX target for FY25 is INR 17,500 crore, including coal mining expansion, solar projects, and diversification initiatives. E-auction volume to be at least 15% of production: Management aims to maintain e-auction volumes at 15% or more of production, with potential to increase up to 20% if demand permits.

Risk read

Key risks include Declining e-auction premiums — E-auction premiums have fallen sharply from 116% in Q3 to 36-48% in Jan-Feb, which could pressure realizations if the trend continues.; SCCL production shortfall — SCCL is lagging its target by 8-9 MT due to land issues and EC clearances, posing a risk to overall production targets.; Accounting policy change impact on tax — Change in shipping activity adjustment accounting may lead to tax implications, though management expects limited net impact.; Receivables buildup — Trade receivables increased from INR 13,000 crore to INR 17,000 crore, driven by delayed payments from power utilities, which could strain cash flows..

Promise ledger

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