Bharat Petroleum Corporation vs Grasim 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.

Grasim's Q2 FY24 consolidated revenue grew 10% YoY to INR 30,221 crore, with EBITDA up 14% to INR 4,509 crore, driven by cement and financial services. Standalone revenue rose 4% to INR 6,442 crore, while EBITDA jumped 21% to INR 1,354 crore on higher VSF volumes (+24% YoY) and lower input costs. However, global price weakness in viscose and chloralkali persisted, and new businesses (paints, B2B e-commerce) incurred initial losses. Management guided for paints commercial launch in Q4 FY24 with three plants operational, and B2B platform Birla Pivot nearing INR 100 crore monthly run rate. Risks include sustained global demand softness in textiles and chemicals, and potential margin pressure from volatile input costs.

Guidance read

Paints commercial launch in Q4 FY24: Three plants (Panipat, Ludhiana, Cheyyar) have received consent to operate and will be operational in Q4 FY24, with product launch in the same quarter. Epoxy capacity expansion commissioning in Q3 FY24: The expanded epoxy capacity is under commissioning and expected to be operational in Q3 FY24. Renewables capacity of ~1 GW to be commissioned by Q1 FY25: Projects under implementation of about 1 GW are expected to be commissioned by next year's first quarter. Debt-to-EBITDA not to exceed ~3.5x: Even with full paints CapEx next fiscal, debt-to-EBITDA is not expected to cross about 3.5x.

Risk read

Key risks include Sustained global textile demand weakness — International brands continue to hold elevated inventories, suppressing demand for VSF and VFY; recovery timeline remains uncertain.; Volatile input costs — Caustic soda, sulfur, coal, and oil prices are volatile; recent stabilization and upticks could pressure margins.; Paints business profitability impact — Initial costs from paints business are being charged to P&L, with losses expected to persist until commercial launch and scale-up.; VFY pricing pressure from Chinese imports — Anti-dumping duty on VFY is only at DGTR recommendation stage; Chinese imports continue to pressure domestic prices due to low domestic consumption in China..

Promise ledger

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