Bharat Petroleum Corporation vs Grasim 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.

Grasim's Q2 FY25 consolidated revenue grew 11% YoY to ₹33,563 crore, marking the 16th consecutive quarter of growth. However, consolidated EBITDA fell 10% YoY to ₹4,042 crore, dragged by lower profitability in cement and initial investments in the paints business (Birla Opus). The VSF division achieved its highest-ever quarterly sales volume of 219,000 tons, while chemicals EBITDA rose 16% YoY. Paints business is on track to exit FY25 with high single-digit market share, with three plants commissioned and two more starting trial runs. Management maintained guidance for Birla Opus and Birla Pivot (targeting $1B revenue in three years). Key risk: sustained competitive intensity in paints could pressure margins and delay profitability.

Guidance read

Paints: exit FY25 with high single-digit market share: Birla Opus is on track to achieve high single-digit market share in decorative paints by end of FY25, with three plants commissioned and two more starting trial runs. Birla Pivot: $1 billion revenue in three years: B2B e-commerce platform targeting $1 billion revenue within three years from FY24, with current ramp-up ahead of expectations. UltraTech: 200 MTPA cement capacity by FY27: UltraTech on track to achieve gray cement capacity of over 200 million tons per annum by FY27, including acquisitions. Net debt to EBITDA at 3.5x: Management guided net debt to EBITDA of about 3.5x, with balance rights issue of ₹2,000 crore expected in Q4.

Risk read

Key risks include Paints competitive intensity and margin pressure — Increased trade discounts and promotional spending by incumbents could pressure Birla Opus's margins and delay profitability.; Cement demand slowdown and realization decline — Cement business faced demand slowdown due to elections, heat, and extended monsoons, leading to lower realizations and impacting consolidated EBITDA.; Chlorine oversupply depressing ECU — Oversupply of chlorine led to higher negative realization, impacting chemicals ECU despite improvement in caustic prices.; Paints revenue and profitability disclosure opacity — Management declined to share specific revenue or EBITDA numbers for the paints business, citing competitive sensitivity, which limits visibility for investors..

Promise ledger

Scorecard data is being built as historical quarters are processed.