Bharat Petroleum Corporation vs Grasim 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.

Grasim reported its highest-ever consolidated revenue of INR 1,30,978 crore and EBITDA of INR 20,837 crore for FY24, driven by record volumes in cement, cellulosic fiber, and caustic soda. The paints business (Birla Opus) commenced production at three plants and is on track to onboard 50,000 dealers in FY25, targeting high single-digit market share by year-end. The B2B e-commerce platform crossed INR 1,000 crore revenue in its first year. However, the chemicals segment faced headwinds from weak chlorine derivatives demand, and a one-time impairment of INR 497 crore was taken on the AV Terrace Bay joint venture. Management guided for standalone CapEx of ~INR 4,500 crore in FY25, largely for paints. Key risk: aggressive competition in paints could pressure pricing and market share gains.

Guidance read

Paints: High single-digit market share by FY25 exit: Birla Opus aims to exit FY25 with high single-digit market share, supported by dealer onboarding and product quality. Paints: INR 10,000 crore revenue by FY28: Target to achieve INR 10,000 crore revenue in the third year of full operations, with profitability at that point. B2B E-commerce: $1 billion revenue in 3 years: Birla Pivot aspires to reach $1 billion revenue in the next three years. Standalone CapEx of ~INR 4,500 crore in FY25: Majority allocated to paints business; part of the INR 10,000 crore paints CapEx plan.

Risk read

Key risks include Aggressive competition in paints — Incumbents are actively defending market share with increased dealer visits and promotions, which could slow Birla Opus's market share gains.; Weakness in chlorine derivatives — Chlorine derivatives demand remains subdued due to agrochemical weakness, impacting chemical segment profitability.; Global oversupply in chemicals — Surplus capacity in China and weak global demand keep chemical prices range-bound, limiting margin improvement.; Paints capacity utilization risk — Aggressive capacity build-out may lead to lower utilization if demand ramp-up is slower than expected, impacting profitability timeline..

Promise ledger

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