Bharat Petroleum Corporation vs Maruti 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.

Maruti Suzuki reported a strong Q2 FY24 with record quarterly sales volume of 552,055 units, net sales of INR 35,535 crore (up 24.5% YoY), and net profit of INR 3,716 crore (up 80% YoY). The company gained 120 bps market share in PVs and achieved leadership in the SUV segment with ~23% share. Growth was driven by easing semiconductor shortages, favorable commodity prices (especially precious metals), cost reduction efforts, and a richer product mix. Management remains cautiously optimistic on demand, with festive season industry growth of ~18% so far. However, the small car segment continues to weaken due to affordability issues, and pending orders have reduced to ~250,000 units. Key risk: rising steel prices could pressure margins in H2.

Guidance read

Exports target of 750,000-800,000 units by FY2031: Management plans a threefold increase in export volumes from current levels to about 750,000-800,000 units by 2030-31. FY24 CapEx above INR 8,000 crore: Capital expenditure for the current fiscal year is expected to exceed INR 8,000 crore. Market share recovery to 50%: Management expressed commitment to gradually recover market share to the 50% mark over time.

Risk read

Key risks include Rising steel prices may pressure margins — Steel prices have started increasing, which could negatively impact gross margins in Q3 and beyond.; Small car segment weakness persists — Affordability issues continue to depress small car demand, which remains a significant portion of Maruti's portfolio.; Margin sustainability questioned by analysts — Analysts raised concerns about one-off gains and inventory adjustments boosting margins; management clarified no one-offs but acknowledged exceptional quarter with all positives aligning.; Capacity fungibility constraints — Shifting production mix towards SUVs may require investments in flexibility, potentially impacting near-term volumes and margins..

Promise ledger

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