Bharat Petroleum Corporation vs Maruti 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.

Maruti Suzuki reported Q2 FY25 net sales of INR 35,589 crore, nearly flat YoY, while PAT fell 17.4% to INR 3,069 crore due to a one-time tax provision. Domestic wholesale volumes declined 3.9% YoY, but exports grew 12.1%. Festive retail sales surged 14% YoY, driven by rural demand and higher discounts averaging INR 29,300 per car. CNG mix reached 33% of sales. Management expects full-year retail growth of 3-4% and stable discounts. The upcoming EV launch in January 2025 and Kharkhoda plant commissioning by Q4 are key catalysts. Risk: small car segment remains weak due to affordability challenges, with no clear recovery timeline.

Guidance read

Full-year retail sales growth of 3-4%: Management expects retail sales to grow 3-4% for FY25, with April-October already at 3.9%. Kharkhoda plant commissioning by Q4 FY25: The new 300,000-unit capacity plant in Kharkhoda is on track to be commissioned by end of this financial year. EV launch in January 2025 with high range: The first EV (e-SUV) will be launched at Bharat Mobility Global Expo, featuring a ~60 kWh battery and high range. One EV launch per year on average till end of decade: Management plans to launch 5-6 EVs by the end of the decade, averaging one per year.

Risk read

Key risks include Small car segment weakness — Affordability challenges persist in the small car segment, with no clear recovery timeline despite limited edition launches.; Discount pressure on margins — Higher discounts (INR 29,300/car) are compressing margins; sustainability depends on demand recovery.; Yen volatility and hedging effectiveness — CFO noted yen uncertainty due to macro factors (US elections), though hedging is being stepped up to reduce volatility.; Model portfolio complexity — Expanding to 28 models from 18 raises complexity in dealership footprint and operations, acknowledged by management as a key challenge..

Promise ledger

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