Bharat Petroleum Corporation vs TATA CONSUMER PRODUCTS Q1 FY25

BPCL reported Q1 FY25 revenue of INR 128,103 crore and PAT of INR 3,015 crore, despite absorbing ~INR 2,300 crore in LPG under-recoveries. Normalized PAT (excluding LPG losses and inventory gains) was ~INR 4,600 crore. Refinery throughput hit 10.11 MMTPA (160% of nameplate) with GRM of $7.86/bbl, supported by 39% Russian crude processing. Marketing volumes grew 3.2% YoY, with aviation fuel up 15% and market share at 26.9% among PSUs. Management guided for FY25 capex of INR 16,400 crore, targeting 23,000 retail outlets and 300+ CNG stations. The Bina petrochemical project (INR 49,000 crore) is on track for FY28-29 commissioning. Risks include potential sustained LPG under-recoveries without government compensation and project cost escalation at Mozambique LNG.

Guidance read

FY25 Capex of INR 16,400 crore: Management guided for total capex of INR 16,400 crore in FY25, with INR 2,438 crore spent in Q1. Retail network to reach 23,000 outlets by year-end: BPCL plans to expand its retail outlet network to 23,000 by end of FY25, adding ~1,300 outlets during the year. Bina petrochemical project commissioning by FY28-29: The integrated refinery and petrochemical expansion at Bina (INR 49,000 crore) is targeted for commissioning in FY28-29. Ethanol blending target of 15% in current quarter: BPCL aims to achieve 15% ethanol blending in the current quarter, up from 14.13% in Q1.

Risk read

Key risks include LPG under-recovery without compensation — BPCL incurred ~INR 2,300 crore in LPG losses in Q1, with no government compensation mechanism announced. Monthly losses could be ~INR 600 crore at current Saudi CP prices.; Mozambique LNG project cost escalation — The Mozambique LNG project (force majeure) may see cost escalation from $15.5B to ~$19.5-20B, impacting IRR. Management confirmed the project remains commercially viable but with lower returns.; Market share pressure from private players — BPCL's overall marketing volume growth of 3.2% lagged industry growth of 5.5%, partly due to private players regaining share as pricing normalized. Diesel volumes saw degrowth.; Refinery turnaround impact on throughput — Planned turnarounds at Kochi (45 days) and Bina (15 days) in H2 FY25 could temporarily reduce throughput and GRM..

Promise ledger

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

Tata Consumer Products reported a mixed Q1 FY25. Consolidated revenue grew 16% to INR 4,352 crore, with organic growth of 10% and acquisitions adding 6%. EBITDA rose 23% to INR 671 crore, with margin expansion of 80 bps to 15.4%. India Beverages grew only 6% (1% organic) as intense summer hurt hot tea and out-of-home NourishCo volumes. India Foods continued strong momentum with 30% revenue growth (14% organic, 10% volume). International business grew 10% (8% constant currency) with EBIT up 46%. PAT fell 14% to INR 289 crore due to higher amortization (INR 55 crore) and interest costs from bridge financing. Management highlighted integration of Capital Foods and Organic India is on track, with combined gross margins of 48.4%. Growth businesses (including acquisitions) now form 29% of India portfolio. Key risk: sustained high tea and coffee prices could pressure margins if not passed through.

Guidance read

Growth businesses to reach 30% of India portfolio: Management reiterated commitment to grow the growth businesses (including acquisitions) from 20% to 30% of the India portfolio, with these businesses growing at 30% CAGR. Organic India integration to complete in 100 days: Management committed to completing the integration of Organic India within 100 days from the April 16 closure, and is on track. Capital Foods integration largely complete: Integration of Capital Foods, including channel inventory cleanup, is complete and run rate is trending as expected. Rights issue to repay bridge debt: The rights issue, expected to close on August 19, will be used to repay short-term bridge financing of INR 3,000 crore raised for acquisitions.

Risk read

Key risks include Sustained high tea and coffee prices — North Indian tea prices are up 15-20% and coffee prices (Robusta) up ~50% from two quarters ago, which could pressure margins if not passed through.; NourishCo underperformance due to heatwave and tactical missteps — NourishCo revenue grew only 7% due to intense summer impacting out-of-home consumption and delayed tactical pricing actions, raising concerns about the business's resilience.; Integration disruptions at Organic India — Organic India deal closed on April 16, and inventory consolidation took longer than expected, potentially impacting near-term revenue and margins.; Amortization and interest costs weighing on PAT — Quarterly amortization of INR 55 crore from acquisitions and higher interest costs from bridge financing are depressing reported PAT, with no near-term relief expected..

Promise ledger

Of 3 tracked promises, management 0 met, 0 close, 3 missed.