Coalindia vs Bharat Petroleum Corporation Q2 FY24

Coal India reported a solid H1 FY24 with production up 12% YoY and offtake up 9% YoY, driven by robust power demand (33% growth in October). Management reiterated the FY24 production target of 780 million tons and FY25 target of 851 million tons, supported by improving evacuation infrastructure and MDO ramp-up. E-auction premiums remain strong at 90% over notified price, though management sees no near-term FSA price hike for the power sector. The company is on track to achieve 1 billion tons by FY27, contingent on demand. Key risks include land acquisition delays (e.g., MCL's Basundhara stoppage) and railway rake shortages in SECL and MCL, which could constrain dispatches.

Guidance read

FY24 production target of 780 million tons: Management confirmed the annual production target of 780 million tons for FY24, with H1 production up 12% YoY. FY25 production target of 851 million tons: Management guided for FY25 production of 851 million tons, implying ~9% YoY growth. E-auction volume at 15% of production in H2: Management expects e-auction volumes to be 15% of production in H2 FY24. MDO production to reach 55-60 million tons by FY26: MDO projects are expected to contribute 20-25 million tons in FY25 and 55-60 million tons in FY26.

Risk read

Key risks include Land acquisition delays at MCL — MCL's Basundhara coal field faced a 26-day stoppage due to land compensation disputes, impacting production.; Railway rake shortages in SECL and MCL — Management acknowledged daily rake shortages of 5 rakes in SECL and MCL, constraining dispatches.; E-auction premium volatility — E-auction premiums have been volatile, ranging from 50-60% to 90%, dependent on demand and import prices.; No near-term FSA price hike for power sector — Management ruled out any FSA price hike for the power sector in the next 7-8 months, limiting revenue growth..

Promise ledger

Scorecard data is being built as historical quarters are processed.

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.