Grasim vs Bajajfinsv Q1 FY25

Grasim's Q1 FY25 consolidated revenue stood at INR 33,861 crore and EBITDA at INR 4,076 crore. The VSF business achieved record quarterly volumes of 212 KT, while chemicals saw improved ECU realizations of INR 32,529. The paints business (Birla Opus) commenced commercial production at three plants, with over 80% of planned products in distribution and 102 depots operational. The B2B e-commerce platform Birla Pivot reached a quarterly run rate of over INR 550 crore. Management maintained a cautiously optimistic outlook, with VSF demand supported by fiber substitution and chemicals benefiting from stable caustic prices. However, chlorine remains under pressure due to competitor capacity additions. Key risks include sustained losses from new businesses and potential demand slowdown in key markets.

Guidance read

Paints: High single-digit market share by FY25 end: Management reiterated target of achieving high single-digit market share by end of FY25. Paints: 50,000 active dealers by FY25 end: Target to have 50,000 active dealers by end of FY25, currently on track. Renewables: Double capacity to 2 GW by FY25 end: Renewable energy capacity to double from 1 GW to 2 GW by end of FY25. B2B e-commerce: $1 billion revenue in three years: Birla Pivot aims to reach $1 billion in revenue within three years.

Risk read

Key risks include Paints business losses may persist — Paints business is in investment mode with significant marketing spend; losses expected to continue for at least three years.; Chlorine oversupply from competitor capacity — Competitor added significant chlorine capacity in Gujarat, putting downward pressure on chlorine prices and ECU.; Paints revenue understated due to CWIP accounting — Revenue from trial production is capitalized to CWIP, making reported revenue not fully representative of actual sales.; Global demand slowdown and geopolitical risks — Elevated geopolitical risks and high interest rates could impact global textile demand and chemical prices..

Promise ledger

Scorecard data is being built as historical quarters are processed.

Bajaj Finserv reported a mixed Q1 FY25. Consolidated PAT grew 10% YoY to INR 2,138 crore, but excluding one-offs, growth was 8%. Revenue rose 35% to INR 31,480 crore. BAGIC posted strong GWP growth of 24% to INR 4,761 crore, though combined ratio worsened to 103.7% due to large commercial claims. BALIC's individual rated new business grew 26%, but PAT fell 37% due to new business strain. Bajaj Finance resumed eCom and Insta EMI card issuance post-RBI embargo. Emerging businesses' losses widened to INR 119 crore. Management highlighted margin pressure from regulatory changes and elevated loan losses, but expects improvement in H2. Key risk: elevated credit costs and collection efficiency in BFL's rural portfolio.

Guidance read

BAGIC expects combined ratio to normalize in subsequent quarters: Management indicated that large commercial claims in Q1 are one-offs and not expected to recur, with combined ratio likely improving. BALIC margins may see a pause in expansion this year due to surrender regulations: New surrender value norms could temporarily impact margin expansion, but medium-term expansion expected through product filings and cost optimization. BFL expects collection efficiency to improve in H2: Steps taken to strengthen collections and slow rural B2C business should yield results in the second half of FY25. Bajaj Finserv Health to provide long-term plan in 6-9 months: Post-Vidal acquisition, management will outline a complete long-range plan including breakeven visibility within 6-9 months.

Risk read

Key risks include Elevated loan losses and collection efficiency in BFL — BFL's loan losses and provisions were elevated in Q1 due to muted collection efficiencies and increase in stage 2 assets by INR 864 crore.; Impact of new surrender regulations on BALIC margins — New IRDA surrender value norms may temporarily slow margin expansion; management was evasive on quantifying the impact.; Large commercial claims in BAGIC may recur — Though termed one-offs, large property and liability claims caused combined ratio deterioration; similar claims could arise in future.; Vidal acquisition may lead to customer attrition — Insurance partners of Vidal may withdraw business due to conflict of interest with Bajaj Finserv's insurance arms..

Promise ledger

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