Ongc vs Bajajfinsv Q4 FY25

ONGC's Q4 FY25 standalone PAT declined 12.1% YoY to INR 35,610 crore, primarily due to a INR 4,257 crore increase in exploration write-offs. Revenue was flat at INR 137,361 crore. Crude oil production rose 0.9% to 18.558 MMT, while gas production fell 1.6% to 19.654 BCM. Management highlighted a record 578 wells drilled and INR 62,000 crore CapEx, the highest ever. Key growth drivers include the KG 98/2 field (oil at 33-34 kbpd, targeting 45 kbpd), new well gas pricing adding INR 700 crore in FY25, and OPaL's turnaround post-SEZ denotification. Guidance points to standalone crude production of ~21.5 MMT and gas of ~21 BCM in FY26, with 5 MSCMD incremental gas from DUDP by Q4 FY26. Risks include continued dry well write-offs and delayed KG 98/2 gas ramp-up due to living quarters installation.

Guidance read

Standalone crude oil production target of ~21.5 MMT for FY26: Management expects crude production to rise to 21.5 million metric tons in FY26, driven by TSP initiatives and new wells. Standalone gas production target of ~21 BCM for FY26: Gas production expected to reach 21 BCM in FY26, with 5 MSCMD incremental from DUDP by Q4 FY26. CapEx guidance of INR 30,000-35,000 crore for FY26: Total CapEx including E&P and renewables expected to be INR 30,000-35,000 crore, lower than FY25 due to falling service costs. New well gas to add INR 1,500-2,000 crore revenue in FY26: Revenue from new well gas pricing expected to double from INR 700 crore in FY25 to INR 1,500-2,000 crore in FY26.

Risk read

Key risks include Dry well write-offs may persist — Exploration write-offs surged to INR 4,257 crore in FY25; management noted unpredictability in dry well incidence, which could pressure earnings.; KG 98/2 gas ramp-up delayed by living quarters installation — Gas production currently at 2.75 MSCMD; target of 6-7 MSCMD hinges on installing a living quarters platform, delayed due to weather.; OPaL ethane sourcing timeline uncertainty — OPaL's ethane import from US is targeted for 2028; any delay could prolong reliance on costlier naphtha (60% of feedstock)..

Promise ledger

Of 2 tracked promises, management 0 met, 1 close, 1 missed.

Bajaj Finserv reported a steady Q4 FY25 with consolidated total income up 14% YoY to INR 36,596 crore and PAT up 14% to INR 2,417 crore. The general insurance arm BAGIC saw GWP decline 13% due to accounting changes and volatile crop/government health business, but core retail and commercial lines grew 8-12%, outpacing the industry. Life insurance arm BALIC delivered a strong VNB margin expansion to 22.1% (up ~400bps YoY) driven by product mix shift and cost actions, though PAT fell 61% on lower realized gains. Bajaj Finance continued robust performance with AUM growth of 26% and stable asset quality. Management expressed cautious optimism for H2 FY26, focusing on profitable growth and cost efficiencies. Key risks include regulatory changes, competitive pressure in insurance, and potential market volatility impacting investment gains.

Guidance read

BALIC VNB margin trajectory to steepen: Management expects VNB margin expansion to accelerate, with benefits from cost actions and product mix fully playing out by FY27, but visible from H2 FY26. BALIC top-line growth to pick up from H2 FY26: After a muted H1 due to high base and agency channel reset, growth is expected to recover in the second half of FY26. BAGIC to continue calibrated growth with underwriting focus: Management aims to maintain profitable growth, prioritizing underwriting performance over market share in tender-driven businesses. Platform businesses to scale transactions: Bajaj Finserv Health and Bajaj Markets are expected to increase transaction volumes and achieve greater scale, with health targeting international expansion.

Risk read

Key risks include Regulatory changes impacting insurance accounting — The 1/n regulation for long-term products distorted GWP and combined ratio comparability, and further regulatory shifts could affect reported metrics.; Concentration risk in bancassurance — BALIC's largest bancassurance partner (Axis Bank) contributes 22% of business; the partner's acquisition of a competing insurer could pressure margins or market share.; Market volatility impacting investment gains — Lower realized gains in Q4 due to market conditions dragged PAT for both insurance subsidiaries; continued volatility could affect profitability.; Competitive pressure in tender-driven insurance lines — Aggressive pricing in crop and government health segments led BAGIC to reduce participation, risking market share loss in these lines..

Promise ledger

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