Good morning, ladies and gentlemen. Good morning, valued investors, analysts, and members from media. Thank you for joining MRPL's Q2 FY 2027 earnings call. Allow me to take you through the quarter's results and a few key updates before we open the floor. As you all know, the industry, especially the refining industry, is going through challenging times due to geopolitical situations, mainly arising out of conflict in West Asia. This has resulted in the squeezing of assured supplies from the Middle East, longer voyage times, and a steep increase in freight and insurance costs. The industry is still in reactionary mode, and events are evolving on a regular basis. The company continues to navigate these challenging times with professionalism and determination while maintaining its nation-first approach. We move to performance. The company's Q2 performance was relatively strong.
The standalone net profit was INR 1,881 crore on an EBITDA base of INR 3,210 crore. This is nearly three times the profit of Q2 of last year, which stood at INR 639 crore. This has been achieved despite a planned shutdown in August. The throughput was 4.18 MMT during Q2 against a quarterly peak of about 4.5 MMT achieved earlier.
The fuel and loss stood at 9.86% for H1 compared to around 11% reported earlier. For the half year, the net profit is INR 2,796 crore against INR 367 crore for the corresponding H1 in the previous year. Considering the positive performance for H1 of this year, the board has declared an interim dividend of INR 3 per share, which works out to a total dividend of INR 526 crore. The borrowings fell by over INR 5,000 crore in six months, reaching to INR 9,245 crore at the end of September.
This is, of course, variable and depends on working capital requirements. The debt-to-equity ratio has correspondingly improved from 1.01 as reported at the end of March 2026 to 0.55 in September 2026 end. Moving on, regarding our crude sourcing, despite the West Asia disruptions, the company has kept crude supplies secure by diversifying its crude sourcing basket. When Middle East term cargoes are curtailed by the situation in the Strait of Hormuz, we have stepped up domestic crude and spot purchases. In Q2, the domestic crude made up of about a quarter of our intake. Term contracts about half, and spot purchases the balance, drawn mainly from West Africa, the Americas, the Middle East, and Russia. The Russian balance made up of about 32% of our Q2 basket against 28% approximately in Q1. Every cargo is procured on commercial terms decided on delivered economics.
Moving on, our retail network has 257 retail outlets across Karnataka, Kerala, Tamil Nadu, and lately into Andhra Pradesh. The half-yearly retail margin continued to be marginally negative. The CapEx for the financial year 2026/2027 is expected to be in the range of INR 1,200 crore-INR 1,500 crore, which includes refinery maintenance, revamping, and small-value IRR projects, including retail projects. Moving on, the major events during the half year. There was the formation of JV company OPML, that is ONGC Petrochemicals Marketing Limited, with 50% stake by ONGC, 25% stake by OPaL, and 25% stake by MRPL. MRPL investment will be of the tune of INR 12.5 crore. This JV is for marketing of petrochemicals and related products. It is expected to enhance petrochemical business, operational planning, and reduce costs through improved logistics, warehousing, grade optimization, and customer management.
PNGRB has granted authorization to MRPL for laying, building, operating, or expanding petroleum and petroleum product ATF pipeline from Devangonthi to Bangalore Airport. This is expected to be completed by the year 2029-30 at a cost of INR 200 crore plus. For the first time, MRPL has been able to obtain an international credit rating. Fitch Ratings has assigned a rating of BBB- Stable, which is at par with the sovereign rating and comparable with its peer companies and OMCs. There was a long-pending tax case, and we have been able to close that long-pending reformate classification dispute, and we have received a refund of INR 212 crore. The company has won two national innovation awards at recently concluded 29th Energy Technology and Innovation Meet, that is ETM 2026, held at Goa.
These achievements reinforce the company's commitment to R&D and innovation and support the Government of India's vision of Atmanirbhar Bharat. On the flip side, there was a CHTU fire incident on 30th September 2026, around noon. There was a fire at our Coker Hydrotreater unit. The incident is under active investigation, and reconstruction of the unit has commenced. The restoration is targeted by mid-December of this year, and we expect Q3 throughput to be close to Q2 levels. We have booked a provisional loss of INR 118.76 crore in Q2 as an exceptional item against an estimated replacement value of about INR 225 crore. These are, of course, preliminary estimates. The assets are adequately insured. To sum it up, MRPL continues to follow nation-first approach, which was evident from MRPL's ramping up of LPG supplies by cutting down on polypropylene during H1.
We will continue to strive to keep throughput and product supplies at peak levels technically possible for fulfilling domestic demand first. We are targeting retail outlet presence of about 500 retail outlets by FY 2028 end. We continue to follow a balanced portfolio approach of debt reduction, modest CapEx, and shareholder returns. Based on current market conditions and performance trends, the company is expected to continue to maintain a strong balance sheet in the current year. Thank you for your continued interest in our company. The floor is now open for questions. I would request you to keep today's discussions restricted to Q2 performance and company's stated plans. For queries and topics other than company's financial and physical performance, you may like to approach other relevant forums of communication with the company. Thank you.
Thank you, sir. We will wait for a moment so that the question queue assembles, and then we'll start the open session. Attendees may request to raise their hand as and when they are about to ask a question, please. Can I hear the call? We have the first question from Mr. Mayank Maheshwari. Mayank, you can go ahead with your
Can you hear me?
Yes, you are audible.
Sir, firstly, thank you for doing this call. I really appreciate you speaking to investors. The first and foremost question I had was related to crude sourcing. Obviously, it has been a challenging time for the last six months. You highlighted your crude sourcing for Q2 FY 2027. Can you just give us a bit of an idea around how you are managing the challenges around freight? Because that has definitely been impacting in September, but now it is getting a bit worse, I suppose, from a freight cost perspective into November, December. Can you just highlight what is going on in terms of your crude sourcing cost and all-in DES basis delivered cost of crude, and if you can give us a bit of a view of managing the situation?
Thank you, Mayank, for your two questions. Yes, sourcing has been a challenge, and as stated in my opening statements, we are addressing these issues head-on. We still continue to be in a reactionary mode because events are evolving, as stated earlier. Given these kind of background, which are already known to you, we have widened our scope of procurement. We have onboarded more vendors. We are trying to source it from West Africa, Americas, and this process is continuous. We are also evolving some of our contractual terms with West Asia. We have more of STS operations being organized by some of these regular sources. Now, coming to the freight part. Yes, freight continues to be a challenge. It has risen sharply, as has been pointed out by us earlier. Once again, freight has gone up to anywhere $7-$10, extreme cases.
Average would be $ 7, $ 8, sometimes $ 9 also. We are living with that. As has been stated earlier, we are following the nation-first approach. We will continue to strive to keep our operations at the fullest peak point. We are also trying to maximize our DAP cargoes, because that takes care of some of the uncertainty involved in sourcing of these vessels. Yes. Thank you.
Okay. If I was to put it in perspective, your freight cost into the current quarter versus last quarter, would you be saying that is up $ 3, $ 4 because your freight is gone to $ 7, $ 8 versus $ 3, $ 4 last quarter? Is that the right way of thinking on an overall total cost of crude basis?
If you are trying to build a model kind of thing, it is anybody's guess. It is still volatile. We are moving from one cargo to another cargo. We see this steep differentiation. That is why DAP cargoes help us. So $ 7-$ 9 would be the typical range. That is what I can say.
Got it, sir. The second question I had was more related to the CapEx plans for MRPL. You have a very healthy balance sheet now. Can you talk to us about your growth plans going forward?
I'll not be giving a very futuristic or forward-looking statement, but yes, our CapEx remain in the modest range. Again, sticking to my opening statement, it is INR 1,200 crore-INR 1,500 crore, and that is also mostly revamping and to some extent our retail expansion. So this is where we are confining ourselves in the near future, and near future I mean about a couple of years.
Got it. Thank you.
Thank you. Yeah, there is one specific case which I did mention about that Devangonthi, the Devangonthi to Bangalore Airport pipeline. That will be a major project coming up.
Yeah, that's very clear. Great. Thank you.
Thank you, Mayank. Next question is from Mr. Nitin Tiwari. Nitin, you can unmute yourself and ask your question.
Hi, good morning. Thanks for the opportunity. Sir, thank you for having this call. Really appreciate. Sir, my first question was with respect to the performance of refinery and the marketing division. What was our refinery output in terms of key products? Either percentages or absolute numbers would be helpful in terms of how much we produced diesel, gasoline, ATF, et cetera, and also on the petrochemical side. What was our marketing throughput for petroleum? I mean, I am talking about the retail network that you have.
I will request my head marketing, Mr. Deepak Prabhakar, ED, to take this question, please.
Good morning.
Morning.
So, specific queries on how we have done with respect to the marketing. The Q2 has seen a very high sale with respect to the retail product, primarily because of curtailment of retail operations by the private OMCs. We are seeing a year-on-year growth of almost 50% from the last quarter. While this is not a structural change, it has got to do with the fact that some of the private OMCs have curtailed the sale due to the lower margins. As Mr. Kamath said, we are a public sector company, and being a responsible public sector, we have not done any curtailment of operations. We are continuing to serve the market.
We also believe that this serving of the market would also result in some stickiness in the customer base, and that some of this growth, even when the situation normalizes, would continue to be with us. In the direct marketing space, again, this has also been a place where the space has been vacated by the private OMCs largely, and also to some extent by the public sector OMCs. However, MRPL has continued to supply to these entities as a market-building exercise, and we hope that these would be sustained. Our direct marketing growth has also been significant, and we see a year-on-year growth of almost 30%-40% in the direct marketing of petroleum products. We also introduced some We have strongly gotten into the solvent business, primarily on xylols, MTO, and toluene. We are quite strong there.
Compared to last year, we have grown significantly, almost, I would say, near 100% growth in this space. We are touching 10 TMT per month of solvent segment also. The other products remain largely the same as last year because our product basket is fixed, so therefore it remains in terms of quantity, it remains the same. As I said earlier, there is an impact on the margins per se. However, we believe that this is a short-term event, and building a market at this time would help us retain a lot more customers when the situation normalizes.
Sir, any sense on the direct marketing number for petrol and diesel, if you can help with that?
See, direct marketing for We do not do direct marketing for petrol because it is not a direct sale product. I would say that the diesel volumes have grown tremendously in Q2. We are seeing a total sale of almost, I would say, 40 TMT, as opposed to 20 TMT in Q1. TMT is thousand metric tons.
Yes. Thank you so much for that. Sir, my second question was with respect to the refinery margins. I noticed that we used to report the refinery margins earlier, but we have not reported it, I think, in the June quarter and also in the September quarter. If you can help us understand that number a little bit, what was our refinery margin in this quarter, and how should we look at this metric going ahead on a sustainable basis? What is the number that we will be able to make on a sustainable basis in this environment?
Nitin, I think if you have attended or seen our previous call in January, we have taken a conscious decision not to publish quarterly GRM numbers. The reason was there is a huge difference in the way of the methodology GRM is being computed by different companies, and some of the other PSUs have also taken that. We will not be publishing GRM numbers on a quarterly basis. However, some of these numbers can be worked backward because we have already given our EBITDA and other details. Most of those numbers are already available in the market domain, investor domain.
Understood, sir. That is fair. Just wanted to have a sort of your thoughts on the outlook for refining. Like I said, what can we do on a sustainable basis in this environment? Cracks are very strong, but freight rates are also very strong. Then there is an instance of SAED that is there. If you can help us get some perspective around what we can do on a reasonable basis from our refineries.
A brief comment on the RTP, that is most of our sale is going at RTP level in the domestic market currently. Based on the current systemic agreements, we see movement in SAED, which is more in line with the international market. But the net cracks available is more or less around $20 above the average landed cost. Since it is an average for the entire industry, some are operating above average and some are operating below. Accordingly, the cracks applicable for us will be different. It will be different for each of the refineries and OMCs. Since the GRM methodology is not similar, some are including SAED, some are not including SAED, it does not make sense for us to publish any of those numbers on a quarterly basis.
Understood, sir. Thanks for the points. I will get back in the queue for more questions.
Thank you, Nitin.
Next question is from Mr. Dhaval Popat. Dhaval, you may unmute yourself and may proceed with the questions, please.
Hello, opportunity. Thanks a lot for the opportunity and congratulations on great set of numbers. My question is regarding, there was an article on Economic Times which restricted GRMs to $15 per barrel, quoting a senior government official. However, I understand the implied GRM for MRPL is already $14.86 or $14.9, broadly in this range, and for CPCL it is already above $15 per barrel. The clarification that I was trying to seek is that, hope there is no cap from the government side around this $15 per barrel number, or how does that work?
I've already Thank you, Dhaval. You are one of our regulars. Thank you for asking this question, and it's more or less a repetition of what I've already mentioned to Nitin, that the landed price and the cracks. That is determining the final numbers. It keeps varying. But yes, you are right. That range is more or less around that much. I've also said it is average, so some refiners would be above and some would be below. So obviously, there will be differences between one refiner compared to the other.
Okay, agreed. If I understand correctly, the next maintenance cycle, I know the throughput would be either close to Q2, but the maintenance cycle is only in March and April. There is no throughput as of now for MRPL. As in, there is no maintenance plan as of now for MRPL.
Yeah, that is right. Next is expected in next financial, early next financial year, maybe around April.
If I can just chip in one last question. I understand the complexity for MRPL is stronger than a lot many refineries in India, and as a result of this, it does take into account the fuel oil as well as vacuum gas oil to increase the distillate yield. During the current quarter, do you see that you have been including these intermediate products to increase the distillate yield? Should we be thinking on those terms, or any color in that reference particularly?
Yes, in the current quarter, we have a slight constraint in the product mix, but once that CHT is completely brought online, we will retain the full flexibility, whatever was available earlier.
Sorry, my question was regarding the secondary intermediates. You do use vacuum gas oil. You have previously used vacuum gas oil and fuel oil to generate distillate. Do we take those into account for this quarter as well, or how? If any color, otherwise, of course, I can get off, take this offline as well.
Mr. Deepak will, he would answer you.
See, we are always on the lookout for intermediates. That depends primarily on the available spare capacity with the secondary processing units. VGO and high-sulfur fuel oil have been our inputs in the past. We keep evaluating the market situations of the market prices of these intermediates on offer, and then we see if there is a processing capability that can match with the distillate prices that are on the market. As in the past six months, we have not had any requirement of taking in VGO or fuel oil, high-sulfur fuel oil, as intermediate products for processing. However, we are constantly evaluating market offers. We are in touch with other refineries within India for looking at the available feedstocks, intermediate feedstocks, just to see if we can maximize the secondary processing units. As of now, we do not see any immediate processing of these feedstocks.
Okay. That is helpful. Yeah. Thanks a lot.
Thank you, Dhaval.
Reminder to all the participants, you ma y raise your hands for asking your question, please. Next question we have from Mr. Kirtan Mehta. Kirtan, you can go ahead, please.
Thank you, sir, for hosting this call as well as giving us an opportunity to ask questions. Would you be able to give more color in terms of what kind of impact on the distillate yield we will have from the fire incident, particularly for the Q3 quarter? Would it be a couple of percentage points lower distillate, or would the impact be higher?
Thank you, Mehta ji. First, the generic question, I have already given it in the opening statement so that we are all at the same level of understanding, is that our Q3 total throughput is not likely to change significantly. Our product mix is slightly impacted because that particular unit was designed to process heavier crudes. To that extent, yes, there is a marginal impact. If that does not suffice, then I will ask Mr. Deepak to give a more elaborate answer.
It is still not worked out yet, sir.
Yeah.
The impact of it.
As Deepak said, it is a very marginal impact. If I had to add up a number to it, the impact on the total production could be maybe less than a couple of percentage points.
[crosstalk] .
In terms of the earlier, there was one question about the crude sourcing mix. You did mention that we have elaborated the crude sourcing to include West Africa as well as U.S. crude. Would you be able to sort of give us the percentages of different sources of crude? How much from Middle East, how much Russian crude that we have used, how much high-sulfur or sort of the heavier crudes that we have been using in this late in Q2?
The crude sourcing that you are asking, I can give you a broad outline for that. From Middle East, we were at about 20%, 21% for Q2. From domestic, we were at around 25% for Q2. Rest of the crude was coming from other sources, including the Russian balance. That was around 30%, 32%.
Sure, sir. Thank you. Just one last question, if I may. In terms of the retail outlet that we are planning to add around 500 outlets. Do we have a planning process with HPCL in terms of to optimize the footprint across the group, or is it done completely independently at the MRPL level?
See, it is generally handled independently. However, we are also conscious of the fact that HPCL is a group company. While we do the network planning, while we do not factor in the fact that HPCL is a group company, we do have an indirect consideration in certain specific areas. Being both suppliers as well as partners in the supply chain, we do do some amount of optimization between the companies.
Sure, sir. Thank you.
Thank you, Mehta ji.
If somebody want to ask a question, you may raise your hand, please. Next question we have from Mr. Harshr aj. Harshr aj, you may go ahead and ask your question, please.
Hi. Good morning, sir. Thank you for letting me to ask the question. Sir, I have one question on the product mix. In terms of the product mix, what we had in FY 2025, there was a drastic change in FY 2026, where petrol, the MS, HSD, and ATF share had approximately increased by 10%. For the first half of Q2 FY 2027, is it around FY 2026 levels or could be around somewhere closer to FY 2025 levels?
Product mix. I don't think there has been a major change in the product mix. Largely, we have been at the same percentage numbers with respect to crude.
Okay. I think from FY 2025 to 2026, the MS share had improved from 13.4% to 20%. Anything on that?
[inaudible]
You might be referring to MS plus Reformate in that case.
Yes.
Okay. This is again a matter of optimization. Again, if you look at the total distillate yield, it is a mix. Any distillate is generally a mix of MS to ATF range of products. Depending on the sourcing of crude, we may have to swing a bit lighter. As the Middle East crudes are a bit heavier, we would tend to produce larger quantities of middle distillates, whereas with other sources of crude, we tend to go a bit lighter. This could be the reason why you are seeing a change in the MS numbers, overall MS numbers, but it has not been to this extent of 130- 200. I would guess maybe 20, 30 TMT per month is the impact on account of the crude mix. However, I will get back to you with the exact numbers.
You can connect me offline, and I will give you the details of the numbers.
Sir, one more question I have is on the RLNG consumption during the first half of this year, and how much, at what potential it is there and where we are right now?
RLNG is something which we evaluate on a month-on-month basis, depending on the offers. Currently, the market is stressed, mainly due to the supply constraints, and the price levels are also at very significantly higher numbers. It is an economic decision for us to process RLNG. RLNG continues to be economical. We continue to take some quantity. However, the spot offers are significantly higher. Therefore, we have curtailed some of the RLNG processing in our units. However, we are always on the lookout for new sources. We evaluate new offers, and we enter into the market quite often.
Thank you, sir. Thank you. That is all from my side.
Thank you, Harshr aj.
Next question is from Mr. Bindu Kumar Gupta. Hello, and sir, you can ask your questions, please.
Thank you for the opportunity, sir. My question was related to exports. I understand that you are more focusing on the domestic side. Was there any exports during first half of FY 2027 by MRPL?
There were a couple of cargoes, primarily due to some issues with respect to balancing of the supply-demand issues here domestically. Domestic demand continues to be strong, and therefore, we are trying to divert all our molecules into the domestic market. However, if there are a couple of cargoes which spill over, due to specific issues in the market, we do export them. We anticipate that at least in the next couple of months, the exports will be low. However, on a structural basis, there could be some regular exports from MRPL. A couple of cargoes of diesel and ATF together would be the normal exports from MRPL. And of course, on the-
20%. 20% increase.
H1 was 15%.
H1 was 15%.
Quantity.
On a quantity basis.
Okay, and one more question if I may. How much was the SAED impact on that particular exports because we can compare across any value?
The SAED is a known number. I think it is published regularly. Whatever is the SAED number that is published, that is a direct impact.
[inaudible] . Thank you so much.
Yeah.
DSR also told, against Indra's question, the residual crack is what we are normally getting on an average. That I think should suffice the answer as well.
Sure. Thank you. Thank you, sir. Thank you.
Thank you, [Bindu].
Next question is from Mr. Dhaval Popat. Dhaval, you may go ahead and ask your questions, please.
Yeah. Thank you so much. The last time we had a call, there was a discussion around specific energy consumption. There was more power to be taken from the grid, which would have resulted in further decrease in specific energy consumption for MRPL. Just wanted to understand if there is a further development on the same. If I can just Sorry. If I can just-
Yeah, from only one question or more question?
Just one more I have is Sorry, broke my chain of thought. Please answer the first question, and I will come back with the second one.
Yeah. Energy consumption, the grid power project is, as soon as it goes online, it will lead to further improvement in our fuel and loss numbers. The current position is improving based on other efforts like reduction of steam consumption, normal ways, curtailing steam losses. We will be able to bring it down below 10. Once grid power is fully available, and it is expected by year-end, financial year-end, we will see a significant improvement in this.
Yeah. Okay. That is helpful.
If you remember last time, we have said that we are targeting about 9.5.
Agreed. Yes.
Let it stabilize, and then we should be closer to that number.
My second question was around, I guess this was already asked, but it is more of a follow-up. Given the middle slate between the ATF and diesel, and 2025-2026, there was a change in the product slate, like between ATF and diesel. If there is a significant difference, in case it arises, given the current situation and given Europe being an elastic buyer, in how much time or what flexibility does MRPL have? Within a quarter, can it be switched, or it is like a month, or how fast or how slow or how easy or how quick MRPL is able to do switch between ATF and diesel?
See, the swing capability exists. We can swing between products quite quickly. Even on a month basis, depending on the right type of crude, we will be able to swing quickly. The constraint would be on sourcing of crude. As long as we have the right crude for doing that, we should be able to swing pretty fast.
Okay. Yeah. That is really helpful. Thank you.
Thank you, sir. Next question is from Ms. Nidhi Verma. Nidhi, you may go ahead, please, for your questions. Nidhi, are you audible?
Yeah. Hi. Sir, I just wanted to know, you mentioned in your remarks that the Middle Eastern crude oil imports, the term contracts are evolving, and at the same time, you also mentioned about the higher freight rates and the intent of the company to switch to as much as possible to the DAP cargo. Are you negotiating with the Middle Eastern countries to have more oil on the DAP basis compared to FOB, which used to be the case until last financial year or this financial year?
Thank you, Nidhi, for the question. Yes, Middle East crudes, especially all the majors, they used to work on a very specific contractual basis. Now, we have seen certain changes from their own side, and that is not evolving into something new. That is, again, as I mentioned earlier, it is reactionary in nature. For a short period, we have seen the change in this methodology, including DAP cargoes offering STS, including there was a case of a sort of tender also being floated. We have seen these kind of changes being brought to the table, even by the biggies from Middle East. Yes.
Is this a temporary change that you are witnessing, or you are planning to go for next year term volumes also based on the DAP or factoring in the freight as well? Or you will be going back to the normal scenario?
Sorry. Please continue. Last I interrupted. Sorry. Please continue.
No issues. I am just keen to know, since the dynamics of oil world has changed now, are Middle Eastern countries more willing to offer you term contracts, including supplies on DAP basis?
Are you done with the question?
Yes, sir.
Yes, sure. Okay. Yes. This is both an opportunity, as well as an option to the current sellers. So far, they have not experimented, so that I will keep it as a personal comment. They have not seen the benefits of this. Now, this gives them added flexibility going forward. We cannot anticipate how they will move forward. But of course, learning from this experience, it will be built into their systems. That is our estimate for going forward, that some form of these variations which are being brought in now would be available in future also. To re-discuss, we would continue to insist on DAP cargoes. But going forward, we will evaluate purely based on our delivered economics when things stabilize. Hope that answers your question.
Yes, sir. Partly. Thank you.
You can always get back to us if you have some more detailed query.
Sure, I'll do that. Thank you.
Thank you, Nidhi.
Thank you, Nidhi. That was the last question for today. Thank you for joining us for this particular earnings call, and have a good day.
Thank you, everyone. Thank you for your continued interest in MRPL. You all have a good day.