Please note that this conference is being recorded. I now hand the conference over to Mr. Varatharajan Sivasankaran from Antique Stock Broking Ltd. Thank you, and over to you, sir.
Thank you, Sejal. A very good morning to all the participants and the management. I would like to extend a very warm welcome to all the participants for taking time out to be in this call, and the management for taking time out to present us the scenario for Q4. We have with us Mr. V.R.K . Gupta, Director of Finance; Mr. Pankaj Kumar, ED Corporate Finance; Ms. Srividya V, ED Corporate Treasury; Mr. Chandan Negi, GM Pricing and Insurance; and Mr. Rahul Agarwal, Chief Manager, Pricing and Insurance. I want to hand over the floor to Rahul Agarwal for his secondary announcement, followed by the initial remarks from the management. Rahul, please.
Thank you, sir. Good morning. On behalf of the BPCL team, I welcome you all to this Post-Q4 Earnings Call. Before we begin, I would like to mention that some of the statements that we will be making during this phone call are based on our assessments of the matter, and we believe that these statements are reasonable. However, their nature involves a number of risks and uncertainties that may lead to different results. Since this is a quarterly results review, please restrict your questions to Q4 results. I now request our Director of Finance, Mr. V.R.K. Gupta, who is leading the BPCL's team for this phone call, to make his opening remarks. Thank you, and over to you, sir.
Thank you, Rahul. Good morning, everyone. Welcome to the post-Q4 results phone call. Thank you for joining us today. I hope you were able to go through our results for the quarter. On the macro side, the IMF has revised global growth projections downward to 2.8% for 2025, from earlier projections of 3.3% and 3% for 2026, citing rising geopolitical tensions, trade disruptions, and associated spillover effects, particularly in the context of intensifying U.S.-China dynamics. Despite global headwinds, India is expected to remain the fastest-growing major economy, with projected GDP growth of 6.2% in FY 2025/2026 and 6.3% in FY 2026/2027, reflecting continued resilience and domestic demand momentum. India's GDP growth is expected to range between 6.1%-6.5% in FY 2025/2026, as per different agencies' forecasts. In 2024/2025, India's inflation rate moderated to 4.6%.
With global oil prices easing, the RBI has also lowered its inflation projection for 2024/2026 to 4% from earlier estimate of 4.2%. The INR and USD exchange rate fluctuated between 85.58-87.59 during Q4, averaging at around 86.62. In April 2025, the same averaged at 85.57, aided by weaker U.S. dollar, China's currency devaluation, new tariff announcements, and sustained FII inflows. In terms of crude, the IEA forecasts a supply surplus of 840 BPD in 2025 and 2026, the second-largest in the recent years. Meanwhile, global oil demand growth forecast for 2024 has been revised downward by 0.1 to 0.4 mbpd by major agencies, including the EIA, IEA, and OPEC, largely due to economic uncertainty from rising trade tensions. Brent crude witnessed a sharp seven-day swing in April 2025, triggered by fresh U.S. tariff announcements and an unexpected OPEC+ production hike.
Prices are expected to remain volatile, with Brent likely in the range of $68 per barrel for 2025. The IEA projects India to increase its liquid fuel consumption by 0.3 mbpd in both 2024 and 2026, up from 0.2 mbpd in 2024, underscoring India's leading contribution to global oil demand growth, primarily driven by rising transport fuel consumption. Domestic petroleum products demand grew by 4.3% in Q4, with petrol up by 5.9%, diesel up by 1.2%, and ATF up by 6.5%. Performance in Q4 of 2024-2025. On operations side, our refineries processed 10.58 million metric tons of crude, achieving 121% of name-plate capacity, and recorded the highest-ever annual throughput of 40.51 million metric tons. The distillate yield stood at 83.59%, and product cracks for gasoline in Singapore moderated to $6.02 per barrel from $6.44 in earlier period. For gas oil, $14.26 per barrel from earlier $15.05 per barrel.
Accordingly, our refineries recorded a GRM of $9.2 per barrel in the current quarter, at a premium to Singapore GRM of $3.16 per barrel. On the marketing side, our domestic market sales grew by 1.82% year-on-year during Q4 to 13.42 million metric tons, with record annual sales of 52.4 million metric tons. We achieved highest-ever sales for lubricants of 472 TMT, including sales from our retail outlets during the year. Under gas business, we have achieved a total sales volume of 2.2 MMT, up 13.9% year-on-year during the year for CNG, PNG, and bulk sales. We also commissioned two LNG stations at company-owned and company-controlled retail outlets in BP Avinashi, Coimbatore. This particular retail outlet has generated a sale of 71 metric tons.
We continued to lead our peers in retail outlet throughput, averaging 146 KL per month, compared to the PSU average of 130 KL per month, enabled by strategic market access and robust highway presence. In April 2025, domestic LPG prices were increased by INR 50 per cylinder, which resulted in a decrease in under recovery on domestic LPG. The current under recovery per cylinder is estimated around INR 170 per cylinder. The total negative buffer is on 31 March 2025, INR 10,446 crore. We commissioned 1,805 new retail outlets during FY 2024-2025, expanding our network to 23,342 outlets.
During the year, 5,546 outlets were solarized, bringing our total ROs solarized ROs to 12,000 ROs. We are aggressively expanding our CNG fueling infrastructure, with mechanical completion of 340 new CNG stations during 2024-2025, taking total CNG network to 2,370. We added 3,313 EV charging stations during 2024-2025, taking total EV network to 6,563 numbers.
We commissioned the Dimapur depot in Nagaland. This is our first pivotal depot in the Northeast, enhancing supply network connectivity in the region. In line with the government's aim to achieve energy security of the country, with the target of reducing import dependency by adopting biofuels as one of the measures, we have achieved the highest-ever 19.35% of ethanol blending during Q4 2024-2025. We are expanding our foray into non-fuel services at our retail outlet through our in-house state-of-the-art cafe brand, Be Cafe, where customers can experience gourmet coffee and snacks and, at the propensity of EV charging, gather momentum. Be Cafe would offer customers an upgraded convenience during their wait time. We have commissioned 105 Be Cafes during 2024-2025, taking total Be Cafe network to 111.
Updates and new projects: Bina Petrochemical and Refinery Expansion Project has made steady progress, achieving an overall progress of 11% against a scheduled target of 10.9%. All technology licenses and consultants have been onboarded, and process packages for all units have been received. Detailed engineering activities are in progress. Key tenders have been floated, and site enabling works are nearing completion. During the last quarter, the board has approved INR 6,100 crore towards pre-project activities, including land identification, feasibility studies, and environmental assessment for Greenfield Refinery Petrochemical Complex in Andhra Pradesh. The land acquisition and land procurement is in process. In continuing to the board approval in the previous quarter, BPCL and Siemens Green Hydrogen India Pvt. Ltd., a wholly-owned subsidiary of Siemens, have entered into a joint venture agreement to jointly pursue opportunities in renewable energy and green hydrogen and its derivatives projects across India.
This strategic partnership aims to support India's energy transition and developmental goals. Further, BPCL and GPS Renewables Pvt. Ltd. have entered into a joint venture agreement to establish compressed biogas plants across India. The joint venture will focus on converting organic biomass waste into compressed biogas by leveraging advanced waste-to-energy technologies. The joint venture plans to establish 8-10 plants across Bihar, Odisha, Punjab, Uttar Pradesh, and West Bengal over the next few years, which offer significant agri-biomass potential for CBG production and align with BPCL's existing geographical allocation of city gas distribution. In a positive development for BPCL Mozambique project, U.S. EXIM Bank, with the largest project financing commitment of $4.7 billion, approved the decision to continue its participation in the project.
Operator has informed that onshore main contractor , CCS JV, has issued full notice to proceed, effective 18 April 2025, to three key subcontractors to commence full scope of work. This action is intended to facilitate full restart and force majeure resolution not later than by July 2025. Without further ado, let me guide you through the financial highlights for the quarter. The revenue from operations stood at INR 1,26,865 crore. The profit after tax stood at INR 3,214 crore. Again, it's an estimated CapEx of INR 16,400 crore for the financial year FY 2025, where spent about INR 967 crore during this year. The capital expenditure expected for FY 2026 is about INR 20,000 crore. Our standalone net worth as of 31 March 2025 is INR 80,960 crore. The earning per share for the quarter is 7.52, and for the full year, it's 31.07.
As of March 25, the debt equity and at standalone gross borrowing leverage at 0.29. Overall standalone gross borrowings is INR 23,278 crore. We have current investments, including oil bonds, of about INR 1,490 crore. The debt equity net of current investments at standalone leverage is 0.13, and at group level, the gross debt equity is at 0.63, and net of investments, it is at 0.45. In order to reward our shareholders for their continued support, the company has declared a final dividend of INR 5 per share in addition to the interim dividend of INR 5 per share. This concludes my comments, and we'll be happy to take your questions now. Thank you.
Thank you very much. We will now begin the question- and- answer session. Anyone who wishes to ask a question may press star and one on their touchtone telephone. If you wish to remove yourself from the question queue, you may press star and two. Participants are requested to use handsets while asking a question. Ladies and gentlemen, we will wait for a moment while the question queue assembles. The first question is from the line of Probal Sen from ICICI Securities. Please go ahead.
Thank you for the opportunity. Very good morning, sir. Thanks for hosting the call. Firstly, on the refining performance, I just wanted to understand the components of this $3 plus premium that we have done. Is it fair to assume that there is some inventory gain that was there in the quarter? The second part of this question is, did we have, if we can just tell us what kind of Russian crude percentage was there even in fourth quarter in terms of overall crude sourcing? That was my first question.
Yeah. From the refining side, we do not generally calculate what will be the inventory gains because our average inventory is less than one month only. We do not calculate any separate inventory gains. Generally, in the same month, we procure, and our throughput will be completed in the same month. We do not calculate inventory gains separately. However, yes, definitely, the impact is mainly on account of Russian crude throughput and better refining margins. Q4, the Russian crude, how much? 24% we have processed Russian crude out of the total throughput. In Q4, the availability of Russian cargo, due to the new sanctions, we could not get the full cargo requirement. We have processed 20%. Over the current Russian cargos, we are getting sufficient cargos now.
That number has basically gone up in Q1, right?
Yeah, right. Correct.
The second question was about the expansion projects. In terms of the thought process behind setting up yet another greenfield refinery, can we just get a little bit of sense of what the configuration could look like? What kind of crude sources will be there for the refining and what sort of timelines we are looking at for commissioning for the Andhra Pradesh greenfield project?
Let me clarify. This Andhra Pradesh project is a refinery-cum-petrochemicals , not only a greenfield refinery. Refinery from petrochemicals with large petrochemical intensity. We are working two configurations. Either 9 MMT or 12 MMT, two trends we are working on it till the DFR studies are going on. With the 40% petrochemical intensity, we are planning broadly with 4 or 4.5 refinery products and around 3.4-3.8 petrochemicals. That is the basic configuration at 9 MMT trend we are planning. Parallelly, we are working for 12 MMT trend also. Based on the final detailed feasibility reports, we will take a call whether 9 MMT or 12 MMT. Still the work is going on.
Okay. One last.
Regarding timeline, yeah, timelines, we are working 48 months from the date of FID.
48 months from FID, as in when it will be done?
FID, we are expecting maybe end of 2025, maybe in the month of December or November.
Okay. Okay. One last question, if I may, sir. With respect to Mozambique, thank you for sharing that there is progress and there is forward movement. We have also taken an INR 17 billion impairment. Can we just understand which projects this impairment relates to in this quarter?
Every year, we do the impairment testing again at our investment. Generally, if there is any project delay expected, because in fact, we were expecting the removal of the force majeure in the last year itself. Due to various reasons, we could not uplift the force majeure. The operator could not uplift the force majeure. Due to which, actually, there will be slight impairment in the cash flows and valuation of mainly for Mozambique only. A little bit from the Brazil also, which has resulted into impairment.
So the Mozambique, so now, sir, we are expecting the force majeure to be lifted sometime in this calendar year? There's a decent probability?
That is what even in the recent announcement by TotalEnergy's CEO also, they were expecting the month of June, July, we are expecting. Because all contractors are onboarded, project financing is they have agreed for continuing the project financing. There are no hurdles now. At the local level, the security situation is much improved. Anytime, the work can restart.
Great, sir. Thank you so much. I'll come back if I have more questions.
Thank you and all the best.
Thank you. The next question is from the line of Sabri Hazarika from Emkay Global Financial Services. Please go ahead.
Yeah. Good morning and congratulations on a good set of numbers. Just a bit more on the refining margin side. We could understand, I mean, you have less than one month of inventories. Is it the same across all the refineries or for Bina it is higher? I think Bina reported GRM was close to $15. If I look into the various cracks and all, sequentially, it has come down only. OSPs have also expanded. Russian discounts have also fallen to 24%, like you have said, Russian crude share. Is it the same impact across all three refineries, or there could be something related to inventory, especially on Bina?
No, no. Actually, three refineries' configurations are totally different. For example, if you take Bina, Bina can take more low sulfur crude and more Russian crudes we can process. Whereas in terms of Mumbai refinery, Mumbai refinery, we cannot take more than 15% of Russian crude. That all depends on the refinery configurations. That is the reason always our Bina refinery GRMs are higher as compared to our own refineries of Mumbai Refinery. That is one reason. Second is, even the yields, if you see, the Bina diesel yield is more than in terms of percentage compared to other refineries. This always results into higher GRMs for Bina. It is an inland refinery. Inland refinery, if you see the structure, RTP structure, the realization will be slightly higher in Bina as compared to Mumbai Refinery.
Right, sir. In terms of refining margin guidance, if we consider these Q4 yields to, say, sustain over the next one year, are we seeing like $9 GRM, or do you think it could be some other range? I mean, some guidance on the GRM based on the current cracks?
No, it depends. It depends on various factors. One is definitely the crude prices and spreads. Even if we assume the spreads will continue at the same level, one can expect, one can give, actually safely assume, $7-$9 range of GRMs. If the spreads are continuing like this, if the Russian crude is available at 34%, if we can process and having a discount of $3-$4, which are the basic parameters. If these parameters continue, then definitely one can safely assume refining margins will be on a better side.
Right. Is $3 to $4 the current discount of Russia, or is it like?
$3, around $3. Around $3, you can take 3.1, 2.8, around. Every month, it varies. In the recent month, it is coming around $3.
Right. And this light-heavy sweet SAR, that has also become more favorable now that OPEC is raising production, or with respect to impact on Kochi refinery in particular?
Kochi refinery in a way, but definitely it will have a good impact on Mumbai refinery. Kochi anyhow, we take more ores only.
Okay. Mumbai refinery will see some benefit from increasing OPEC production? Hello?
Yeah, right.
Right. Just one small question on the marketing side. You mentioned INR 170 is the current under recovery, and I think LPG prices have also been quite sticky. It's not fallen to the extent crude has fallen. How do you see the overall cash flow scenario given that you'll be doing INR 20,000 crore number? Of course, now you're making exceptional margins in petrol, diesel. Any sense on are we at a comfortable level, or do we see debt going up or anything of that sort?
No. Even if we see for 2024, 2025, even after absorbing of LPG under recovery, our cash flow will be how much? Around 13 plus 2, 15, 22, 22,000 is the gross cash inflow, and INR 4,000 crore we have distributed as dividend. INR 18,000 crore is cash flow, and our CapEx is almost INR 17,000 crore. Similar level, even we have a good CapEx numbers for next year of INR 20,000 crore. We are hopeful there will not be any pressure on incremental borrowings. Maybe INR 1,000-2,000 crore here and there, maybe there may be incremental borrowings. At least this year, we are very hopeful there should be some mechanism in terms of LPG recoveries.
Right. Some action you were expecting in terms of LPG, right? Okay. Yeah, yeah. Okay, sir. Thank you so much and all the best.
Thank you. The next question is from the line of S. Ramesh from Nirmal Bang Equities. Please go ahead.
Thank you very much, and congratulations on your results. Sir, if you go back to the question on gross refining margins, sequentially, the GRMs have improved across all the three refineries. Is it a function of the yields, or is there some benefit from the secondary processing units or the crude slate? How does that explain that increase in the Q4 margins compared to Q3 of FY2025?
Yeah, a couple of things. One is, if you see Q4, our refinery throughput is almost 10.5 MMT. This is the highest ever throughput we have done. The plant reliability is much better as compared to Q3. There is no shutdown issues. There is no reliability issues. Our throughput is much, much better compared to any of the quarters. Second is, even the yield is on the lower side, but overall, due to the spreads, good spreads, and good diesel output in the entire product portfolio, we could generate good GRMs during this year. Russian, definitely Russian discounts have helped in GRMs.
Okay. If you look ahead to FY26, based on the current retail spreads and the current refining margins, is there any other lever you have in terms of growth in your EBITDA and profitability for FY26 as you look at the portfolio, including the industrial products other than petrol and diesel?
No, FY25, 26, everything depends on the crude prices how it moves. At least in the short term, three months or six months period, we are hoping the crude will be hovering at these levels only. There is no reason to increase the crude prices much beyond $70 levels, maybe a $65-$70 range or $60-$65 range. It will continue. As long as crude is at this particular range, definitely the margin side, it is helpful for the OMCs.
Okay. On the CGD business, can you give us some sense in terms of what are the asset capitalized and how do you see the P&L for the CGD business moving on the standalone GAs over the next one to two years?
Our total CapEx , expected CapEx for all the 26 GAs is put together, total commitment is INR 47,000 crore. This is over a period of eight years. Already till date, we have spent around INR 7,600 crore, already we have spent. This year for 2025-2026, we are approximate.
2,000.
2,000 crore we have capital for CGD business. One good thing is that in the CGD, the volume growth is very good. In the current year itself, 2024, 2025, the CNG sales itself is 81% increase in terms of the volume. This is one particular segment the volumes are growing. Our CapEx is also continuously as per the plan minimum work program we are achieving, at least in terms of CNG and industrial customers. We are a little bit behind in terms of PNG connection. The overall, we are expecting good volumes and good expansion going to happen in CGD.
Thank you very much, I'll join the queue.
Thank you. The next question is from the line of Mayank Maheshwari from Morgan Stanley. Please go ahead.
Thank you for the call, sir. Two questions from my end. One was related to fuel marketing. If you look at over the last year or so, you have seen a bit of a decline in your market share on retail fuel market, especially on diesel and gasoline. Even on industrial side as well, I suppose you have lost some market share. How are you kind of thinking about from a strategy perspective in terms of the next few years on the market share and where do you think you kind of settle it on the transportation side specifically in terms of market share for fuels?
Yeah. In terms of market share, Ashok, we have lost a little bit of market share in the last couple of quarters. If you see in the last five years, continuously our market share is growing. Competing in terms of offering discounts, we want to provide good service to the customers, and our objective and our strategy in expansion of the market share is mainly network expansion. What better services we can give to the customer, that is the reason on the highways mainly we are focusing on the network expansion. Recently, we have acquired almost 100 WSA sites, wayside amenities . It is a very large site where we can give good customer services. That is where I feel our focus is. We are sure definitely the market share will come back and we'll get our market share expansion going to happen.
Because if you see in the earlier year, maybe two years back, the private sector participation was not there when the margins are not there. Today, since the margins are very good, every private sector also, they are grabbing a little bit of market share. Our strategy is a long-term strategy is to expand our network and provide good customer services and take digital initiatives. Slowly, slowly, we will increase our market share.
Got it, sir. The second question was in terms of Kochi refinery on the petrochemical side, can you just give us details around how much EBITDA and earnings you made on the Kochi side on petrochemicals?
PDPP, the production during 2024-2025, 251 TMT, is almost 76% of capacity utilization. Last year, it was only 233 TMT, almost 10% increase in terms of the PDPP production side. Gross production margin per pet chem was around INR 579 crore, means it is additional $0.55 per barrel that contributed. PDPP petrochemicals unit contributed $0.55 per barrel for the refinery for two years.
Got it. Thank you.
Thank you. The next question is from the line of Sumeet Rohra from Smartsun Capital. Please go ahead.
Hi, sir. Good morning and thank you for the call. Sir, I would like to start by telling you that it's been a commendable performance, especially if you look at the LPG under recovery what we've absorbed. Now, sir, I have a question very clearly as an investor on this point. I mean, if you see in FY2024, we reported a profit after tax of about INR 24,000-25,000 crore. In this financial year, you've reported INR 13,000 crore after absorbing about INR 10,500. Sir, is my understanding correct that our profitability, including LPG, because obviously it's a control product for government, will compensate you? It's just a matter of time.
Can we say that now our profits have reset to a new standard and we can assume that the profits which you've reported over the last two years are sustainable profits over the next couple of years, sir? That's my first question.
Let me clarify. For FY 2023-2024, the profits are high mainly because of the spreads. That year, if you see, the GRMs are around $14 per barrel. That same, during the particular year, the Russian discounts are around $8 per barrel and the spreads are very high. I do not think that particular ecosystem will continue for a longer period of time. This year is moderated. In terms of spreads also, it has come closer to the last 10 years average spreads, it has come to that. Reasonably, the Russian discounts have come down to $3 per barrel. If these two parameters continue, definitely the refining margins will be better and the profitability, we can say, it has maybe somewhere around a better level compared to the early areas.
Okay. Sir, on the LPG under recovery and the compensation, can you throw some light on when do you expect some amount of compensation from the government, sir?
We are hopeful some mechanism definitely because after increase of INR 50, now the under recovery has come down every month. We are expecting around INR 650 crore-INR 700 crore per month for BPCL. We are hopeful some mechanism will be put in place so that maybe on quarterly basis, we can get the reimbursement whatever under recovery.
Okay. Sir, just one small point. When the Honorable Oil Minister had the press conference, at that point of time, he said that the LPG prices will be looked at on a monthly basis. Can we assume that we are going towards a period where LPG prices could actually be de-controlled once it's market aligned?
No, sir. Communication at this point of no such discussion at any level.
Okay. Thank you, sir. Wish you all the best.
Thank you. The next question is from the line of Somaiah from Avendus Spark Institutional Equities. Please go ahead.
Thanks for the opportunity, sir. First question is on the CapEx . Can you help us with the run rate? You said this year it is INR 20,000 crore. How will it kind of move in the next two, three years? Also in terms of projects, if we can give a broad split, Bina, where, how much have we spent so far? How much is remaining? For the greenfield, when will the CapEx start ramping up?
This year, our target for CapE x is around INR 20,000 crore. Maybe around INR 17,200 crore is the direct investment and around INR 2,700 crore is equity investment through our JVs. Current year run rate, we are expecting around INR 20,000 crore for CapEx . Next year for 2026-2027, we are expecting the CapEx will be INR 25,000 crore. In the subsequent year, we are expecting around INR 30,000 crore.
From there, I feel that peak CapEx for Bina refinery will happen. Otherwise, this year INR 20,000, next year INR 25,000, and subsequent year is INR 30,000. Broadly, the major CapEx investment will go for CGD and our Mozambique expansion and Brazil expansion and for petrochemicals. These three are major areas our CapEx allocation is going to happen. Current year, out of INR 20,000 crore CapE x, we have allocated around INR 5,900 crore for refineries and pipelines around INR 2,400 crore.
Marketing INR 5,600 crore we have allocated out of which INR 2,500 crore is for RO expansions. This is the broader capital allocation for this year.
Thank you, sir. One question. This 20,000, 25,000, this 20,000, 25,000, and 30,000, within this, are we including anything for the greenfield or greenfield will come at a later stage?
AP refinery, we are not including anything because once FID is approved by the board, then we will have the scheduled Capex plan. Otherwise, whatever numbers we are giving, this is excluding the AP refinery project.
Got it, sir. Sir, also on your crude sourcing, you did mention about the Russian crude sourcing mix change QOQ. If you could just help out with the other crude sources, let's say Q3 versus Q4, broadly, what was the mix change there?
Q3, Russian was 34% and Q4 is 24%. From Saudi, Q3 is 19% and Q4 is 21%, slightly 2% increase. Abu Dhabi 18 to 16, 2% down. Iraq is around 10%. Oman, Q3 is 1% and Q4 is 7%. US WTI, Q3 it was 13%, whereas Q4 it is only 5%. This percentage varies every quarter on quarter, depends on what commercially available crude is available. For example, if the Russian crude discounts are better and more crude is available, Russian will take more crude. If WTI discounts are available commercially, which is feasible for the refinery and which gives more value to the refinery, accordingly, we take those sources. These sources vary every quarter on quarter.
Sure, sir. The detailed breakup is quite helpful, sir. Just one small clarification on the pet chem margin, gross margins that you said. At EBITDA level, would it be positive? At gross margin, you said INR 579 crore. At EBITDA level, would we be positive there?
EBITDA level positive. EBITDA level definitely positive. After depreciation, including my marketing margin, it is positive.
Thank you.
Thank you. The next question is from the line of Vikash Jain from CLSA. Please go ahead.
Thanks for taking my question, sir. Sir, I have two of them. Firstly, on Mozambique, now that the project is possibly looking like it's coming back to life, assuming that the July timeline holds in terms of work starting, could you please kind of give a sense of how things are likely to progress in terms of timeline? We are looking at how many trains by when they are likely to come. Also, I mean, will we have to find fresh contracts or the old MOUs are still relevant, valid? Plus, very broad guess on how much has the cost escalation gone for the project?
One is on the contract side. Most of the contracts in the project side, it is valid as on date. Every contractor, they have agreed. The major contractor, they have given notices to the subcontractor to restart the work any point of time. On the project side, the contracts are valid. On the sale side, all SPAs are valid. Certain SPAs have been revised, but some quantities either operator has taken the commitment. On the SPA side also, there is no issue. On the project financing side, the major lender has also agreed, U.S. EXIM Bank. They have initially committed $4.7 billion. In the month of March, U.S. EXIM Bank also, they have agreed for continuation of the project finance. All the three are intact. Now, anytime they can restart the work. Project timelines, the operator is still committed.
Operator is confirming they can complete the project by July 28. That was the original schedule in the recent dates what they have announced. Maybe we have to wait and see after the restart of the project, they may give the revised schedules if any changes are there.
The likely CapEx inflation you would.
Initial project is approved at $15.4 billion. After that, one year back, operator has indicated the revised cost will be around $19.4 billion. That was the latest estimation they have given.
That's for how many trains? That's $10 million.
Two trains. 6.1.
$19.6 million. Right? Yeah.
No, no. 13.1. 13.1. 6.1. 6.1.
Okay. 6.1 and 6.1. That's.
6.5. 6.1. 13.1.
Okay. Okay. Sir, just on this, you're currently at about on Russian crude, you said about 24% is where you are. Now with crude prices themselves flirting with $60 or so, the Russian crude price is now well below the cap and all of that. How does that really change pricing over there? Does that automatically, since it's below the cap, it can be sold more freely with less of trouble and less of the worries on insurance, etc.? Does that typically impact the discount on Russian crude? I mean, does it take it down, I mean, over this period?
If the Russian crude is available less than the price cap, then there will be more buyers. Definitely what we are expecting, there may be a reduction in the discount. As I am there, still discounts are there. $3 discounts are there. Definitely, there are new buyers coming for Russian crude. In fact, recently, Turkey is buying more crude and Syria is buying more crude from Russia. The availability for Indian buyers slightly has reduced. That was the reason in the last quarter, it was 24%. Slightly this quarter, it has improved. We are expecting out of total throughput, maybe 30%-32% Russian crude still we can process availability point of view.
Okay. Sir, just last thing on, and I am cognizant of the fact that you do not calculate inventory losses separately. Just for our understanding, since GRMs have been and the premium to Singapore has also been so volatile in the last few quarters, you clocked about $9 this time. In the current market environment, how should we, I mean, are you in that ballpark even today in terms of how things have changed? We are a little surprised from $5.6 how things have jumped to $9 where Singapore has not really changed that much. I mean, just to kind of get a sense, is the current kind of margins tracking something similar? Of course, there could be an element of inventory loss which would have come up in April, but yeah.
Reasonably, the spreads are good. Even today also, the spreads are hovering at good level. Russian product is available. Only everything depends on Russian discount. If Russian discounts are still continued at $3, $3.5, refining margins will be better because our throughput of Russian is almost 34%. Other than that, everything is same. Our yield is around 84%. The diesel volume weightage is higher. Everything is same. No major changes. Yes, inventory, there may be some cargoes of old inventory may come into this particular quarter, one or two cargoes. I do not know exactly what would be the impact. Otherwise, things are normal.
Okay. Thank you so much, sir.
Thank you. The next follow-up question is from the line of S. Ramesh from Nirmal Bang Equities. Please go ahead.
Thank you very much for the follow-up. In terms of the impact of the increase in excise duty which has been absorbed by the industry, how would it impact your marketing inventory accounting? Secondly, if you look at the CGD business once again, is it possible to tell us what will be the delta in terms of EBITDA over FY 2026-2027? Will it be meaningful or will it be more like FY 2028 in terms of the forward estimates?
This revision which happened on the excise duty was post 31st of March. Hence, it will not have any impact. At least it did not have any impact on the results of the 31st of March. This is only a post-April event, and hence that has not had any impact.
No, I was asking more about the current quarter or for FY 2026.
Because the sale price is same, whatever excise duty, additional excise duty we have absorbed, because the margins will be lower.
Okay. On the CGD business?
CGD business, what was your question on the CGD business?
We just wanted to get an idea in terms of what is the delta in terms of EBITDA for the company from the standalone GAs in FY 2026 and 2027? When do you see that making a meaningful impact in terms of your results?
As of date, the EBITDA contribution from the gas business is not very significant because still we are in the CapEx mode and expansion mode. The volumes we are getting this year, we have in the PNG, I can give. EBITDA contribution-wise is not very significant. Only we have to wait and see maybe 2027, 2028, we are getting where we are expecting until our MWP will be completed and significant volumes will come so that we can have a significant EBITDA contribution from 2027, 2028 onwards. Otherwise, in terms of the volume, around 2.3 million metric tons of business we have carried out either directly in our GAs or in our retail outlets of other GAs, including the bulk sales.
Okay.
EBITDA contribution is not significant this year.
Okay, sir. Thank you.
Thank you. The next question is from the line of Kirtan Mehta from Baroda BNP Paribas Mutual Fund. Please go ahead.
Sir, for this opportunity, after the write-off, what are the carrying value for the Mozambique project in our books? What is the CapEx that we will have to contribute after the project start? Could you also remind on that?
For Mozambique, the total investment already we have made is $2.3 billion. Somewhat $19,000 we have invested. We have to invest around another $2.1 billion for the next couple of years. Majorly, the investment comes through project financing mode. With this, the total investment in Mozambique will be $4.1 billion. Carrying value, our impairment is against our investment. These investments are in various locations. Not only Mozambique, it will be Brazil, Mozambique, Russia, and UAE. Four major investments. Again, after all the investments put together, this is the impairment. Individual investment with carrying value will share it separately.
Sure, sir. Could you also update on the project status on the Brazilian project? When is the FDP likely to get approved and what are the activities which have happened there?
Tender they have floated, but tender is still not completed. Maybe June, July, they are expecting the tender will be opened. After that, maybe the FID will be approved.
Sure, sir. Thank you.
Thank you. The next follow-up question is from the line of Sabri Hazarika from Emkay Global Financial Services. Please go ahead.
Yeah, thank you once again. Two questions. Firstly, on Mozambique, like you mentioned, $2.1 billion. That is the gross CapE x of which there will be a debt component, right? That would be around 70%. From your side, the equity will be, like, say, 25-30% of that, right?
Right. Right.
Okay. Regarding your LPG losses, Q3 to Q4, the losses that you have reported are not that significant given the fact that in Q4 the contract prices have gone up seasonally. Did the company do some strategy in terms of optimizing LPG sales volume, something of that sort? Because it is coming INR 3,100 crore, INR 200 crore only for both the quarters. Have you done something to restrict the losses or something of that sort?
No, no. Similar trend. Similar trend. Maybe it depends on the volumes. Maybe more or less volume over, but otherwise, formula is same only. Same, same.
Because one of your peers, I think they have reported much higher, almost 20-25% increase in LPG losses QOQ.
It depends on the volume only. Maybe I don't know exactly others' volumes, but it depends on the volume only. Otherwise, same CP-based formula only. Sale price is same across the industry, and the CP-based landing is same for across the company.
Sabri, the CP has been almost around 620-630. That has been the range in the last six months. It's.
There is no big window for LPG for any optimization, doing any optimization.
Got it. Given the fact that oil has corrected to $60, we have seen LPG held up quite strong. Even the June contract prices are now just down $5. There have been reports that because of the U.S. tariffs and all, there's been a big readjustment which is happening on the LPG flows. What is your assessment in terms of Arab Gulf LPG versus U.S. LPG in order to reduce your own cost of buying LPG and thereby reducing your under-recoveries?
Most of the LPG and thermal contract mainly AG-based only, Arab Gulf-based only. Yes, we are seeing a little bit opportunities in terms of US LPG. We are expecting a $20-$30 per metric ton opportunity in case if we can do any optimization from AG to US. We are exploring certain cargoes where we can do the optimization. Wherever it is possible, we are approaching the suppliers and do the optimization. We are trying to do some cargoes under this optimization, shifting AG cargoes to the US-based cargoes.
Net benefit around $20-$30.
$20, $30 net benefit including freight and everything you are getting in U.S. products.
Right.
Okay. Okay. Fair enough. Thank you so much.
Thank you. Ladies and gentlemen, that was the last question for today. I now hand the conference over to Mr. Varatharajan Sivasankaran from Antique Stock Broking. What are your thoughts and comments?
You mentioned 340 outlets added during the year. As of now, what will be the net number in terms of our own CGD-based CNG stations and the total CNG stations, including the other GAs as well?
We have total 2,370 CNG stations as of 31st March 2025. About 840 are in our own GAs and about 1,530 are in the retail outlets in other GAs, other companies' GAs.
This 800-odd number, what you're referring to is your 20-odd GAs that we have.
Yes. That's correct.
That's correct. Very good. Thanks a lot. I would like to thank the management and the participants for taking time out to join today's call. Always a pleasure to have you. Thanks again and have a nice day.
Thank you.
Thank you.
Thank you. On behalf of Antique Stock Broking Ltd, that concludes this conference. Thank you for joining us, and you may now disconnect your line.