Ladies and gentlemen, good day, and welcome to Bharat Petroleum Corporation Limited Q1 FY 'twenty two Post Earnings Conference Call hosted by IFL Securities. There will be an opportunity for you to ask questions after the presentation concludes. Please note that this conference is being recorded. I now hand the conference over to Mr. Harsh Dolly from IFL Securities.
Thank you, and over to you, sir.
Thank you, moderator. Greetings, everyone. On behalf of HIAF Security, I welcome you all for Q1 FY 2022 post earnings conference call with Bharat Ekwilliam Corporation to discuss Company's performance and share the performance outlook. We have the senior management team today. The management team will be represented by Mr.
V. R. K. Gupta, CFO Ms. Jenny, DGM Pricing and Insurance Mr.
Girwar Bhattar, Senior Manager, Corporate Treasury and Mr. Piyush Morania, Senior Manager, Pricing and Insurance.
I'd like to hand over the line to
the management for their opening remarks, subsequent to which We can open the floor for Q and A. Over to you, Piyush.
Thanks, Harsh. On behalf of the BPCL team, I welcome 1 and all to this post Q1 results conference call. Before we begin, I would like to mention that some of the statements that we would make during this conference call are based on our assessment of the matter, and we believe that these statements are reasonable. However, their nature involves a number of risks and uncertainties that will lead to different results. Since this is our quarterly results review, please restrict your questions to the Q1 results.
I now request our CFO, Mr. VRK Gupta, who is leading the GTCL team for this call to make his opening remarks. Thank you, and over to you, sir.
Good morning, one and all. I hope all of you are keeping safe and healthy during the uncertain times. Welcome to the Q1 conference. BKL has been supporting the Government of India and the State Government In the fight against the pandemic, by taking various initiatives, we have provided vaccination logistics related cold chain equipment in Mr. Vijay and Haryana.
We have taken initiatives for providing PSA oxygen plants in Maharashtra, Kerala and Madhya Pradesh. Our refineries are regularly supplying medical oxygen to hospitals. Further, we have provided Acme and Cylinders concentrators and PPE guests to various front line workers. Going on to our results for the quarter, I hope you are able to go through our handout for the quarter. I would like to highlight a few points relating to the quarter growing by.
The second wave of code impacted the quarter, Q1 fuel sales for the financial year 'twenty one, 'twenty two. However, the impactings are much as compared to previous year of the Q1. They were prolonged to localize log bonds across the country. BP's LMS sales were higher by 39.37% as compared to Q1 of previous year and HSD by 24.9%. We registered number 1 in quarter 1 among OMCs in terms of the growth for MS and HSD when compared to quarter 1 of the previous 1.5 year.
Also, we grew the maximum amount of OMCs for LPGR also at 2.23% when compared to Q1 of previous year. Indian economy assumes to have a revised growth rate of around 9.5% in 2021, 2022 in which the agricultural, allied activity, industry and service sectors Thank you, sir. The growth of around 3%, 12.3% and 11.4% respectively. As far as MS growth is concerned, The distinct possibility of a tollway of COVID-nineteen, limited public transport and available disposable income will continue to drive personal mobility. Post CNG penetration of increasing the EV vehicles is also expected to increase, but freight transport will continue to be dominated by HFC as a fuel.
In case of ATF, we grew by 115% as compared to Q1 of the previous year, mainly due to the severe restrictions and domestic threat during major part of Q1 of previous year. Scheduled international affairs are yet to commence. Accordingly, ATF sales are yet to pick up, and we are primarily focused on the international segment of the business. Strong recovery in U. S.
And coupled with improving demand in Asia, including from China and India, has led to improvement in MS krat from around 5.66 barrel in Q4 And 28.05 barrels in Q1 2022 on a sequential basis. In case of Hitech deal, reduced Chinese exports balance Good global inventory position has led to moderate increase in activity cracks from $5.78 to $6.9 on a sequential quarter basis. When we compare Q1 of current financial year to Q4 of the previous financial year 2021, the Indian basket of crude oil increased from $67 To $67 from $60 The rupee has been hovering around $74 today. BPCL's stood at 4.12 Barrels in Q1 are compared to $0.39 in Q1 of previous year. The refinery throughput was at 99% of the nameplate during Q1 as compared to 70 5 percent during Q1 of previous 1, earlier year and 96% for the full year of 2021.
The refinery throughput has been aligned with the demand in the Q1 due to the severe second wave COVID. The discrete Yield in Q1 of current year is RMB85.49, which is almost similar to the comparable quarter as of previous year. For Q1, the revenue from operations stood at INR89,687 crores as compared to INR 56.17 crores for Q1, mainly resulted from the increase in the volumes as well as the prices. The profit after tax stood at INR 1502 crores compared to INR 20 7 crores in quarter 1 of the previous year. In Q1, we have made a step up acquisition and acquired the remaining stake of 36.62% in BRL from OQ for a consolidated Concentration of around INR239.26 crores, resulting in full control over the overall WBCL.
Against the CapEx target of INR10 1,000 crores during this financial year, We have almost spent around INR 4,001 crores. This includes the consideration paid to OQ around INR 2,399 crores. During the quarter past the day, we have added 130 retail outlets. We have added 2,444 outlets during the previous 10 10th calendar year. We continue to hold the highest throughput throughout the rate among the OMCs.
In terms of the CapEx, MSPP projects at Kukhirifen has been fully commissioned. The 2 out of the 3 major units of PDPP at Kochi Refinery, that is acrylic acid and naphthaol alcohol, has been commissioned And the 3rd unit Accurillates is under commissioning. Our borrowings as on 30th June 2021 significantly reduced from INR 26,000 crores level to INR 21,577. These are excluding the lease obligations amounting to around INR72900 crores. The liquidity ratio as I have said here at June At the end of Q1, it has improved significantly, and we are at 0.38 as compared to 0.98 in the Q1 of previous year.
As of the period June, we have around INR 233 crores outstanding which is received from Government of India. It is not a very significant amount. There is no under recode for SKO, PDS and negligible subsidy in LPG during this quarter. I now invite for questions and
for any clarification. Thank you.
Thank you very much, sir. Ladies and gentlemen, we will now begin the question and answer session. Ladies and gentlemen, we will wait for a moment while the question queue assembles. Our first question is from the line of Anubhav Agarwal from Credit Suisse. Please go ahead.
Yes. Hi, sir. Good morning. Am I audible properly?
Yes.
Great, sir. I just first question was on the other expenses. So compared to the previous quarter, the intensity of other expenses this quarter was little higher. Was there any one off in this quarter or was there any, let's say, extra spend on the refining of the marketing segment in this quarter?
There is no one off expenses mainly if you compare the criticals also, it was significantly as compared to Q1 of previous year. Even the volumes have gone up, even the refinery throughput has gone up. So correspondingly, definitely the transportation cost will go up as compared to Q1 of previous year. And differently related to the Fuel and cost and other things, potential fuel and cost. I want to focus on Q1 of previous year.
In terms of When you consider the quantity increase in terms of 23%, what are stage volume? Mainly on the front of transporting, there is a variable increase. There is no one off expenses. Okay. And second question was on
the personal cost. Staff cost this quarter was much lower. And is this a new run rate for us?
Hopefully, it is a new run rate because after taking the VRS during Q3 of last year, now the number of employees have also come down. Now we are at around 9,000 manpower, 9,207 something as compared to Levon, sir, on the manpower in the previous year, you're almost lean now. Most probably, it will continue like this only, not the cash.
Thank you, sir.
Thank you. We'll take our next question from the line of Amit Risthavi from UBS. Please go ahead.
Yes, sir. Good afternoon. Sir, could you please elaborate Is there any decision being taken on the stake sale in IGL and Petronet LNG before the transaction? Or the 2 entities will go along with the stake sale?
There is no decision taken as of date, but still we are working with Government of India to protect the interest
Okay. And sir, will this now lead to open In both the stocks given you would have applied to SEBI and some results would have come?
We'll not have received any response from JB. Still, we are working with government of India to protect the interest of the company.
Okay. And sir, coming to the Mumbai refinery, earlier we used to plan some expansion here in Mumbai refinery And with the integrated petrochemical complex in Rafayandi. So is this project still on or now that is It will be taken when the new management comes onboard.
Still in exploration stage only, that project. Still we have to see a lot of things, whether the feasibilities And taking up the view CapEx at this point of time, still an exploration stage only on the project
integrated. Okay, sir. Thank you.
Thank you. We'll take our next question from the line of Sabri Hazarika from MK Global. Please go ahead.
Yes. Good morning, sir. I have two questions. The first question is relating to your marketing segment performance. So I mean looking at the GRNs and the overall throughput, was there any pressure on the marketing segment During Q1 for BPCL specifically?
No. As such, there was no pressure. If you see last quarter, there had been increase in the prices, which was based on the increase in the Costs in the international market. So we have been able to pass on the increases. So there is no asset anything specific to BPCL.
Our prices have been in tandem with the market.
Right. And you would not be like disclosing inventory figures from now on, right? Can you give us some sense on
Inventory positioning is a part and parcel of the entire business. So it is not a correct view to be taken separating the inventory gain From the normal marketing operations gain or loss because many of the times what happens if you have any old inventories in your system, maybe you may not pass Sometimes if the prices are at a comfortable position, you can add more margins. So it is not right to separate the inventory gains from the normal budget, that is the view we have taken. But however, what we are indicating for Q1's marketing gains will be roughly around INR 800 crores in That's for the marketing gain, but we don't want to separate these marketing gains from the marketing margins.
Right. INR 800 crores of marketing inventory gain roughly you were saying could be for Q1. Okay. And IOCL generally gives a price lag and inventory adjusted GRM, which they say there is a normalized GRM adjusted for all the So do you have some similar kind of a figure?
Let me explain actually why there is no relevance for core GRM in respect of PPCL. So we see on an average we keep around 1.5 to 6 months here of crude inventory at both the refineries. Generally, the coverage is around 15 days. When the pricing structure of the crude is around 30 days average when we are keeping an inventory of around 15 days And we are following a FIFO based accounting policy. I don't think any inventory gain losses to be separated from the interme refinery calculations and the GRMs.
Logically, it is not a fair approach to remove the inventory gains because our inventory is only around 15 days only. Only those cases have done now the reporting If there is any crude write downs happen due to a group fluctuation, that's a great then anyhow that we reported as an exceptional item. Otherwise, in the normal circumstances, Our inventory is around 15 days. We should not have the CRM separately. That is the reason we have stopped calculating the core CRM.
And our inventory levels we can view even March 'twenty one our food inventory levels are around 1.53 MMTs and June also it will be around 1.59 MMTs. There are no significant changes In the terms of inventory position. Okay.
Okay. So fair enough. And second question pertains to your petrochemical segment. So The PDPP 2 units, as you've mentioned, has commissioned. And you have seen your depreciation also go up by 14%, 15%.
So has it been like partially expense in the P and L? And was there any income impact from that project? Very, very
Because these 2 units are under the stabilization, generally any of these large complex projects, it requests a little bit time for stabilizing. But definitely once commitment happens, we have to take the depreciation hit immediately. But otherwise, on the revenue side, very significant during this quarter, It will be less than INR10 crores only during this year during this quarter. But hopefully, once stabilization completes, we are expecting in the next 1 or 2 months, Then significant numbers can flow into financials.
And this will be reported as a separate segment, right?
No, not yet because this quarter is very small. We have to review in the subsequent quarter next quarter how it happens for reporting as a segment.
Okay. Okay. So thank you so much and all the best.
Thank you. Our next question is from the line of Aishwarya Agrawal from Nippon India. Please go ahead.
Yes. This is Ashwari from Nippon India Mutual Fund. I just want to understand that how As you people are very conversant with the existing infrastructure and the capabilities of the BPCL. So my question is, there are many activities which the company is not able to do because of being a PSU But going forward as we go for this investment and it goes into the private hand, What are the scope of value creation you have in mind?
Look, presently, even whether it is a privatization continues We have good CapEx projects in pipeline. And this year also we have taken up a CapEx project target of around 10% crore And the foreseeable future, NAKTI also more or less around the same level of CapEx project we have. And definitely, we are Seeing a little bit on the noncore areas, nonfreer businesses, but we are yet to explore That's about otherwise we have still good CapEx projects and mainly on the upgradation wherever we foresee any value in the refinery By incremental investments where we can upgrade the product portfolio, those things we are looking at it, those opportunities we are exploring and currently we are planning our
In fact, we have 2 projects in MR for optimizing the revamping the plans there, 1 KHT revamp and LOX revamp, which INR1200 crores, which is expected to come on stream by March 2022.
Yes, sure. And Is there any scope of cost reduction?
Cost reduction is a continuous exercise, continuous. Every year we carry out the cost On Kaul and pass to optimization exercises. Yes, we'll keep on optimizing wherever it is possible, wherever economies of scale is available accordingly, cost optimizing is a continuous
Sure. Thank you. I mean, I thought maybe we have some other things, which I mean, very I mean, absolute or objectivity in terms of what kind of cost reduction is possible, I guess that has yet to come up. Anyways, thank you.
Thank you. Our next question is from the line of Mayank Maheshwari from Morgan Stanley. Please go ahead.
Hi, sir. Thanks for the call today. I had two questions. One was more related to the Kochi refinery GRM. Is the improvement in GRM largely a function of the startup of the petrochemical project?
This quarter, it is not Significantly visible in terms of the JAM improvement on account of PDPP. The PDPP will continue very insignificant this quarter.
The PDP contribution, as sir said earlier, is around less than INR 10 crores. And we have 3 units, 2 units has been commissioning and it is getting stabilized. 3rd unit, you have 2 trains that is the acrylates unit. You have 2 trains. 1 train has been commissioned and 1 is on the commissioning stage.
So the stabilization process will go on in Q2 also. Post that, we should be seeing a ramp up in production. And you also have an MSPP project in Kochi, which has been commissioned during the quarter one fully.
Okay. So just to kind of get some clarity in terms of how do you think about the utilization rates for the acrylic project, etcetera, by the end of the year?
It would be difficult to give a projection by end of year at this point of time.
See, these are NIS Petchem units, so the stabilization will take some time and support from the licensor, and it is right now being done virtually. So it will take a little time for the ramp up to happen. So we won't be able to give any production figures as of now.
Okay. And my second question was more related to if you can give
us some Idea in terms of your alternative energy plans around gas, EVs, hydrogen, etcetera, if you can just give us what is BTCL doing around that front?
So gas, we have interest in 17 geographical areas where construction is ongoing. In around 8 GES, we have already started CNG supply. So altogether, in under BGRL, we have spent around INR 800 crores CapEx and in the Q1, it is around INR 150 crores CapEx. And on the EV front, we are on pilot basis, we have started EV charging stations in various states And also battery swapping facility in 2 states. These are on pilot basis, and we are just looking at incremental learnings from these activities.
And also I'd like to add that further in our existing retail outlets also we keep on adding CNG facilities. So In the round 637 number of retail outlets, we have CNG dispensing facility also.
Got it.
Thank you.
Thank you. We take our next question from the line of Vinit Joshi from Goldman Sachs. Please go ahead.
Thanks a lot for your time, sir. So I just wanted to check what has been the cumulative investment in your petrochemical business Now that a lot of the capacities are closer to commissioning, can you also help us understand what could be a normalized EBITDA that you can generate from these investments, a ballpark number, right, because this is something which haven't we haven't really modeled. So any understanding of that range will be quite Thank you.
So for PDPT project, the total CapEx is INR 6,285 crores, which is under commissioning as I was saying earlier. And the incremental GRM at current prices will be a minimum of $1 on a full year basis. Beyond that, we'll not be able to comment on the Pet Chem Margins assets.
Okay. So This will be
captured fully in the refinery business. And this $1 is on an overall VPCL throughput, right, including Bina as well
now or?
Yes, we are looking at refinery level.
Yes, refinery level, but marketing too, we are too yet to get experience of Marketing the petrochemicals, maybe in couple of quarters we'll get a good experience of the marketing of petrochemicals, then we'll be in a better position to tell what would be the contribution in terms of the marketing of The financials probably that is what we are looking at it.
This $1 is for Kochi or is for the whole of PTCL, sir. And this is This is net of the cost? Okay. And this is net of the cost, right, because your cost will also be going up with the complexity, Okay.
This is at GRM
level, yes. At GRM level, at GRM level.
Okay. And what will be the
cost increase? Because I'm trying to understand at the EBITDA level, What will be the improvement?
EBITDA level will be difficult because already depreciation you have seen around 170,000,000 or 150,000,000 gross depreciation per quarter. But we are not through EBITDA level, we are not to work out anything at this point of time. But overall, GRM level may GRM at least $1 we are the reward we are
Okay. Thank you, sir. And sir, can you tell us what is your hydrogen producing capacity in your refineries? You must be producing some gray hydrogen. And do you have any plans to convert some of that into green hydrogen or blue hydrogen in future?
Is this something that you are looking at?
Hydrogen, whatever is being produced in refineries right now is being used within the refinery. Also, this MSPT The project will also add some incremental hydrogen to the system, which will be again used within the refining premises. We, as such, don't have any proposal to Market is hydrogen as of now. But of course, going forward, we'll look at that as an opportunity.
Okay. Thanks a lot for your time, ma'am. Thank you.
Thank you. Our next question is from the line of Vidyadarkinde from ICICI Securities. Please go ahead.
Yes, thank you. My first question is on Bina, if you could share with us the GRM and the profit loss for the quarter.
So Veena DRM is $5.2 for the quarter one and it's
a loss of INR 64 crores.
How much?
INR 64.
INR 64 crores loss. Okay. The second question was on the what is the what is your volume? Have volumes done in July and if you have some data on August on petrol and diesel, what was the indications?
July figures, I'll share with you. July 21 versus July 20, if we do, there is increase of 21.50 percent for MS, While for SSD, it is 11.68%. LPG is 6%, aviation is 16% Overall, that's it. And on overall basis around 14% there is increase.
Could you compare with give us with versus 'nineteen if you have?
Yes, 2019 figures for MS, there is a growth of around 5%. For SSD, it's around 8%, still negative. Yes. And for LPG, it's a growth of around 10%. Overall, portfolio wise, there is reduction of approximately some 6%.
Okay. Lastly, if you permit, just wanted to express from you on this sharing of inventory gain and loss. One that I think most of us at least I calculate make our my own assumptions if you don't disclose, I disclose my estimates in the report, Which I think investors want to know on. So we will if you won't give us, I think multiple analysts will give different numbers in their reports. Secondly, if you look at 3 other peers of yours in the sector who have also stopped disclosing, one of them has even stopped disclosing GRM.
If you look at So I'm not very sure not disclosing will help.
I think next time there
is a big inventory loss, you guys will probably say this was the inventory loss I just want to suggest that you should have a relook at your policy. I don't think it is going to really help with investors.
Not point of actually disclosure or not disclosure whether how the stock prices will move. What we are having a view, for example, I already have explained in terms of declaring for refining side. Because on average, any refinery holding an inventory of 15 days, I don't think there is a concept of any supplier calculation for core GRM when your purchase prices are on average of 30 days basis benchmarking prices. Only any sudden fluctuations, if there is any inventory losses for the reporting period, definitely that we report it in terms of refinery. In terms of marketing, already I have indicated around retail.
Correct. Here also we are having a view, it is not right to separate the inventory trading gain losses from the normal marketing margin because it's a part and parcel of the overall Because your partners sponsor the overall weakness, that is a view from our side.
Sir, the only point I'm making is that at least some of us We'll give our own estimates even if you don't disclose. So different numbers we're floating among investors of estimates of investors. Fine
noted. Fine noted.
Thank you, sir.
Thank you. Our next question is from the line of Nitin Tawari from Yes Securities. Please go ahead.
Good morning, sir. Thanks for the opportunity. So my first question is a bookkeeping one. If you can give us the breakup of CapEx in this quarter In terms of segments and also for the entire year, what are your plans that can be broken up in segments? So that is 1.
Okay. So I'll answer to your question, Nitin. So for financial year 2021, 2022, for refinery, it's around INR 2,600 crores For petchem, around INR 950 crores for marketing, it would be around INR 33 100 crores equity investments in DPL some INR INR 13 100 crores while remaining ones for INR 17 100 crores. So overall, it comes around INR 10,000 crores of CapEx For 'twenty one, 'twenty two.
Okay. And the INR4,000 active spend in 1Q, how is that working?
Yes. So From that, around INR 24,000,000,000,000,000,000,000,000 is for BORL itself and some small investments. For BPRL, further investment of INR 400 crores. For Refinery, it's around INR 450 crores and marketing, it's around INR730 crores. So overall, it comes to INR 4,000 crores.
Understood. And my second question is Around lubricants sales. So what was the lubricants sale in this quarter? And how did it like now perform as compared to March quarter and June quarter last year?
See, lubricants numbers as such, the increase is of some 96% in comparison to the last quarter. That is Q1 of previous year.
Any number that you would want to give in terms of the volume that we sold Quantity in this quarter?
No, no. Those numbers are not Numbers, we can share offline.
Sure. No worries. And one more, if I may, question just please. So let's know when we were planning the Fochi expansion. So at that point in time, the guidance call is On that, we are going to see improvement in refinery margins other than the ferrochemical projects also.
But what we have observed over a period of time is that Kochi refinery margins more on a larger basis are even lesser than the Mumbai refinery margin. So what is the reason behind that? And let you know, is that Okay, Nom, which is going to continue and I'm saying ex opetrolimical projects.
If you see last 2 years actually due to the COVID, we are not up to the full potential of the physicals. Maybe we have to wait and see once we reach the full potential of the physicals. So then we can find out what exactly the envisaged benefits we have expected from the Puxi refinery and whether we are realizing MRs. There are 2 points. One is the brand One point.
The second one is the Criticals as long as Criticals we are not getting the full potential, so we cannot comment anything on this performance as a quick reference in terms of the So the project execution estimation.
So when you say you're not realizing the full potential of Cochin Refinery, what does
In terms of physicals because due to the demand still the demand is pick up last year and current year. So once the physicals come back to the normal levels of peak, we have I think throughput 15.8 something in 'seventy 'eighteen, 'nineteen throughput, we
have to Yes.
So our throughput to us, and if you see in the first Quarter was only 88% of the nameplate Lecture capacity.
So we can go up to 115%, 120% also we have gone earlier here. Maybe again after the complete reversal of the COVID impact or maybe we have to relocate it and we can give any numbers on this.
Sure. Thanks for taking my questions.
Thank you. We'll take our next question from the line of Rakesh Sethi Tia from HDFC AMC. Please go ahead.
Yes. Hi. Thank you for the opportunity, sir. I just wanted if you can help us understand Where we are in terms of privatization process and what BPCL is the role BPCL is playing as of now. If I understand correctly, I think last quarter, we were updated that the data room has been opened and VPCL is So any update for the 2nd that would be helpful.
Only for any update as
the update we have a very limited role in this entire process. Like last quarter, what we have said is that data room was open. There were queries we have received from the bidder and the process is going on. We have prepared for some queries and some queries we are at to replay. So from BP, sir, said the process is going on, but all other processes only Government of India, Deepamindra is only handling.
Our role is very limited in this.
Sir, do you direct
so when
the queries come, does those queries come directly to you from the bidders or it's come via Okay. And sir, you commented about this inventory gain in losses and one comment you made that crude prices Arjesam, thank you.
Did I hear that wrong?
I thought crude prices are taken they are benchmarks on a daily prices, maybe you'll have some average. But now are
we saying But now, are we saying What are the procurement on term basis? Even start also, most of the pricing is based on the 30 days average benchmark. So there is no daily price fluctuations will have my procurement on daily basis. Whatever during the entire month, whatever I purchased the benchmark applicable prices for the So that is the case when we are having an inventory of 15 days, So we do not pay to calculate anything on account of inventory gain losses and for Only as I agree, reporting term, if there is any shut Yes, we have to report it. That is what we always report over what is the negative write downs.
Is there any certain fluctuations happen
So pardon my understanding, but if I understand correctly, those benchmarks could be, let's say, Brent or Dubai. And when the average is being done, anyways, those are daily averages, right? So effectively, you are paying nothing but the average price for the month in some sense, unless you have Different points of crude sourcing at different point of time.
Is that understanding, correct?
That's already very small. The maximum approximately our monthly average pricing only.
Sir, the limited point would be the reason we asked for inventory gain and losses would be to look at the operational performance, Which would mean that let's say to compare the refining margin, what was your gross margin for any particular asset you would have? We would need to know what was the average realization during that period and what was the average normalized cost for that period. And I understand that there is There's a pricing lag and there's inventory lag. So we thought that because ISL was doing in the past and you were also doing it was helping us to Get a better sense of the call profitability. So I would still urge and request you that if you can relook at your policy
Okay.
And try to get a better sense of
Our view is same only because I come out to IOC. IOC, the number of this inventory holding may be differently Hi, Yirthanvishal. Because as a whole over, when we are keeping a 15 days average inventory and we are following a FIFO basic accounting, I don't think any separate calculation and separating the inventory gain also from the normal GRM calculation. It is a different picture, if you will. My performance evaluation We at GRM level only, and we are keeping around 15 Nationwide.
That is our view, but we'll see.
Understood. Sir, my last question on the In the petrochemical, the $1 increase expected increase in the Kochi GRM, that is just On the refining side, and there would be some EBITDA contribution from petrochemical as and when the volumes would flow. That understanding is correct, right?
Yes, right.
Understood. Thank you very much.
Thank you. Our next question is from the line of Arun Kumar from AB Investments. Please go ahead.
Yes, I just have one.
I just have to question first regarding the DRM.
Sorry to interrupt. Ms. Arun Kumar, your Voice is not clearly audible. If you're in a speaker mode, can you switch it to handset, please?
So I wish to ask like The earlier there was certain restriction on price movements in the early Month of February, March and supposedly May as well because of the election. So price movements of Daily price movements were not happening at that time at least. And now the at least from the government side, the petroleum Margins, petrol margins are like you are free to increase the prices on based on the international prices. So would there be any GRN gains? And what is your outlook for the coming quarters
You have to see the margin retention and outlook on a longer term basis. We cannot compare only intermediate periods of 1 month or 15 days. So on an overall basis, we look at it, we can maintain the same similar level of margin
Okay. And You can
experience 1 month or 2 months?
No, on quarter on quarter basis, yes.
Even quarter on quarter also, we don't see. Overall, for a particular year, we can see, hopefully, We can have a similar level of margin, that is what we look at it for a yearly basis.
Sure. And any updates on this investment? When can it be
I already clarified. Our role from the PCL side is very limited. Whatever media reports are coming in the last couple of days, the same
Okay. Thank you. That was all.
Thank you. Our next question is from the line of Swati Gun from Invest Yagna. Please go ahead.
Yes. Hi. Thank you for the opportunity. Hello. Can you hear me?
Okay. Please go ahead. Yes. I just wanted to know information about The GRM and how would be the expected GRM? What will be the expected GRM?
So, GRM for BPCL for the quarter is $4.12 for Mumbai Refinery is $4.35 and Kochi Refinery 3.90. And for BORL, which we have now fully controlled, from 30th June, it is 5.2.
Okay, fine. Thank you, ma'am. Thank you for answering.
Thank you. Our next question is from the line of Kiran Naik from Modi Fincher. Please go ahead.
Yes. Thank you for giving me an opportunity, sir. Can I ask a question on this investment?
Yes, go ahead.
Yes. Sir, the government is trying to sell the BPTL company as a whole to any one stakeholder who is putting the giving a good tender. So you'll be selling the land also which the federal funds are on in the cities on that land also will go with that parcel?
Government is proposing to sell their entire stake. And when they say entire stake, means the entire assets are liabilities with the same The entire stake they are going to sell. That is the proposal. They are not proposing anything to sell specific assets or specific liability set up and other things.
The plan also will be get sold with the tender, right?
Definitely, let me get you. I don't know why this doubt has come. When they are selling the entire stake made, entire stake.
Okay. Thank you, sir. Thank you.
Thank you. Our next question is from the line of Dhartharajan Srivashankaran from Antique Limited. Please go ahead. Thank
you. So during the briefing, you mentioned something about the under recovery part of it. So you said there was 0 under recovery on kerosene as well as LPG during the quarter, is that what you mentioned?
Right. Right. Okay. LPG. LPG.
So LPG, like you know, was there any under recovery during the month of June or was it more like a Overall for the quarter you are mentioning there is not So
far under recovery because placement under recovery sometimes if you don't have any product in certain pockets of supply zones, You have to move product from 1 June to another June, maybe a little bit under exposure will be there. But overall, the subsidy portion will be insignificant during this quarter and the SKO will never deliver on the recovery. So
I would assume that there is 0 outstanding with
the government or is there
something pending for the previous quarter?
As I said, around INR 233 crore total outstanding from the government Yes, I thought of various crises.
So one last question on this LPGA. Is there any explicit Instruction or guidance from the government regarding this LPG compensation for the rest of the year?
Nothing, nothing. No more of guidance.
Okay. Thanks a lot.
Thank you. Our next question is from the line of Pinakin from JPMorgan. Please go ahead.
Mr. Piyush? Yes. Thank you very much. So my first question is Now given that BORN is 100% owned by the company, going forward, will it be part of the standalone accounts or will it
be part of the console accounts with disclosures?
Still it is a separate legal entity. It becomes only fully controlled by BPCL entity. Till we have any other plans, still it will be a separate standalone and VPC will be a separate standalone. Only Only in the consolidated account, definitely there will be a $9,000,000,000 consolidation become it becomes subsidiary.
So, sir, there are no plans to merge it within BPC as standalone entity. Are there no advantages for merging?
Yes, we are exploring. There may be some synergies definitely if we merge it. So we are exploring at right point of time, we'll communicate
So my second question is that the petrochemical complex is expected to add dollars to GRMs. Now going When the Kochi refinery upgradation was done, there were expectations that it will add $2 to GRMs, but we did not see that come through. So in terms of the petrochemical addition to GRM, how confident we are? Or what needs to happen in the external environment For this incremental margins to be realized?
So we this incremental $1 CRM is based on the current price trend. So if the prices hold with the current cracks, yes, we expect it to have this kind of a GRM impact. But prices, we can't nobody can focus. So we have We'll have to see.
So ma'am, when you said prices, do you mean for which products prices need to hold at current level?
The prices for products of acrylic acid, ochroalkols and acrylics.
Understood. So at current prices, if they hold, then we can see a dollar of GRM incrementally? Correct, sir. Understood. Thank you very much, ma'am.
Thank you. Our next question is from the line of Manikanta Garey from AXIS Capital. Please go ahead.
Good morning, sir. Thanks for providing me the opportunity. So I had two questions. First one is on the EVs business. You mentioned that you're doing some pilot addition EV charging stations and chargers starting additions.
So far, we have noticed that IOCL and HPCL has announced some partnerships with the likes of Tata Power or anti PC power grid and some OEMs, but we have not seen any such announcement So, do we assume that this kind of announcement can come only after this investment? Is it that the case? We are exploring
entire value chain of EVs. Only on pilot mode only, very small scale, maybe we have done some locations battery swapping. For a large scale, any tie ups and other things still we are exploring the entire value chain, Then Akaradu will come up
our strategy. Also, this
EV scenario currently is in a very nascent stage, especially in Country like India. So, primarily, we are doing all this to just accumulate the earnings from the Changing evolving EV scenario. But definitely,
we are also focusing. We are not ignoring this.
So to understand it correctly, you're saying the large scale tariffs cannot don't have to wait for the disinvestment. Is that correct understanding? Right, right, right,
Okay, sir.
My second question is on the Mozambique LNG project. Is there any update? Because looks like last week there is some progress on that. We can provide some color on the Ponsonby Calangi project, where is it used currently?
Yes, there is a small progress in terms of capturing the area by the different forces That is what we understood. And in terms of the force majeure, there is no update on the force majeure removal till the force majeure is continuing. We are expecting some things Maybe from the lead operator, but other risk force majeure is still continuing. But in terms of the capturing of that area by the different sources, that is what we got from use. So it has been captured by different sources, Have I created our 4 earlier ICs?
Right. So the 6 to 12 months force measure
is still in place for Jatin, right? Right.
I understand. Yes.
Okay. Thank you so much, sir.
Thank you. We'll take our next question from the line of Sumit Rohra from Moxon Capital. Please go ahead.
Yes. Hi, Tom. A very good morning to you. Sir, my question is a follow-up to the one which you've partially spoken about. So I mean this is on the strategic sales.
So if my understanding is correct, Mr. Pandey has gone on record and Sir, Jadimati, you would like to complete BPCL and Air India in this financial year. Now sir, we've, as investors, basically been attending BPCL calls. And what you need to understand was that it takes about 5 to 6 months after the financial bids have been received to complete the transaction because of It's like your open offer along with your the Rieti Brothers study approvals and TCI approval, etcetera. So, sir, if what Mr.
Pandey had said, so if you then back calculate then, is it that the financial bids You now should be invited in September. And secondly, sir, on the data room window, which has been opened on April 10, when are we planning to basically Close this, what's the room, sir?
Honestly, we are not aware any of the schedules when the financial pit will open and other things Because I have already explained our role is very limited. Data room, we are giving the data, we are submitting the data and whatever queries we are getting, we are replying the queries. But we are not at decided anything when we have to post the data room window. This entire process is going on because the transaction advises when they are giving the pullings, we are replying. On other Securitas, we don't have any information.
Okay. No, sir, because
the only reason I ask is, as investors, it's quite ambiguous because we don't get any So, it's quite ambiguous because we don't get any updates on these kind of major events which are happening within our company. So, It's obviously but natural to ask you. And if you can just get some more information for us, that'd be very helpful, sir.
Definitely, definitely. We'll try. In case if anything is available, We'll hear.
Thank you, sir. Thank you so much.
Thank you. Our next question is from the line of Soumit from Capital Mine. Please go ahead.
Hello. So I just had one query. So there have been talks with the city and distribution companies on revision of their the margins that you guys earn from Selling the gas in your petrol pumps. So what has been the update on that? What is the current margin that you're earning?
What is that you're expecting from the City Gas Distribution?
Sir, there has not been a particular any form outcome from this exercise. So we won't be able to comment.
Okay. So what is the current margin that you are earning there?
We won't have this number. We can take up this question offline, please.
Okay. Thank you. That is good.
Thank you. Our next question is from the line of Gagan
We, at the end of the quarter,
I mean, dollars per barrel?
Dollar per barrel code inventory is $20.
Okay. And at the start of the quarter?
P. Vijay Kumar:]
I mean, at the start of the quarter, what is the food inventory?
Hello?
Yes. Yes. You got the numbers, right?
Yes, yes, yes. Yes, Sir, I'm asking that, I mean, at the end of this March quarter, what was the value of the crude inventory?
64.72.
Okay, okay. Okay. And my next question is about is this regarding the Nualikar Refinery expansion, although now it's not the part of the BPCL. Yes. But is this DTCL fully committed for the this extended test steel offtake from the Maliga?
Yes. We have a 15 year agreement for taking products. So our Eastern region is fully covered for product supply.
Okay.
So, Ethel, I understand is that this I mean, increased Supply would not be covered by the Nokia itself. I think you need to move out that product to the mainline India. So I think there is a substantial cost is involved. So is it the whole cost would be expected to be here by the BPCM for product move back outside the Northeast or it's something sharing basis Among both of you.
And we need to come back on this, so we'll come back separately offline.
Okay. Thanks for my question.
Thank you. Our next question is from the line of Vishal Tanpil from ValueQuest. Please go ahead.
My question on the front of LPG business. So as per the LPG rules expansion that Only government companies can receive LTVs from Gail and everything. So once VPC becomes privatized, Then what could happen? Then they will be able to take LPGs from Yale or something or they have to take from private sources?
We don't know Government of India is working something, but we don't know.
Okay. Yes, additional comments.
Thank you. Our next question is from the line of Amit Rastadi from UBS. Please go ahead.
Yes. Sir, could you give us the debt numbers for Binali family now after it is fully acquired by BPC?
In our debt is around INR 7,000 crook.
Okay. And now Will it be merged with BPCL or it will continue to remain or operate as wholly owned subsidiary?
We are exploring.
At this point of time, we will
take the decision and the caller will share that information.
Okay. Thank you, sir. Best of luck.
Thank you. Our next question is from the line of Vijjad Dardimel from ICICI Securities.
On the SPEChem project you have in Kochi, so the feedstock is Propylene? And so the GRM which you are talking of is basically based on the track which you make on the propylene. Is that correct?
Yes.
So yes and the margin between propylene and the petchem product will be captured in the petchem segment as and when you reported as a separate segment And not part of the area?
If we decide to separate it and show, yes. Otherwise, we as of now, we will be part of the normal
No, Bryan, secondly, now with this project, once it's fully commissioned, what proportion So, your refinery product slate will be propylene? And was it so it's basically your product Slade shift is from naphtha to propylene, is it? What was earlier naphtha is now will be propylene? How is that? How does your product slate change?
So from the P FCC unit of IREP, 250 TMT of propylene is going to the PDP unit.
Okay. That is the yes, yes, correct. So 250 a year TMT is your share in the product Okay, okay. My second question is on Bina. So Bina's performance has not been great, and I'm sure because when it
was a subsidiary, you had a
lot of constraints. So I'm sure you have some plan in mind. Do you see things improving significantly now that you have full control? And If let's say in the Q1, it was it had been merged, if it had been merged, given some of the taxes you may have saved, Could you give us some idea on the kind of benefits you would have if it is merged in terms of savings, in terms of I think the CST or some So my growth benefits problem.
Currently, we are also hopeful. Definitely, there will be an absorb rate. But we have to still explore because there is a process of merger, there is a process So taking approval. Then accordingly, once those decisions happen, then we will communicate.
No, no. But any number you could give, if If it was or more if it's like Kochi, if it was a part of BPCL in Q1, what could have been the savings on taxes?
See, number wise okay, CFT CFT
will be definitely there will be a headwind, but otherwise number wise it depends on the price movement No,
but CSC, how much was it in Q1? Any idea, any numbers there or last year?
The gross savings is there in the
quarter, if it was Our incurrence, the overall What's the number?
I didn't get it.
The overall incurrence is around INR 150 to INR 160 crores during this Q1 on account of GST.
So that could be saved if it was a part of
Yes, we
have to see overall one of the synergies.
And what are the other Plans you have to turn it or are there anything else which is planned now that you have a free hand which could improve the profitability of the URL?
Definitely, definitely, we have to see some optimizations because right now we have acquired the retail stake. So now the team should work towards that.
Okay. Thank you.
Thank you. Ladies and gentlemen, that was the last question. I now hand over the conference to Mr. Harsh Jole for closing comments.
Ladies and gentlemen, I realize there's a long queue And lot of questions are yet unanswered. I'd request you to drop me or the management of VTCL an email, and I'm sure they'll do the need pull. Before I end the call, I'd like to thank VTSL Management for giving us an opportunity to host the call. Any last comments that you would like to make, Mr. Gupta?
On behalf of BPCL team, I thank all the investors for taking part in the call. Also, I thank IFL Security for organizing this call. We look forward to meeting after the next quarter results. Thank you.
Thank you. Thank you.
Thank you. On behalf of IASL Securities Limited, that concludes this conference. Thank you for joining us, and you may now disconnect your lines.