Ladies and gentlemen, good day and welcome to Bharat Petroleum Corporation Limited's Q4 FY 2026 earnings conference call hosted by Antique Stock Broking Limited. As a reminder, all participant lines will be in the listen-only mode, and there will be an opportunity for you to ask questions after the presentation concludes. I now hand the conference over to Mr. Varatharajan Sivasankaran from Antique Stock Broking Limited. Thank you, and over to you, sir.
Thank you, Michelle. A very good morning, everyone. It's my pleasure to welcome all the participants on this call, as well as the BPCL senior management for the Q4 FY 2026 BPCL's results conference call. With us we have Mr. V.R.K. Gupta, Director of Finance, Mr. Pankaj Kumar, ED, Corporate Finance, Mr. Ashish Goyal, CGM, Corporate Treasury, Ms. Anushya V. Thakur, DGM, Finance, and Mr. Balagirish , J. Senior Manager, Finance. I request Mr. Gupta to deliver his opening remarks.
Before we join the call with Gupta, sir, let me just briefly start with the statement. Thank you, Mr. Varadarajan. Good morning. On behalf of the BPCL team, I welcome you all to the Q4 earn call. Before we begin, I would like to mention that some of the statements that we'll be making in today's 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 may lead to different results. Since this is a quarterly result review, please restrict your questions to the Q4 results. I now request our Director of Finance, Mr. V.R.K. Gupta, who is leading the BPCL team for this call, to make his opening remarks. Thank you, and over to you, sir.
Good morning, everyone. Thank you for joining the call today. I hope you have had an opportunity to review our results and earnings released, uploaded on the exchanges. As you are all aware, we are meeting in turbulent times amid ongoing tension in West Asia, driving both the global and domestic economies through an uncertain phase. There has been major disruption in the global energy supply chains, with impacts seen across our sector and geographical segments. Crude and product prices, which remained broadly range-bound for much of FY 2025, 2026, witnessed heightened volatility towards the end of the year and disruptions to flow through the Strait of Hormuz. Forex fluctuations and geopolitical developments continue to remain the key drivers for energy markets.
Against this backdrop, we have continued to demonstrate operational resilience across our refining, marketing and infrastructure businesses, while remaining firmly committed to supporting India's energy security objectives and ensuring uninterrupted fuel availability across the country. Although we witnessed short-term spikes in demand due to panic re-reactions, resulting in initial disturbances in market supply, we have been managing the situation to ensure sufficient supply security in close coordination with OMCs under the able guidance of MoPNG. I'm happy to share with you that despite mounting challenges amidst the ongoing crisis, we have ensured smooth supply of all essential petroleum products, MS, HSD and LPG, across the country. While our financials for FY 2025, 2026 have been strong since the large impact of the war is not fully revealed in Q4 due to timing differences. June 2026, 2027 is going to be a challenging period.
Let me now take you through the operational and financial highlights for the quarter and the year. Refinery. Even during the recent war situation, we continue to maintain crude supply security through flexibility in crude sourcing by diversifying procurement strategy and the ability to process multiple crude grades across geographies. We have increased our Russian crude procurement from 25% in Q3 to 31% in Q4, and it continued to increase, fill up our supply gaps in the light of the current situation. Further, we have diversified to eight new grades of crude during the year, covering four geographical regions. I would also like to assure stakeholders that crude supplies have been secured through July 2026. Our refining business delivered a resilient operational performance during the quarter, supported by optimized crude sourcing, robust refinery operations and disciplined execution.
During the year, our refineries operated at 116% of utilization, with refinery throughput of 41.15 MMT, which is highest ever, and declared yield of 84.54%, reflecting the strength and complexity of our refining portfolio. Our gross refining margin for the year 2025, 2026 stood at $11.74 per barrel. On the marketing side, our business continued to maintain healthy momentum driven by steady demand growth across retail and commercial fuels. During the year, our overall domestic sales volume stood at 54.18 million metric ton at an overall growth of 3.5%, with petrol sales growing by 5.7% and diesel by 1% and ATF is 11.4%.
BPCL continued to maintain leadership in throughput per retail outlets among PSUs, with average throughput of 143 KL per month in Q4 2025-2026, strengthened by strategic marketing access, strong highway presence, and continued focus on customer experience and retail productivity. In the retail segment, we continued to expand our customer and infrastructure footprint during the year. BPCL commissioned 1,691 new retail outlets during this year, taking the overall retail network to 25,323 outlets. Our EV charging network expanded to 623 stations, while the CNG network increased to 2,650 stations, achieving network leadership in CNG among PSUs. Digital customer engagement initiatives, including the BPCL SBI Card OCTANE and UFill, continue to witness strong customer adoption and engagement.
Further, in our allied retail businesses like Apna Ghar, Be Cafe, Wayside Amenities, In & Out stores, we continue to strengthen non-fuel offering through the expansion of convenience and customer-focused formats across our network. The latest April retail market share, we have achieved MS at 30.02% and HSD 29.61% in retail segment. On the LPG segment, as of March 2026, the cumulative negative buffer towards LPG compensation stood at INR 12,319 crore. This is after accounting for the five installments received from Government of India from November 2025, again at the announced compensation of INR 7.94 crore. Our gas business continued to deliver strong growth momentum during the year. The annual sales volume stood at 2.29 MMT, registering a growth of 26.5% year-on-year.
The CNG segment in our GS recorded sales volume of 248 TMT, reflecting a robust growth of 62.1%. The business also achieved 100% utilization of the regasification capacity, booking with Petronet LNG, a first since inception of LNG imports by BPCL. Let me now update you on the progress of our strategic growth projects and long-term value creation initiatives. The dearomatized solvent project at Mumbai Refinery, with an annual capacity of 200 TMT, was commissioned during Q4 FY 2025-2026. This first of its kind Make in India initiative is an import substitution and strengthens our presence in the niche specialty product segment. The Krishnapatnam-Hyderabad Pipeline, a 445 km, 2.6 MMTPA multi-product pipeline, was commissioned in Q4 FY 2025-2026.
The project strengthens efficiency and provides critical evacuation infrastructure for the upcoming projects, while reflecting on our broader focus on logistics infrastructure. Further, during the year, we commissioned two retail depots, two LPG bottling plants, three aviation fueling stations, and two gas pipelines to strengthen supply and distribution capabilities. In addition, projects such as the Irugur, Devangonthi, and Mumbai-Rasayani pipelines are under implementation to further strengthen supply chain resilience and network connectivity. We successfully commissioned 1G and 2G ethanol plant of 100 KL per day capacity, each at Bargarh in Odisha in October 2025 and March 2026 respectively. The project is aligned with the national policy on biofuels aimed at enhancing energy security, reducing crude oil imports, and promoting cleaner and greener fuels. As part of our Project Aspire growth agenda, I would like to provide a brief update on our key strategic projects.
The Bina Petrochemical and Refinery Expansion Project has achieved 23% progress against a planned schedule of 32%, with INR 4,700 crore incurred and INR 25,400 crore already committed. The schedule variance is primarily due to geopolitical developments and associated supply chain challenges affecting the manufacturing and delivery. Critical long lead items remain on track, and all major packages have been awarded by February 2026. Recent Middle East conflicts have impacted supply, pricing, and execution timelines. We are actively monitoring the situation and implementing mitigation measures to minimize the impact on overall timelines. For the Andhra Pradesh Refinery cum Petrochemical Project, which is purported to be a 9 million metric ton per annum refinery and petrochemical complex, key preparatory activities are progressing as planned.
Environmental and technical studies have been completed, while detailed engineering and financial appraisal activities are currently underway. This project is supported by strong incentive from the Government of Andhra Pradesh. Other major projects, including the PRFCC project at Mumbai Refinery, the polypropylene project at Kochi, and the POL and LOBS installation at Rasayani, are also progressing steadily in line with the planned commissioning timelines. On the upstream segment, I'm happy to share the following updates. On the Mozambique block, on November 7th, 2025, the operator informed the Government of Mozambique that force majeure has been resolved. The work has resumed in full swing, and the first LNG cargo is expected by mid-2028. Presently, around 6,000 manpower is in the site, and around 42% project schedules have been completed.
On the BM-SEAL-11 Brazil project, the FPSO tender has been finalized and to be awarded shortly. Work has commenced for development, and first gas is expected by 2031 and 2032. The FID has been approved by the operator. Through our SPV, Urja Bharat Pte Limited, the first oil discovery in the unconventional Shilaif play has been made in SN76 well in the U.A.E. BPCL has also witnessed the oil discovery during testing of the exploration well SN7902S in the Onshore Block 1. Such positive developments are very encouraging and certainly a significant achievement for BPCL as an international operator. On the green energy front, we are advancing the renewable push with 251 MW installed capacity and additional wind and solar projects under execution for 100 MW. The overall capital outlay for the projects under renewables is INR 1,570 crore.
On an overall basis, we incurred a CapEx of INR 20,400 crore. The CapEx target for FY 2026, 2027 is INR 25,000 crore. Our capital allocation approach remains under prudent and disciplined manner. This continued focus on project execution, balance sheet strength, and sustainable returns. Let me now guide through the financial highlights for the quarter. The revenue from operations stood at INR 1,34,896 crore. The standalone profit after tax at INR 3,191 crore, and the consolidated profit after tax was INR 5,625 crore. Our standalone net worth as at March 31, 2026 is INR 95,233 crore. The earning per share for the quarter is 7.47 per share. As of March 2026, the debt equity at standalone gross borrowings level 0.11.
Overall standalone gross borrowings is INR 10,480 crore. We have current investments, including the oil bonds, of about INR 18,465 crore, placing us at a net surplus on standalone basis. At group level, debt equity is 0.43, with gross borrowings of INR 43,482 crore. Net equity ratio net of current investments at group level is 0.25. Given prevailing uncertainties in global energy market, we will refrain from providing forward-looking guidance at this stage. With this, I conclude my opening remarks and would now be happy to take your questions. Thank you.
Thank you very much, sir. Ladies and gentlemen, we will now begin with the question and answer session. The first question is from the line of Probal Sen from ICICI Securities. Please go ahead.
Thank you for the opportunity, sir. First of all, congratulations on a good set of numbers. A couple of questions around the performance. One, if we look at the derived refinery margin for the Q4 , is it fair to say that there has been some inventory positive impact in the refining numbers for this quarter, given the timing difference between stocks used and, you know, the way prices have behaved? Directionally, at least can we assume that there has been a significant inventory impact in this quarter?
Generally, we don't calculate refinery inventory gain losses because our average inventory is less than the cycle, purchase cycle. When price fluctuations are huge price fluctuation movements are happening, that particular point of period, definitely there will be some gain. We can't exactly give any guidance what would be the inventory gains. Definitely inventory gains will helping the refining margins in Q4.
Sure, sir. That's useful, sir. The second question was with respect to the supply mix. You already alluded to the rising share of Russian crude in our overall supply, and that has helped us offset the shortage from the Gulf. Can we get a sense, a little bit more granular sense of, you know, what kind of supply sources are now there in terms of crude that we have tied up till July, as you mentioned, other than Russia? What are the other destinations?
We have WTI is one destination. We have tried Venezuelan crude, we have tried even Middle Eastern spot grades also available, like Murban and other things, Market Made, these are all available. There we have tested last year, at least four new grades we have tested, Venezuela, Brazil, and Angola. In spot, many of the grades are available. Major source is coming from Russia only. Even for till July 2026, when you see the numbers, the major source on spot is Russia. Term, we have beginning of the year, maybe we have allocated for term around 55% of our requirement.
We are not getting the full term. Maybe around 45%-46% of our term requirements we are getting. Even there are constraints in the Strait of Hormuz, but we are getting around 45%-46% of term we are getting. Around 10% shortage, the 10% shortage we are moving to spot. Beginning of the year, we have planned for 45% for spot now it's-
Right.
-happening at around 50% spot.
That's very useful, sir. If I can ask a small follow-up. We know that, you know, the crude assay or the, you know, API and other nature of WTI in Venezuela is very different. Assuming that, you know, we have to rely more on those sources, will it have a impact on our distillate yield going forward? Is Gulf crudes actually reduce even more?
No, definitely distillate yield will change, but at the same time it will have a commercial benefit also. Net-net, we see what is the CAV value addition at refinery, and what is our product demand. Accordingly, we balance it out to the product, based on the product demand, what is the crude requirement, and what is the profitability we can optimize. But we cannot take directly Venezuelan crude directly. With blend only we can take. Accordingly, we are planning small cargo sizes we can take and blend it with other grades and, we take it to the refinery.
Right, sir. One last question. In terms of the CapEx, you already mentioned the overall number of INR 25,000 crore. Can we get a little bit more breakup in terms of segments or key projects that are there in FY 2027?
You see our major projects are mainly Bina Petrochemical Complex projects. Okay? That is for Bina, we are allocating for 2026-2027. Refinery plus petrochemicals, we have allocated around INR 11,000 crore. Out of which two major projects, three major projects. Polypropylene at Kochi, PRFCC at Mumbai and Bina. For these two projects, and regular CapEx for refinery, around INR 11,000 crore. Marketing initiatives, our new retail outlet expansion and infrastructure expansion and whatever supply logistics side expansion, we have allocated around INR 10,000 crore. BPRL, we have planned around INR 2,250 crore of equity infusion for the ongoing projects. The CGD network, as a continuous expansion of our CGD network, we have allocated around INR 2,900 crore. Overall, put together it is a INR 25,000 crore capital allocation for 2026-2027.
That is very useful, sir. Thank you for your time. I'll come back if I have more questions on it.
Thank you. The next question is from the line of Vivekanand S. from Ambit Capital. Please go ahead.
Yeah, thank you for the opportunity. Two questions. The first one is on the impairment that you booked this quarter. Now, in your opening comments, you have mentioned that the production in Mozambique, the construction activity is underway, and you expect first LNG from Mozambique in 2028, mid of that. Why did you take an impairment even after the construction started in Mozambique, or restarted in Mozambique? That's question one. The second one is on the retail fuel operations. Do you see the current environment as conducive for yourself to gain market share, given that some of the private players which were looking to expand, maybe now they rethink due to the uncertainty in the marketing side. Yep, thanks. Those are my two questions.
Come to the first question, the impairment in our upstream venture is mainly for Brazil venture, not for Mozambique. Mozambique, there is no incremental impairment during this year because the work is going on as per the schedules, and 42% is a good progress has happened. It is not warranted at this point of time any impairment for Mozambique project. The major impairment is for the Brazil project. In fact, actually, the FPSO tender almost it took three years to finalize the FPSO tender. That was the reason the project completion schedules have been further extended to 2031, 2032. The oil will come in 2031 and gas will come end of 2031, 2032 financial year. Initially, we thought Brazil, the gas and oil will come around 2028, 2029 financial year.
Since the project has been delayed by around one and a half or two years, when you discount the future estimated cash flows to the current value, it is warranted for impairment. Assuming all other parameters are at the same assumptions, since project delay is happening in Brazil, that was the reason there is a need for impairment. Secondly is retail segment, based on the current context whether increasing the market share is good or not. Generally, we don't see on a temporary basis increase of the market share because this some point of time whether retail customers they may come here and other thing. Otherwise, as a long-term strategy, always we our endeavor is to improve our market share.
These are all temporary, time period we have to face the challenges, but otherwise our market share initiatives are only for long term. Sometimes, yes, based on the current market conditions, market share can go up, but our endeavor to sustain the market share even in long-term basis.
Right. Okay, thanks. Just one follow-up. As far as the carrying value of BPRL goes, now it's around INR 4,100 crore. Is there any broad breakup that you can share of the split of this carrying value of INR 4,100 crore across the key assets?
That we'll share it separately. Main value add I'm saying, the impairment is coming during this year mainly for the Brazil block. Entire amount, whatever impairment, INR 4,300 is only for the Brazil block. All other assets are, there is no incremental impairment due to this year.
Okay. Thank you so much, and all the best.
Thank you. Ladies and gentlemen, in order to ensure that the management will be able to address questions from all the participants in the conference, kindly limit your questions to only two per participant. Should you have a follow-up question, please rejoin the queue. We will take the next question from the line of Mayank Maheshwari from Morgan Stanley. Please go ahead.
Thank you for the call, sir. My first question was a bit on marketing again. I think you have seen almost pretty much a year of relative market share loss compared to the other peers. Anything that you kind of can suggest which will help you kind of reverse that? Obviously, right now it's less conducive, but like over a more medium term, what is BPCL doing around that?
Our objective is there should not be any disruption in the supply chain. That is the first objective. We have to continue supply to the market and no customer should suffer on account of non-availability of the fuel. In terms of market expansion and market share expansion, it's a continuous exercise. Our endeavor is to take at least 32% in retail segment market share over a period of time. That was the reason many initiatives we have taken at the retail field. One is through expansion, network expansion is one strategy we have adopted and bringing more and more initiatives to give more convenience to the customers. These two initiatives are our long-term strategy to take up our market share to around, at least in retail, 32% in a couple of years.
Got it, sir. I think the second question was more related to the upstream side. In terms of total investments in upstream, your share across all the portfolios and now that you have got some good discoveries as well, over the next five years, like how is BPCL thinking in terms of capital allocation to upstream as a percentage of total CapEx?
Yeah. We have three major projects in our hand already discovered where exploration stage is completed. Now it is either the development stage has started and some work has completed. Let me explain one by one these projects. One is the Mozambique, that is our flagship project, which is having a reserve size of around 70 TCF reserve size. The first phase, the development is happening only for 13 TCF, out of which our stake is 10%. For that already 42% is completed, and there is a huge potential of future expansions. Once this particular phase is completed, whatever cash flows comes, the first phase is mostly it is under project finance. There is no equity commitment from our side for Mozambique.
Whatever we have committed and invested, that is okay. Future any investments are from the mainly for the project financing. There is no future capital commitment from BPCL side through equity. Subsequent phases definitely whatever cash flow comes from the first phase first time, automatically the cash flow is reinvested in the subsequent phases. That is broadly about Mozambique. Come to the Brazil. Brazil, the total project CapEx size is around $6.4 billion.
$2.8 billion is our share.
Our share out is around 40% mean $2.8 billion. Maybe future our capital contribution will be around $1.2 billion, we have to invest over a period of 3- 4 years. This is only in the field, only one development. There is a potential of another development in the same field. Still the exploration and drilling has to happen, but we are at least the initial estimations we are feeling the similar stage of reserves are available in another field also. There is a good potential, but at this point of time we cannot comment on that potential side.
Whatever existing field in Brazil, the daily production of crude, we are expecting around 88,000 barrel per day, out of which 40% is through our joint venture IBV. This is a good equity oil. The rights are equity oil we can bring in India in case if we want here, or we can market our crude rights wherever we want based on the commercial position at that point of time. That is the Brazil. The third one is Lower Zakum through Lower Zakum and Upper Zakum blocks in U.A.E. Already producing block it is giving good volume because India consortium is having around 10% of the stake in that. Another discovery we have just now we have completed during FY 2025, 2026.
Now it will go for the development plan and the activities will come there. The initial estimations, we are hopeful we have a good amount of reserves there and a good amount of extractable reserves. Once that plan is ready, then we will communicate to you. Beyond that, we have certain producing blocks in India, but very small in size. Our plan is at least, very long-term strategy, we are looking at it at least, 6.5 B bl-7 Bbl , 6.5 million metric ton-7 million metric ton of crude capacity we should have in our group balance sheet. That is our short-term target. With these projects, we are hopeful we will reach that level.
Very clear, sir. Thank you.
Thank you. The next question is from the line of Nitin Tiwari from PhillipCapital India. Please go ahead.
Hi. Good morning. Thank you for the opportunity. My question is with respect to your key CapEx projects that you have undertaken. If you for our benefit summarize what is the planned CapEx for the key projects that you are currently running, which is in Mumbai, Kochi and Bina Refinery. Is there any relook at that amount given the sharp depreciation in INR? That is my first question. Related to that is given that this year we are facing fair amount of challenge in terms of our operating cash flow. Is there any, like, you know, is there any relook at any of the CapEx programs? Continuing on that, how do we see our debt to equity ratio changing?
I mean, like, you know, with the perspective on current operating cash flows that we are going to generate given the scenario we are in, and the CapEx we have in front of us, that would be my first question.
Let me explain our three major flagship projects. One is Bina Petrochemical Complex. The total project cost is around INR 49,800 crore. Out of which only the foreign component will be around INR 6,500 crore. Even if there is any huge foreign fluctuation, the impact on the foreign component is limited. Maybe even a 10% depreciation, the initial estimations of INR 6,500 crore, maybe INR 6,000 crore, INR 7,000 crore on account of foreign exchange fluctuation on that component it happens. All other components in the project cost is INR denominated. Around INR 25,000 crore tenders have been awarded on fixed price contract, so that there won't be any price impact on that, what are already awarded projects.
Maybe around 20%- 25% of project work we are yet to award. There may be small impact, we are hopeful whatever approved project cost within ± 10% we have approved, we are hopeful within that limits we will be in a position to complete. Let us see next one or two years how the things will happen with what will be the inflation and other things. We have to wait and see. At this point of time, if you ask whatever approved number within ± 10%, we will be in a position to complete the project for Bina. Comes to polypropylene at Kochi Refinery, almost 85%, 90% of the projects have been awarded.
We have initially approved at INR 5,000 crore ±10%. Based on the current estimation, we will be in a position to complete the project at that level only. There won't be any price escalations. The third project is PRFCC at Mumbai Refinery. Last year only we have approved. The work has just started. The license selection and bid up is going on. At this point of time, we are not foreseeing any major cost escalation at this point of time. Maybe once we reach to the next year, at least a 30%, 40% progress if we see, then we will come to know whether is there any price escalation indications are not there. These three are our major projects in India. All other CapEx allocations, these are our short-term projects.
Maybe one year or two years, these projects can be completed as a pipeline or infrastructure depots and other things. We don't foresee any major price escalations. Only even the steel and material prices goes up, the component is small. We are hopeful as per the original estimated numbers with a ±10% we will be in a position to complete. Other extremes, upstream side, whatever projects already we have explained, Brazil, the revised cost we have approved at our board level subject to the Government approvals. Mozambique also we have approved at board level, and 42% project has been completed. We are hopeful within the approved project cost that project also can be completed. This is overall our project side, and the price impact on the project side.
When it comes to when you say the balance sheet, how do we manage the cash flow and other thing, we have a very strong balance sheet. Even March 2026, if you see, even we have a CapEx of around INR 20,000 crore we spent last year, still we could maintain our debt-equity at 0.11 on standalone and 0.25 at consolidated after netting up our investments. This year also we are expecting INR 25,000 crore of CapEx, and we may cross INR 25,000 crore, maybe INR 26,000 crore, INR 27,000 crore at the end of the year if things are going smoothly. Even with this also, we are not forcing any big jump of debt equity provided once the crude prices settles. How things will move in the next couple of months, not sure.
We are hoping, whatever challenges today we are facing, it is only short term. Once things will settle, once the war and the blockade is removed at state of normalcy, the supply side becomes normalizes, then we are hopeful by at least July, August, the price stability will come and normality can come back. We're not forcing any big stress on the balance sheet. Maybe, yes, short term there may be a stress out because cash flow mismatch has happened, so we have to take certain borrowings during this period. End of the year we are hopeful. Let us wait and see how the things will move. Long-term debt equity we are projecting by all planned CapEx.
We are not expecting the debt equity will go up beyond 1: 1 at group level. That is our expectation. Once the projects are completed, definitely the new cash flows will come from the new projects. Maybe in another couple of four years the debt equity can come back to normal level. Always we see debt equity should not cross at 1: 1 at peak level. Generally we are comfortable to maintain at 0.3, 0.4 level debt equity.
Thank you, sir, for the detailed answer. My second question is also related to the first one. As you pointed out, we do have a supply challenge because of the disruptions in Middle East. At the same time, we also have, like, you know, cash flow challenges stemming from the pricing, basically restrictions that we have over here. I mean, in that backdrop, I mean, this is more of a hypothetical question. Is there any thought among OMCs to switch back to a regulated regime? At least in the regulated regime, we used to get back our, like, you know, under recoveries that were there in petrol and diesel.
At this moment, while, technically the products are deregulated, but at the same time, there are severe under recoveries, as far as our assessments go, but there is no roadmap for recovery of those, under recoveries. Any thoughts on that, sir?
Let me explain. You know LPG is already a regulated product. Whatever under recovery said LPG, definitely we are hopeful some sort of support comes from Government of India. Earlier, government always supports for LPG. In terms of other products, we feel it is a short-term challenge. It's not a permanent challenge. We have seen this situation even earlier also. Even in Russia, Ukraine war also we have seen. We feel it is a short-term challenge. Definitely we'll come back to the normal scenario. Wait and see. Yeah.
Thank you. We'll take the next question from the line of Sarthak Tita from DSP AMC. Please go ahead.
Hi, sir. Many congratulations on a good set of results. I just have one question. On the marketing front, majorly on fuel availability side, we have been reading that there have been some shortages or some changes into the working capital structure for the dealers. Just wanted to check from you as to if there are any changes that you have made or you are reporting any shortages in some, you know, highways or few far-fetched fuel pumps. Any clarity on that would help a lot. Thank you so much.
There is no shortage of fuels. Even if you see our refinery side, the operations are continuing at 118% of refinery capacity utilization. That means crude is available, crude is continuously coming here, our refineries are operating very well. Even in the sales also, when you see the sales last year, almost 3.6% growth. It is much higher than normal expected growth of 2.5%. Whatever market demand is there, we are continuously catering the market needs. Second, some credit in terms of the credit, our policy, still we are continuing extending the credit to the dealers. There is no stoppage of credit to the dealers. Whatever credit policy based on the requirement, some controls and other things, we extend the credit.
Only thing, in case if the money doesn't come back in time, if there are any defaults by the customers, definitely there will be some restrictions on extending the credit. We give the credit, within three days or four days, once they collect the cash, they have to pay back to the company. If there is any defaults, those customers we put a control.
Okay. Got it. That helps. Thank you so much, sir. That's it from my side.
Thank you. We'll take the next question from the line of Sabri Hazarika from Emkay Global Financial Services. Please go ahead.
Good morning. Two questions. There has been a press note, a press article where it has been mentioned that, I think it's quoting the management saying that current Russian crude share for BPCL is around 40%-45%, and the discounts are also at $6-$8 per barrel versus $12-$13 per barrel. Do you confirm this?
One is percentage, yes, definitely recent period the Russian cargo percentage has gone up. Last year Q4 it was 31%, whereas the current period because most of the supply on spot basis only Russian grades are available and more. Russian product offtake is, and I said around 40%-41% in the recent time we have taken. In terms of the discount and premiums, daily it changes. Okay? Last year it was in a discount scenario, Russian crude. This year it is a premium scenario. It depends, demand supply situation or what are the sanctions on Russian cargos. If there is no sanction, it's a free market. If there are sanctions, then tight market. It depends on the market trends. I cannot say it is available at discount, and this will vary. Discount, I think presently it is not available at discount, at least I can say that.
Okay, got it. Secondly, regarding your inventory position right now, how much crude stocks, LPG stocks, product stocks are there at the moment for the company?
Generally we keep crude stocks around 25- 27 days. Maybe sometimes one or two days higher over because we are preferring, keeping higher inventory levels. Maybe March 31st, 2026, the crude inventory 27 days. Last year it was 26. Maybe some point of time, maybe one or two days extra over additional cargoes in case if we take it, maybe 28 days, 29 days. Otherwise we can keep this level only. We cannot keep beyond 30 days because we don't have any storage also, tankage.
Right. Product and LPG?
Product number of days last year March 25th is 25 days. This year, March 26th is 24 days. More or less same, similar range we keep it.
Okay, and LPG?
LPG, every day it changes. If today if we get one cargo, then number of days coverage will be higher. Maybe three, four days, maybe the cargo is consumed, the number of days comes. It is a challenge. Generally we are comfortable at this point of time to keep around 15- 20 days coverage, but sometimes it may be lesser than 15 days coverage. Sometimes if we get good cargo, then it will be more.
Got it. Thank you so much, and all the best.
Thank you. We'll take the next question from the line of Bineet Banka from Nomura. Please go ahead.
Yeah, hi, sir. Thanks for the opportunity. Sir, firstly on, from what I read from the media report, the Russian crude sanctions will expire by mid-June. It has been extended by one month. And you said that you have booked your supply till July, and most of it will be coming from Russia. Is there a risk of shortfall given that there's a possibility that these sanctions will not be extended?
Let me explain. Russian crude is not sanctioned any time. Only entities have been sanctioned. Okay. Whereas Iran crude is sanctioned. When once crude is not sanctioned, you have a right to buy from non-sanctioned entities. Even before the war also, we used to continue to buy Russian crude from the non-sanctioned entities. There may be supply from the non-sanctioned entities. Waiver, during the waiver period, you can buy Russian crude from any party. During lapse of the waiver period, you can buy only from the non-sanctioned entities. Always, we keep that controls. Whatever Russian crude we buy, always it is from the non-sanctioned entities. Either is a cargo vessel owner or port or the supplier, they, those parties should be non-sanctioned entities.
Okay, sir. Thanks. Very clear, sir. Second question on LPG under recovery. From what I understand from HP and IOCL, that under recovery currently is around INR 670, INR 680 per cylinder. If you look at the Saudi CP price, it has gone up to, like, $800 per ton. If you try to plug in this, the number which we arrive at is much lower than INR 680. What exactly changed in the calculation? Is there higher port premium over the Saudi CP? The sourcing mixture also changed from the Middle East to country like U.S., Venezuela also. Again, there'll be some higher logistic cost as well. Yeah.
Yeah. Yo u rightly said it. Actually, these two are the additional components. One is the logistics cost, definitely. Pre-war level, the freight cost, Worldscale is around 50, 55 level. Now the Worldscale has gone up to 600, 700. The peak level. This is one component, freight cost is, really it is, increases. The second component, when we say Saudi CP, it applies only to the term contract. If term is not available, when you go to the spot market, sometimes you have to pay premium of $300, sometimes, $200. When you take cargoes from U.S., definitely the freight rates will be very high because the transit period itself is to and fro will be almost 90 days.
When you engage your time setup for 90 days, definitely the freight cost will be higher. These are the two components. The two components, if we add it, your actual under recovery will be around INR 650.
Sir, have you signed any long-term LPG contract from sources other than Middle East? What could be the benchmark for that?
Last year, industry has signed around 10% of our requirement LPG for U.S. supplies. That supplies have been started. The benchmark will be Saudi CP ±$ 10-$15 only. Either in a particular month, maybe Saudi CP landing cost may be - 10% over, or sometimes it may be + 10% over. It depends on the freight rates. That was the term we have signed 10%. Spot now, recently we have started taking spot also, LPG spot also, from U.S. suppliers by sending our time charter vessels there and bringing the LPG. There definitely the landing cost will be higher as compared to term what we have signed.
Okay, sir. Thank you. Last question, sir. On refinery side, can you give some kind of number around what is the refinery margin trend that we are looking at in April, May?
No, we cannot give any guidance April, May, what would be the refining margin. Last year, 2025, 2026, we ended up with $11.74. Why we cannot give you this refining margin, it depends on various parameters, and every parameter is changing on daily basis. The crude price, the premium, the freight, the insurance, the product prices. There is no stable environment where we can give a little bit indication, okay, this will be look like. Generally we avoid giving any guidance on what would be the indicative GRMs. Many parameters it influences.
Okay, sir. Thank you so much. I'll get back in with you.
Thank you. Thank you. The next question is from the line of Yash Nandwani from IIFL Capital. Please go ahead.
Thanks for the opportunity. Sir, could you please provide some sense on the delivered crude cost currently similarly like LPG that you said? We understand that OMCs are paying a premium over the dated Brent prices along with the elevated freight and insurance cost. If possible, could you share a broad range for crude premiums currently?
It all depends on which source we take crude, but indicatively you can take today's date if you want to finalize any deal with Brent is at around $110, maybe our landing will be $120 or $122. Maybe today's if you ask me. Every day it changes, my landing.
Sure, sir. Thanks. Sir, my second question is related to a point raised earlier. Given the current situation, is it fair to assume that we could see some meaningful price hike, at a periodic intervals rather than complete move back to daily price revisions?
I cannot comment on this, please.
Okay.
We cannot comment.
Okay.
Thank you. We'll take the next question from the line of Sumeet Rohra from Smartsun Capital Pte Limited. Please go ahead.
Yeah. Hi, sir. A very good morning to you and your entire team. Firstly, sir, I mean, extremely great performance for the last financial year. Sir, I'll just be very quick and brief about it. Sir, you know, I've actually seen, you know, your statement wherein you said that, you know, you don't expect any stress on the balance sheet. Sir, I am absolutely perplexed, you know, on this statement which you've made. Because, sir, you know, I mean, we all are aware about, you know, what kind of under recoveries today we are facing, you know, across all the products.
You know, sir, I mean, just my, my question to you honestly is more as an investor is that if today, you know, bread prices can move up by INR 5 and milk can also go up at the same quantum, what's actually, you know, stopping the fuel prices from moving up? As you've seen internationally, all the, you know, countries in the world have raised prices. The point I'm getting at, sir, is that how are we, how are we seeing the situation, or what's the inflection point where you say that, you know, this war is now well into the 85 days, you know, it's not getting resolved? We are going to, you know, align prices to market link.
Sir, today we do 40 crore L of fuel across all the three OMCs, and, you know, the amount of money we are losing. It's, you know, it's quite perplexing as an investor angle that what are we thinking exactly? Can you please share some thought at least, and especially after you said that, you know, you don't expect any stress on balance sheet, because obviously your balance sheet is very strong, but obviously, you know, things are challenging. Can you please explain a bit from an investor angle, sir?
Let me clarify. When I say there is no stress on the balance sheet, that is the status as on March 2026. Okay. Even there are certain under recoveries even during the month of March, but still we could withstand. Now come to the future. This particular environment we can absorb for a limited period. If it continues, definitely no balance sheet can absorb. Once the cash flow mismatch happens, we can absorb it one month or two months. Subsequently, if it continues, definitely there will be some solution so that our cash flow will continue. Our cash is required for the future CapEx requirement, we can put our investment. If it continue for a longer period of time, definitely there will be a stress if there is no price revisions happens.
Some point of time, the price revision and the burden has to be shared among all the stakeholders. That is my statement when I say. Long term, we are hopeful the prices will come back to the normal level. That point of time, whatever our estimated cash flows, if it continues, then there won't be any stress on the balance sheet. Even if we continue with the large projects, there is no re-review of the existing announced project. That is what I meant.
Okay.
Whatever we have announced, where the work is going on, we are not relooking that project. Assuming it will normalize after some point of time.
Understood.
Now, how long it will continue, in case if it continue for a longer period, definitely no balance sheet can take that absorption.
Got that. Sir, I mean, if I can just ask you only one thing very quickly. Sir, I mean, what we saw yesterday, I mean, you know, an INR 0.90 hike or something. Sir, I mean, what is, I mean, why can't we go back to a mechanism or what are the hurdles we are facing from going back to daily pricing wherein, you know, the pass-through is quite simply, you know, done on a daily basis, which was much before 2022. Can we go back to that, you know, era again?
I cannot comment anything on the price revision. It is a industry we discuss, and accordingly, what is good for the companies, what is good for the country, accordingly decisions have to come with the industry.
Okay, sir. Thank you, sir. Wish you all the best and good luck for the future, sir. Thank you.
Thank you. The next question is from the line of Somaiah Valliyappan from Avendus Spark. Please go ahead.
Yeah. Thanks for the opportunity, sir. My first question is on the products outside of the auto fuels, bitumen, petcoke, naphtha. If you could just help us understand on an integrated basis, have margins improved versus pre-war levels to now?
If you see the margins, marketing margins are depends on the import parity price only. There is no significant change in the marketing margins. Whatever in the earlier formula, based on the formula, our marketing margins will continue. Product-wise refining margin, generally we don't calculate product-wise refining margins. Overall refining margins only we calculate. That is the margin for the entire basket of products. Marketing side, everything is on import parity. All other products are on import parity only. Whatever, for example, my marketing margins are around 4% or 5% of my sale price. Similar levels we continue maintain in terms of the marketing margins.
Got it, sir. Sir, second question is on fuel and loss. If you could just help us understand, what is the a pprox fuel and loss across refineries, and if possible, across Kochi, Bombay? If you can just split it, that's all.
For Q4, Kochi Refinery fuel and loss, 6.48 for totally 8.41 Kochi, 5.64 for Mumbai Refinery and Bina is 9.01, total fuel and loss.
Sir, would we have a year back what this number would have been, in case we have it? Thank you.
Actually, I don't have. We'll share it. We'll share it.
Okay.
Similar range only. Mainly 0.2, 0.3 variation is the share of the sector only. Total fuel and loss will be less than that.
Sure, sir. Thank you.
Thank you. The next question is from the line of Sucrit D. Patil from Eyesight Fintrade Private Ltd . Please go ahead.
Good afternoon. I have two questions. My first question to Mr. Gupta is, from a technical standpoint, how is Bharat Petroleum optimizing its capital structure to balance growth investments in refining, marketing and renewable energy with debt sustainability, especially given the capital-intensive nature of oil and gas operations? Can you shed some light on this and on how the framework has been used for cash flow for forecasting interest rate management and working capital to ensure liquidity while still maintaining the profits? First question. I will ask the second question after this. Thank you.
You ask one question, you, it covers everything. Let me broadly give a clarification on our capital allocation. You know, whatever projects we take, every project may not give the similar returns. The objective is when energy sector is growing at a 2% or 3% on annualized basis, if you want to grow as a company, then you have to diversify even within the energy sector, which particular areas we have to keep the investment, or if you want to diversify beyond the energy sector, which sectors you have to allocate. The objective is how best optimum returns we can give it to our stakeholders. That is the main objective. Even, even when there is a market potential for renewables, we know the renewables will give only very rate of returns are around 8%-9% only.
At the same time we have net zero objectives. We have to balance our portfolio keeping capital allocation for renewables. In terms of the returns point of view, it gives a lesser return. Objective point of view, we have to give more allocation for renewables. Accordingly, we have taken a target of 2 GW in the immediate period for renewables. Even it is giving a lesser return, our endeavor is what extent maximum we can use it within our refinery so that the returns will be much higher. Instead of purchasing power from outsourced sources, better to generate the renewable power. It means two objectives. One is net zero objective, as well as giving good returns in terms of using in our refinery.
That is the reason whatever expansions we are taking for 2 GW, most of the output we are using within the refinery only. Second, in terms of expansion point of view, we have seen there is a big potential advantage if we integrate the petrochemicals with our refinery intermediaries, then it can give a good value addition for the refineries. That is the reason we have taken a couple of years back petrochemical strategy, where we don't have any big presence in petrochemicals. Accordingly, we are allocating good amount of capital for the existing projects. Even tomorrow, upcoming projects also, the petrochemical intensity will be very high, so that it can meet the product demand in India because the growth is almost 5%-7% growth petrochemicals, whereas in India is most of the petrochemical products are import driven.
That is the reason our major capital allocation, if you see, it is happening in petrochemicals. The third major capital allocation is happening in upstream side, where we have already completed the exploration activities, where it is moving to development level, where we are putting up more amount of money so that we have a good clarity after commissioning of the project, the cash flows will come back. Today we have a refining capacity of around 41 million metric ton, whereas the feed, our own feed is very less as compared to our refinery requirement. With all these projects, we are expecting at least 6-7 million metric ton of exploration. We should have either rights on the crude oil or we should have share of profit on the crude oil.
Accordingly, we are targeting around 6- 7 million metric tons of crude, we should have our own. That is the reason we have allocated capital. Whatever capital allocation projects we take, definitely if it is not giving a commercial returns, generally we are very prudent in terms of the capital allocation. If we are clear about the returns, then only we allocate any capital. You see any of our earlier projects of IREP or any other project. It always gives good returns. And our endeavor is timely completion of the project without any project cost escalation. These two are our objectives. In terms of the debt equity, earlier also I said, we never take extra leverage. We are comfortable debt equity at 1: 1 at peak level.
Subsequently, after commissioning the project, the debt equity should come back to the normalized level, say 0.4, 0.5. Then only we can take up that large project. Most of the projects we look at it, how fast the cash flows can come back? What is the net back period? As long as if the net back period is 5-6 years, then we are comfortable at least 80%, 90% of my investment can come back in four, five years. Then the risk levels will be lesser. Automatically we can share the interest and debt. These are the broader principles we take it.
Thank you. My second question to Mr. Goyal is, looking ahead, how do you see treasury operations evolving to support Bharat Petroleum's growth? What measures are being taken to strengthen liquidity management, forex risk mitigation and funding diversification across domestic and international markets? Thank you.
Good morning. Ashish Goyal this side. First and foremost, if you were to actually have a look at our borrowing structure, the foreign currency loans on the balance sheet are almost very minimal. As far as the exposure in foreign currency borrowings are concerned, at the moment, at this particular juncture, it is very, very less. Of course, the treasury functions keeps on evaluating the cash flow situation on an ongoing basis, as well as the projections on the basis of the, you know, evolving market conditions. We are taking all necessary steps to arrange for the funds at the most competitive rates. Thank you.
Thank you, sir. We'll take the next question from the line of Bineet Banka from Nomura. Please go ahead.
Hi, sir. Just a small follow-up on your answer to a previous question. You said landed crude cost versus the benchmark, the difference is currently $10-$12 per barrel. What was this number before the war?
Before the war, I can say for WTI, we used to take Brent + 5, Brent + 4 or 5. Peak, it went up to $20 also. Brent + $20, Brent + $25 also certain cargoes we had on the deals.
Okay, sir. Thanks.
Thank you. Ladies and gentlemen, that was the last question for today. I now hand the conference over to the management for closing comments. Thank you and over to you, sir.
Thank you everyone for your wholehearted participation in today's con call. Looking ahead, while markets may remain volatile in the near term, BPCL integrated operating model and resilient balance sheet position are well to navigate the evolving energy landscape. As we celebrate our 50th foundation year, having successfully navigated multiple industry cycles, we remain confident in our long-term strategy, execution capabilities, and ability to deliver sustained value. Aligned with the Government of India's vision, Atmanirbhar Bharat, we continue to strengthen domestic energy infrastructure and invest in future-ready energy platforms. Before I conclude, I would like to take this opportunity to thank the entire BPCL team for their unwavering commitment and collective pursuit of excellence and growth.
I also extend my sincere gratitude to the Ministry of Petroleum and Natural Gas, government officials, our valued customers, vendors, and business partners for their continued support, trust, and confidence as we move forward in energizing the lives of the country. Thank you.
Thank you, members of the management. Ladies and gentlemen, on behalf of Antique Stock Broking Limited, that concludes this conference. We thank you for joining us, and you may now disconnect your lines. Thank you.