Ladies and gentlemen, good afternoon and welcome to Q4 FY 2021 conference call of Indian Oil Corporation Limited, organized by Batlivala & Karani Securities India Private Limited. At this moment, all participants are in a listen-only mode. Later, we will conduct a question- and- answer session. At that time, if you have a question, please press star and one. Please note that this conference is recorded. I would now like to turn the conference over to Mr. Harshraj Aggarwal. Thank you, and over to you, sir.
A very good afternoon to all. On behalf of Batlivala & Karani Securities, I welcome you all to the post-schedule conference call with the management of Indian Oil Corporation. It gives us great pleasure to once again host the management for this post-schedule discussion. I would now like to hand over the call to the management for initial remarks. After which we will open the floor for interactive question -and- answer session. Over to you, sir.
Thank you, Mr. Harshraj. We welcome you all to the post-results conference call. From the management side, we have got Mr. Sandeep Kumar Gupta, Director of Finance, Indian Oil Corporation, Mr. Matthew Thomas, Executive Director of Corporate Finance and Treasury. Along with them, we have got Mr. Ruchir Agrawal, Chief General Manager of Corporate Finance, and Mr. K.S. Kesavan, Deputy General Manager of Corporate Finance. Mr. Subhajit Sarkar, Senior Finance Manager, Treasury, and myself, Prabhat Himatsingka, General Manager, Treasury. To begin with, Director of Finance will briefly touch upon the quarterly performance highlights, and then he will take the questions. I request Director of Finance, Indian Oil, to address the meeting.
Dear investors and analysts, a very good afternoon to all of you. I hope every one of you is safe and sound. I take this opportunity to welcome all of you to the conference call, post announcement of the annual results for financial year 2021. Hope you have gone through our results, and you have got the numbers from our teams also. Before I go to the results, first our initiatives on fighting this COVID-19 crisis of the nation. Team Indian Oil has been working rigorously for the past several weeks for positioning of liquid oxygen and ISO containers or cryogenic road tankers for transportation of liquid oxygen, consequent upon the increased requirement of liquid medical oxygen in the northern and western states from the eastern part of the country where oxygen is surplus.
As on date, Indian Oil has mobilized 41 cryogenic road tankers and ISO containers for utilization and supply of liquid medical oxygen. Indian Oil is also in process of converting 16 of its LNG fleets to liquid oxygen carriers in view of the prevailing situation. In addition, the corporation is arranging around 200 ISO containers on lease or outright purchase basis. Indian Oil is also coordinating with Ministry of External Affairs, Indian Air Force, Indian Navy, and International Corporation Division of MoPNG, and Indian missions abroad for procurement of liquid oxygen from major liquid oxygen suppliers like Linde in the Middle East, Singapore, and China. Approximate quantity tied up is around 14,000 metric tons spread over a period of three months. In addition, Indian Oil is providing logistic and transportation support for liquid oxygen being received as gratis from Middle East countries like Bahrain, UAE, and Kuwait.
Indian Oil diverted high-purity oxygen, 99.9% concentration, used in the monoethylene glycol or MEG unit to produce medical-grade liquid oxygen at its Panipat refinery and petrochemical complex. Liquid oxygen generation has been increased progressively from 17 April 2021 by minimizing gaseous oxygen consumption by reducing throughput of the petrochemical plant. On date, maximum possible quantity of 270 metric tons per day of liquid oxygen is now being supplied to different hospitals in the states of Delhi, Haryana, and Punjab. Indian Oil is setting up a cylinder filling facility at Panipat to cater to the dire need of oxygen cylinders. This would facilitate filling capacity of approximately 1,200 cylinders per day at 150 bars pressure. Expected commissioning of this facility is by end of June 2021. Indian Oil is also contributing in operationalization of temporary jumbo 500-bed COVID care hospital at Panipat.
This facility has been constructed by Haryana Government and is equipped with a dedicated gaseous oxygen pipeline of 15 metric tons per day capacity, installed by Indian Oil to source oxygen from its refinery complex. Indian Oil is also setting up a PSA-based medical-grade oxygen generation units at 12 locations in the states of Madhya Pradesh, Odisha, and Uttar Pradesh. Indian Oil is supplementing the available cold chain equipment infrastructure of four states, namely Jammu and Kashmir, Tamil Nadu, Bihar, and Manipur, for the storage and transportation of vaccine. Indian Oil has launched a nationwide network of COVID Coordination Centers for IOCians from 25th April 2021, providing 24-hour helpline services. As on date, Indian Oil has opened 95 such COVID Care Centers pan-India with a total capacity of 825 beds.
As regards to the vaccination status, around 15,500 employees of Indian Oil have already been vaccinated, which works out to around 49% of the total employee strength. Vaccination of more than 90% of 45+ age employees of Indian Oil has already been achieved. In addition to extending insurance for the second year, Indian Oil is organizing vaccination drive for approximately 4.2 lakh of its contract workmen and employees of business channel partners like LPG delivery boys, pump attendants, truck drivers, and crew members. Throughout this pandemic, Indian Oil maintained uninterrupted supplies at its ROs and in fact recorded 33.11 lakh LPG cylinders delivered on a single day on 30th of April 2020. Nearly 100% of refueling of flights in Vande Bharat Mission is also being arranged by Indian Oil.
Coming to this recent cyclone Tauktae, precautionary measures were taken at supply points, retail outlets, and LPG distributorships under Kerala, Karnataka, Maharashtra, and Gujarat state offices, so as to minimize losses and to maintain an uninterrupted supply line of fuel products. Till this point of time, no major damage has been reported from any of the IOC locations. Some damages related to outlets with respect to canopy, false ceiling, monolith hoardings, yard lights, et cetera, has been reported. LPG distribution in coastal districts under Gujarat State Office were affected and is likely to be resumed very soon. Coming to the highlights for the year. Indian Oil commissioned 3,000 retail outlets during the last fiscal year, taking our total tally to 32,060 retail outlets. Additionally, 310 CNG stations and 637 mobile dispensers were also brought in stream.
We continue to put concerted efforts to ensure that we retain our market leadership across geographical areas in times to come, both through network expansion and enhanced per pump throughput. Further to XP100 launched earlier, XP95 premium petrol was launched on May 1, 2021 and is now available at 2,500 ROs and will be available at around 6,000 ROs by July. We also solarized 1,658 of our 1,658 ROs during the year, taking the total solarized RO number to 18,336, which is around 57% of our total ROs. Company has taken host of digital initiatives in LPG marketing from asking Alexa to book your next refill to registering for a new connection through WhatsApp or missed call. Indian Oil also launched the Tatkal Indane service to deliver LPG refill at our customer's doorsteps within two hours of booking at select cities.
Further to launch of Chhotu 5 kg Free Trade LPG cylinder, the combo DBC scheme of 14.2+5 kg and composite cylinder in five or 10 kg, which are lightweight and translucent, have also been launched. We also have in our bouquet of offerings Indane XTRATEJ LPG for our industrial customers, which provides fuel saving using our R&D technology. Petrochemicals is continuously scaling new heights in physical performance.
Highest ever petrochemical sales of 2.67 million metric tonnes has been achieved in financial year 2021, against previous highest of 2.55 million metric tonnes in financial year 2018/2019. This does not include export sales. Besides expanding our existing petrochemical facilities, all our refinery expansions are coming with petrochemical facilities to tap the growth and profit potential. With the commissioning of 143 km long Ramanathapuram-Tuticorin section of the 1444 km long Ennore-Tiruvallur-Bengaluru-Puducherry-Nagapattinam-Madurai-Tuticorin natural gas pipeline, Indian Oil has achieved a milestone of 15,000 km pipeline network length.
In R&D, our HCNG experiment in Delhi, wherein we are plying 50 CNG buses on in- situ HCNG fuel, is progressing well. Further to adoption by a refinery in Serbia earlier, our INDMAX technology has been selected by NRL also for its upcoming 1.9 million metric ton FCC. Aligning Indian Oil's business objectives with national priorities, we have sharpened focus on bioenergy and renewables also. Indian Oil has initiated marketing of CBG from 11 plants to 18 retail outlets spread over five states with total sale of CBG in 2021 exceeding 962 metric tons. Presently, Indian Oil has a portfolio of 230 megawatts of renewable energy consisting of 168 wind and 65 megawatt of solar. For electric vehicles, we now have 257 charging stations and 29 battery swapping stations throughout the country.
We are also working on aluminum and battery technology with a foreign technology company with plans to put up manufacturing facility in India. We retain numero uno position in lubricants sales and registered highest ever growth of 24%, which translates to a volume of 98 MMT, with doubling our profits from lubes. New lube facilities are also coming up at Haldia, Baroda, and Panipat refineries. Gas sales also registered their highest ever volume at 4.767 million metric tonnes during the year. Talking about numbers, the average price of crude Indian basket during the quarter was at $60.45 per barrel, an increase of 35% from the average price of immediately preceding quarter, that is Q3 FY 2021. If we compare on a yearly basis, the average price during the current year has been $44.84 per barrel as against $60.61 per barrel in financial year 2019-2020.
With respect to crack spreads, MS cracks has improved during the quarter at $5.39 per barrel with reference to Indian basket of crude as compared to the preceding quarter, which was $2.97 per barrel. Cracks are also higher than the corresponding quarter of FY 2020. For HSD, the crack spread during this quarter at $3.78 per barrel has been higher as compared to the preceding quarter of $2.44 per barrel. However, the cracks are significantly lower than the corresponding quarter of financial year 2020, which was at $8.77 per barrel. As far as petrochemical spreads are concerned, spreads for polymers in this quarter at $690 per ton was 6% higher than the previous quarter and about 45% higher than the corresponding quarter of FY 2020. In case of PTA, the spread during the quarter was about 39% higher than the previous quarter.
However, the same was 2% lower than the corresponding quarter of FY 2020. This quarter, we have registered a profit after tax of INR 8,781 crore and for the year 2021, PAT is INR 21,836 crore as against INR 131 crore in FY 2020. As you are aware, the unprecedented fall in crude and petroleum product prices in March and April 2020 led to extraordinary inventory losses during FY 2019-2020, and resultantly dragged down the profitability of last year. While in the current financial year, the crude prices have been on an uptrend, thereby resulting in accretion to margins.
With vaccinations being rolled out across the globe, we are expecting improvement in refining margin environment going forward, which should help recovery in crack spreads. Revenue from operations during this quarter is INR 163,606 crore as against INR 146,599 crore in the preceding quarter of this year. Let me briefly touch upon performance of major verticals during Q4.
First, refineries. The throughput during the quarter was at 17.6 million metric tonnes with a capacity utilization of 102.4%. The throughput of FY 2021 was at 62.4 million metric tonnes with a capacity utilization of 89.5%. Throughputs were severely impacted during the first two quarters of the last fiscal due to fall in demand because of COVID-19. IOC refineries have registered a GRM of $10.59 per barrel during the current quarter. The normalized GRM after stripping of inventory impacts and factoring in price lags for the quarter is $2.51 per barrel. Our refineries have outperformed the benchmark Singapore GRMs during Q4, Singapore GRMs being $1.79 per barrel. Coming to pipelines, the capacity utilization of our pipelines was about 92.4% during this quarter as compared to 92.2% in Q3 of FY 2021. Capacity utilization of pipelines during FY 2021 was down by 10% at 80.4% compared to previous financial year.
This was due to impact on both crude as well as finished product throughput due to COVID-19. Our pipelines continued to generate a stable return, giving an EBITDA of about INR 1,600 crore during this quarter. Coming to marketing, the petroleum product sales during the quarter was 20.82 million metric tonnes as compared to 21.23 million metric tonnes preceding quarter. On a yearly basis, it was lower in financial year 2021 at 74.75 million metric tonnes than in financial year 2020. The marketing EBITDA for this quarter stood at INR 3,443 crore as against INR 7,130 crore during the previous quarter. In petrochemicals, during the quarter, the petrochemical business reported an EBITDA of INR 2,248 crore as against INR 1,954 crore in the previous quarter. Better margin environment along with increased production volumes helped in posting healthy EBITDA in the petrochemical segment during the year.
On borrowings front, the borrowings as on 31st of March 2021 was at INR 102,327 crore as against INR 116,545 crore as on 31st of March 2020. The above figure as on 31st March 2021 includes a lease obligation of INR 7,914 crore, which has been classified as borrowing as per Ind AS requirements. The decrease in borrowings have been primarily driven by reduction in receivables from GOI and normalization of inventory levels as compared to that of 31st of March 2020. I end my briefing here. We will now take your questions. Thank you very much.
Certainly, sir. Ladies and gentlemen, we will now begin the question- and- answer session. If you have a question, please press star and one on your phone and await your turn to ask the question when guided by me. If your question has been answered before your turn and you wish to withdraw your request, you may do so by pressing star and one again. We have our first question from Nafeesa Gupta from Bank of America. Please go ahead.
Thank you. Good afternoon, sirs. Could you give us the split for the inventory gains for the quarter?
These price fluctuations now have become a regular phenomenon. Every year we are seeing the fluctuation in the prices, which are resulting in inventory gains and losses. Even the crack spreads are also varying to a large extent, which are also integral part of the margins. To give a particular set of figures perhaps is not okay. Hence we are not giving this figure since this is not our statutory requirement also. However, since we have been reporting GRMs as a part of our results, we also have given the net GRMs stripping off the inventory impact.
Got it. Sir, again to repeat just the core GRM for full- year 2021, did you say it was around 2.3 for the quarter?
For the quarter it was INR 2.51, and for the full year it is INR 2.31.
All right. Got it, sir. Sir, my second question is on the throughput for the petchem and refineries. On the petchem front, firstly, because of the oxygen supply, what kind of throughput losses do you see there? On the refineries bit, again, there has been some
Excuse me, Nafeesa, there was an interruption. Can you please repeat this question?
Yes, sir. I was saying that on the throughput front, firstly, for the petchem side, since we've been supplying oxygen for COVID, what kind of throughput impact do you see happening on the petchem segment? And also for refineries, since there is some demand disruption on the fuel side, what kind of throughput drop for the refineries?
Yeah. First, on the oxygen from Panipat refinery. This oxygen was being utilized for MEG plant only, whereas our main stream petrochemicals is Naphtha cracker and PTA. We do not anticipate any noticeable difference in the throughputs of petrochemical on an overall basis or consequently on the profits. Coming to the petroleum, though COVID took a great toll of demand in the recent fortnight, but we are seeing the situation fast improving with decrease in the number of cases throughout the country. We hope that the situation should get corrected soon and it should not take that long which it took in the first phase of COVID.
Got it.
April refinery throughput was at 96%, but it was scaled down in the first fortnight of May to 84%, 85%. Perhaps may continue at lower levels in this fortnight also. We are seeing the situation fast improve.
Got it. Lastly, on the CapEx, how much was the CapEx in FY 2021 and what is the target for 2022?
Last year we spent about INR 27,000 crores and this year our target is about INR 28,500 crores.
Got it, sir. Thank you.
Thank you, Ms. Nafeesa. We have next question from the line of [Mr. Abhijeet Bora] from CIMB. You can go ahead.
Yeah. First question, sir. As far as GRM are concerned, we have been giving a reported GRM number and a normalized GRM number on a regular basis. If I look at, let's take the normal GRM numbers. FY 2021 is INR 5.64. For the first nine months it was INR 2.96. Okay. As per my calculation, automatically the Q4 number tends to be INR 12.5 and not INR 10.6, which you are saying. Similar sort of there is anomaly for the normalized GRM as well. As against INR 2.5 that you're saying for the Q4, it actually works out to INR 4.5. Could you please verify if I got something wrong?
Though your computation may be correct, there were some restatements, some recomputation at our end, and we have accordingly restated the numbers.
Okay. The Q4 number is the right number.
Yes. Which is gross $10.59 per barrel and net $2.51 per barrel.
Okay. Second is, could you share the latest debt number given that historically the March number is not a representative of the average number for the year or the quarter?
It is at about INR 87,000 crore, which is roughly, you can calculate the debt equity accordingly.
Okay. What are subsidy dues as of March? Government subsidy dues.
The subsidies are very less, and the total outstanding as on, say 31st of March, claims lodged, claims not lodged is INR 650 crore.
34, huh?
As on 31st of March 2021, the total receivable from Government of India towards DBTL etc. is only INR 680 crores, which also includes claims to be lodged for the month of March.
Sorry, INR 600 crores. Yeah, okay. I'm sorry. Can I just squeeze in the last question, which is the staff costs have gone up by 22% in FY 2021. Any explanation for that?
Yeah. Last year we had a profit of INR 1,313 crores only, and so there was no provision for bonus as per DPE guidelines to employees. This year, since we have profits, which are the normal profits as well as incremental profits over last year, so there is a bonus provision of about INR 1,800 crores for bonus for employees in this year. That is the primary reason for increase in the staff cost.
Would this INR 1,800 crore be for this year only or would it cover something for last year also? I'm trying to get [inaudible].
For this year only. This is as per DPE guidelines.
Thank you so much, sir. Thank you so much.
Thank you. We request participants to restrict the questions to two at a time. We have a question from Sabri Hazarika from Emkay Global. Please go ahead.
Yeah. Good afternoon, sir. Sir, I've got three questions. Did you mention that the Ennore Tuticorin pipeline has been completely done or some portion is pending right now?
No. No. No. It is not completely done. I said one section has been commissioned, but the other section, it is still to be completed.
Okay.
I said that only in addition to Ennore- Manali spur line of 22 km, which was commissioned in March 2019, the Ramanathapuram, Thoothukudi section of 142 km was completed in February 2021. Beyond that, Ennore Thiruvallur section of 154 km will get commissioned in June 2021.
Okay.
Likewise in August 2021, some section and the last section perhaps is expected in February 2022.
Okay, sir. Secondly, you have mentioned in your presentation three major functions of refinery that is Panipat, Barauni and Koyali. All of these are under implementation, right? Nothing I mean, the work has been started on this, right?
You said which? Which ones you said?
Panipat, Baroda, and the third one is, I think, Barauni.
Yeah. We are expanding Barauni, which was approved earlier, and Gujarat also, which was approved earlier, and Panipat was approved recently. Work on all these projects is on.
What is the timeline for commissioning of this expanded capacity?
Yeah, I will just tell you. Panipat is September 2024, Gujarat is, of course, August 2024, and Barauni is April 2023.
Okay, sir. Sir, last question?
Okay, Mr. Hazarika, I would request you to come back in the queue.
Okay. Thank you so much.
Thank you. We have a question from Mayank Maheshwari from Morgan Stanley. Please go ahead.
Sir, two questions from my end. One was regarding petrochemicals. Can you just give us a flavor of how has been the demand now for the month of May, and how has been your utilization rates on petrochemicals in the last quarter, and what's been the run rate right now?
Yeah, just a minute. You have, [inaudible]?
Yeah.
Yeah. Say, for Naphtha cracker, starting with Naphtha cracker. Naphtha cracker only was affected in the Q1 of last year, but beyond that, whether it was Q2, Q3, or Q4 of the last year, or it is April or May of this year, it is continuing with about 110%+ capacity utilization. Even in May, for the first fortnight, it is doing a capacity utilization of 113%. Similarly, our LAB plant at Gujarat in May is doing 111%. PX-PTA is little lower because perhaps there was a shutdown, but in April it did 86%. Our PP at Panipat is lower at about 60%-65% only because of limitation of the feed also, for which we are taking up action to line up imported feed.
Okay. Sir, can you just also talk a bit about your plans. Because you have now EV charging stations as well as you're focusing a bit on hydrogen as well. Can you just talk about what are you thinking from capital allocation perspective next few years on these businesses versus the refining side of the business?
These EV charging stations or battery swapping stations, hydrogen in any case is little distinct. These, in any case, are not going to take a major toll on the CapEx. The requirement of CapEx in these facilities is not much.
Okay. Is there a target that you have if you want to go in the next few years on how much stations you want to put in, et cetera?
The things are a little unfolding actually, and sort of capital allocation also keeps on getting revised, so I will not be giving any number right now. You must appreciate that since more than a year now, the situation is very fluid. Let it stabilize, and then perhaps at a better time we will tell this figure.
Okay. Thank you.
Thank you, sir. We have a question from Mr. Amit Rustagi from UBS. Please go ahead.
Yeah, sir. Good afternoon, and thanks for giving us the opportunity. Sir, my request actually pertaining to the buyback versus dividends decision. I think we have been paying a very good amount of dividend. Would you give an update that any consideration been given to buyback of the shares, because some of the companies which have done it in the past, there have been a good performance of the stock price as well.
You would appreciate that if there is any decision to this sort, we'll first inform the exchanges.
Sir, I'm just distinguishing from what are the factors which you are considering against the buyback. I think you must have given due weightage to both the decisions of buyback versus dividends, but what are the factors which you think are against the buyback decision?
No, I'm saying if there is any decision, we are supposed to inform the exchanges first.
Okay. We are not considering any sort of buyback.
I think I have answered your question.
Yeah. Okay. Sir, second thing is regarding the refining capacity. We have seen that already our refining utilization is one of the best or highest in the industry. In kind of current situation or in the longer term, if there is any impact on the product demand, then what is the rush to expand all the refining capacities at one go? By the time these refining capacities get materialized, the outlook on the refining margins may not be very sound. What are the thoughts actually which are going into these projects, and what kind of IRRs we are considering for determining the approval of these projects?
Yeah. Your hypothesis regarding the demand or the refining margins, I do not know whether it's founded or unfounded, but we have from our own sources and studies a very favorable opinion about the demand as well as the cracks which will prevail till the time it peaks, even in India, though globally it may take a little lesser time, but in India, at least the demand is going to be there. Accordingly, we are expanding our refinery capacities to meet up with local demand.
Yeah. Sir, what kind of guarantee-
Mr. Rustagi, can you please come back in the queue? Mr. Rustagi?
This is a related question on this. I'm just adding one sentence to that. Sir, what are the guarantees you are considering for approving these projects?
To better answer this, we approve our projects only with a hurdle rate of 11% MIRR.
11%?
Yeah. Yes.
Okay. Thank you, sir.
Thank you, sir. We have our next question from Mr. Vidyadhar Ginde from ICICI Securities. Please go ahead.
Can you hear me?
Yeah.
Can you give me your crude cost in March 2021, the average cost of your crude, and the volume of crude which you had as of March 2021?
No, I will not be able to give you the price for March because that is something very confidential for us but you have the-
Sir, you have been mentioning.
Price for Dubai and Brent available with you. You can make a guess from there.
Okay. What about volume?
Volume of inventories is again a confidential information, but we generally keep around 15-16 million metric tons of crude and products at any given point in time.
Okay. What about the petrol, diesel sales volumes in April and May? How are they comparing?
Yeah. I'll just give.
If you could give comparison with 2019, it will be better rather than Y1.
The comparison to. Okay, yes.
If possible. Otherwise, we can work out.
No, I get it. For the month of May, with reference to May 19, we are -33% in petrol and -35% in diesel, industry-wise, I am saying, all three OMCs put together.
Mm-hmm. In case of in April?
Just a minute.
On this May data till when?
April, for petrol it was -5% roughly, and for diesel it was around 11% -. With reference to May 2019.
Yeah. May data till when?
Pardon? Hello?
Mr. Vidyadhar? Sir, I'll just check with his line. Meanwhile, I'll take the next person. We have a question from Manikantha Garre from Axis Capital. Please go ahead.
Yeah, good afternoon, sir. Thanks for providing me the opportunity. I wanted to check on one press release which has come a couple of months back, where you have mentioned that hydrogen generation units at the refineries will be sold, and these are mentioned as non-core. A little intrigued with that statement because how come it became non-core if it becomes part of your long-term energy transition strategy? Does it mean that we are going to only retail hydrogen and not focusing on production? That's the first question, sir.
No, I don't recall that we have ever said that these are non-core. We said we are going to monetize our hydrogen unit to begin with and perhaps subsequently other hydrogen units at other refineries. These two are at Gujarat Refinery. The rationale of monetization for us is basically to leverage on the operational efficiency with which the plants can be operated by an expert in this field, any gas company which is an expert of running these plants, and maybe produce even more than our captive requirement, which can then be sold as a merchant sale.
Understood, sir. The article mentioned non-core, so that's the reason I was asking that. The second question is with respect to this 200+ more containers that you are planning to either lease or buy out outright. If you buy out, what would be the CapEx? Once the purpose has been served, can they be repurposed for something else?
Yeah, they can be repurposed, definitely. I don't think this is the time to discuss about the cost of these equipment, considering the grave medical urgency which is there in the nation.
Understood. Thank you so much.
Thank you. We have our next question from Mr. Nitin Tiwari from Antique Stock Broking. Please go ahead.
Hi, sir. Good afternoon. Thanks for giving me the opportunity. A bit of correction over there. I'm from YES Securities now, so speaking from YES Securities. My first question is regarding CapEx. In FY 2021 and 2022, what is the broad makeup of our CapEx in terms of various segments, refining, marketing, etc., and related to that, basically, which are key projects which are going on as of now, and if we can give the investment and commissioning date for those projects. That would be my first question.
Mr. Prabhat will be answering.
Yeah. I'll just provide you the breakup of this major CapEx for 2021-2022. Refinery is around INR 5,000 crores. Okay. Pipeline is again INR 5,000 crore.
Right.
Marketing is INR 6,600 crores. Petrochemical, there is INR 2,580 crores. Okay. CGD including JV, we have got INR 1,500 crore. Other JV projects, we have got around INR 1,000 crore.
Right.
We have got some small below INR 25 crores lot of other projects, which is around INR 4,500 crores.
Sure. This is for 2021, sir?
2021/2022.
No, the breakup that you gave, this is for FY 2022, right? One for FY 2021.
Yes, for current year. You asked for 2021. Okay.
Yeah.
2021, refinery again, we had INR 5,058.
Right.
Pipeline it was INR 4,677 crores. Marketing is INR 6,124.
Right.
Petchem INR 2,630.
Right.
CGD, City Gas Distribution, including JV and our own, we had INR 4,000 crores we had spent on CGD.
Sure.
Other JV projects which we have got, INR 1,351. Small CapEx projects which are below INR 25 crore, INR 3,149.
Right.
Small amount, we have got R&D, INR 50 crores. We are constructing a new campus, so INR 50 crores on that, and E&P INR 49 crores.
Sure. Sir, the second part of this question, which are the key projects which are going on right now? What is the intended CapEx and commissioning timeline?
I'll just tell you the key major projects. One is Paradip-Hyderabad pipeline, which is completed 94% up till March 2021 and scheduled to be completed in March 2022.
Sure.
Another is Koyali-Ahmednagar-Solapur Pipeline.
Mm-mh
It is 85% completed up till March 2021, and scheduled to be completed in February 2022.
Mm-mh
Extension of Paradip-Haldia-Durgapur pipeline. This is a pipeline up to Patna and Muzaffarpur. This is completed up till 87% and scheduled for completion in December 2021.
Sure.
Actually, this is a long list. I am intervening. I am again Sandeep Kumar Gupta.
Right.
We can briefly mention all the refineries. We are expanding our Panipat refinery to 25 million ton. We are expanding our Gujarat refinery from 13.7 -1 8 million ton, Barauni from six to nine million ton. We have a JV project with CPCL to put up a 10 million ton unit at Nagapattinam. 9 million tons. Right. We have a Paraxylene and PTA project at Paradip, ethylene project going on at Paradip. We have acrylics/oxo-alcohol project at Gujarat Refinery. These are some of the refinery projects which are going on. There is a whole list of pipeline projects which are also there.
Sure, sir. I'll get offline, sir. I'll get offline in touch with you and take this. Sir, my second point is not actually a question, sir. It's actually a request and a very humble one, sir. You guys have been sharing certain data points with us, which helps us in our understanding of the company, inventory gains on the crude and marketing side as being one of the key data points. I would just request that please continue with that. Although I know on chance it's not a statutory requirement, but I would request that please do continue with that disclosure because it helps us understand the dynamics every quarter-on-quarter even more coherently. Just a request over there, you might consider. Please.
I already replied, so let us proceed.
All right, sir. Thank you so much.
Thank you. We have our next question from Mr. Probal Sen from Centrum Broking. Please go ahead.
Thank you for the opportunity, sir. Am I clearly audible?
Yes.
Yeah. Just wanted to understand, you did speak about the demand scenario in April and May. I wanted to understand what is the margin trend that one has seen in the Q1. Q4, of course, the numbers are there for us to see. Has there been a significant change in fuel margins in April and May, sir?
Yeah, generally speaking, they are on improvement. With sort of every passing day, we are seeing some improvement in the crack spreads of MS and HSD. Hopefully, with this vaccination and opening up of the economy with lower number of cases, we believe the demand world over. In fact, the foreign countries have already opened. The demand for fuel products in those countries abroad will drive the product crack spreads, which will also benefit us.
Thank you, sir. I was referring more to the marketing margin part of it in terms of retail fuel margins, how they have behaved and what are you seeing for the Q1 ?
No, I'm saying the retail marketing margins. They are sort of fixed, and they are not affected by the movement in the prices internationally. It is the refining margins which get affected.
Are we saying that the retail fuel margins have not changed at all in 1Q versus 4Q, sir?
No, I'm not saying beyond this.
Okay. Thank you, sir. That's all from my end. Thank you for the opportunity.
Thank you. We have our next question from Mr. S. Ramesh from Nirmal Bang. Please go ahead.
Good afternoon, thank you very much. The first question is in terms of the investments you are making in your own CGD geographic area as well as the JVs. When do you see some critical mass in terms of the CNG and PNG volumes? What are the kind of addition you expect in terms of your profits, say, three to four years down the line?
Are you talking about the CGD?
Yes, sir.
Yeah. The investments are on, and right now we will not be able to tell you the timelines presently. I would just like to mention that the projects are on stream, and they are moving according to the timelines, maybe a bit here and there. Otherwise, unless the projects are completed, we will not be able to tell you what exactly or how it is going to pan out. Generally speaking, these are CGD investments. CGD, actually certification takes longer time. Even PNGRB allows some years for completing the minimum work program, et cetera. It will depend upon that time of laying physically the infrastructure as well as the availability of the trunk line to reach gas to those geographical areas. We are first concentrating on, say, CNG and sort of sourcing wherever possible, CNG through gas cascade also, so that we can capture such opportunities.
Okay. The second thought is on the refining side, we hear that there are a lot of capacity closures, and at the same time, there are refineries which are getting into petrochemicals. In terms of your own understanding of the numbers, what is the kind of closure of refining capacity you can share with us over the next one, two years, and how do you see the light or sweet sour differentials moving, given that there is an increase in the supply of OPEC and Iranian crude?
None of our capacity is getting closed. Perhaps you are talking about some facilities world over.
We're talking about the global capacity.
We are also aware of such capacity closures only from media sources only. I would not like to dwell on that. None of our capacity at least is getting closed or in India any capacity is getting closed. Regarding the demand and crack scenario, I answered a few moments back also. We see the demand to be very robust and the crack spreads also to be healthy enough. Based upon that only we are approving projects with a minimum hurdle rate.
Okay. One last one. In terms of the integration with petrochemicals, we're seeing pretty much all oil and refining companies looking at petrochemicals. While there is growth in demand, isn't there a risk that there will be excess capacity somewhere down the line? Remember, your fixed cost economics may actually pin down the cost of production. Isn't there a risk that spreads will fall and would jeopardize the returns on these projects? What are your thoughts on that?
No, based on our studies, whether in-house or through consultants, we see the demand in absolute terms also growing, and our expansions will support that demand. Though the market share of the petroleum fuels may go down in long run, but perhaps the absolute volumes will keep growing, and hence accordingly we are going ahead with our expansion plans.
No, I was referring to the petrochemicals business. If you see oil companies and refining companies are all trying to capture the petrochemical value. When you see everybody putting up these projects, even if we assume that there is growth in demand, isn't there a risk of excess supply?
Definitely not. India's average consumption is much, much lower than the world average. There is a huge potential for growth in the petrochemical demand in the country.
Okay, thanks a lot, [inaudible] . Thank you.
Thank you, Mr. Ramesh. We have our next question from Mr. Sumit Arora from Smartfund Capital Pte Limited. Please go ahead.
Yeah. Hi, sir. Very good afternoon to you. Sir, firstly, I would like to congratulate you on fantastic set of results. You have done a remarkable performance in such a challenging and tough year, and also on a personal front, I would like to wish the entire IOC team to please be safe, to take care, and to be healthy. Sir, secondly, now coming to my question, sir. One, I would like to ask you that, you mentioned you added 3,000 outlets. Sir, is that basically, are you going to add 3,000 outlets every year, or we added this as a one time? Sir, secondly, I would also like to highlight to you that IOC is truly a goldmine. The reason I use this is because you have an dividend yield of 11.5%. You have a 23% earnings yield.
Sir, no company in [inaudible], no company in India has this kind of financial metric. Okay. I would like to state this on record that you are actually one of the best companies India has ever produced. Sir, unfortunately, this is not translating into a market cap phenomena. If you see after reporting the record performance. You had reported yesterday. In spite of that today, the market is not seeming to give it a thumbs up, which is absolutely ironical and strange. Sir, I would really wish, and I would request that the IOC board must seriously consider value unlocking things, because this company is definitely not worth lower than BPCL's market cap. Today, sir, BPCL's market cap is equal to our market cap, okay. We are 2.5x of our peer.
I would seriously request, if some kind of value unlocking happens in terms of some division is either off or something. There is something which obviously is missing. I would seriously recommend if that is looked into, because ultimately this is Government of India owned. Secondly, coming to the point on the crude point of view, I get to understand that there have been some flashes on Bloomberg today that Iran may come back into the oil market. Will that actually be beneficial to IOC? Will we start buying crude from Iran? If yes, then does Iran give at some kind of discount to our company, sir? Thank you so much.
First on the retail outlets. Yes, we have this plan going forward also at least in the near years. Because we feel that somehow we have not put up enough retail outlets compared to our market share. We will be putting these ROs and we operate in various models, A-site RO, B-site RO. Not much of a concern on the number of ROs. Second, on the market cap, I take your suggestions for consideration. Thank you very much. On a lighter note, the IOC share price depends upon your analysis and your feedbacks. You must also appreciate that even yesterday and even today, the market is in red, and despite that, IOC share is performing. I think that is a good sign. What was last?
Iran.
Iran. On Iran crude, we were buying Iran crude earlier also before sanction, I do not have any doubt why we will not buy Iran crude, because that favors Indian refining system also, if the sanctions are lifted. We will definitely buy. Now, as far as commercial terms are considered, since there was a considerable gap in between, we will have to see what kind of commercial arrangements are made with the National Iranian Oil Company, which supplies the crude once it restarts. Perhaps it is too premature to comment about that at this stage.
Sure, sir. Sir just one thing, if I heard you correctly, you said that the total outstanding of government receivable is only INR 680 crore. That's what you said, right?
Yeah, I repeat, it is only INR 680 crores.
Oh, that's wonderful news, sir. Thank you so much and wish you all the best and please stay safe in these times, sir.
Thank you.
Thank you, Mr. Arora. We have Mr. Vidyadhar Ginde back on the call. Sir, please go ahead with your question.
Yeah, can you hear me?
Yeah.
Yes, we can.
Yeah. My question was on petrochemicals. Could you give us some guidance on possible volumes of petchem in FY 2022 and what is specifically on the PP side, because I think most of their products are operating at high levels except for the [PTA], which you mentioned. PP is the one where you were talking about sourcing propylene to bump up your capacity utilization. If you could give us some indication on that for FY 2022.
Presently, the PP Paradip is operating at about 60%-65% capacity levels in April and May. We are trying to ramp up this capacity, but that will depend upon the feasibility of importing the feed for which we are trying. Beyond that, only MEG plant will commission during the year at Paradip. There are a lot of other projects which are in estimate, which will take perhaps a couple of years to get commissioned and then start producing. As a guidance, I can tell you that our plan is to take our petrochemical integration ratio to about 14%-15% by 2030.
Okay. Thank you.
Thank you. We have our next question from Mr. Maulik Patel from Equirus Securities. Please go ahead.
Yeah, thanks for the opportunity. Sir, can you just share the progress in terms of on a volume at Ennore and what is your expectation on the ramp-up?
Yeah, just a minute. What was the 2.55? The capacity was what?
2.5.
2.5?
[inaudible]
It was 2.72 MMSCMD.
That's roughly around 0.9 million ton, right? This is you're talking about for the full year or the quarter, sir?
I talked about April 2021 level.
Okay, April 20, current level.
Maybe the full- year figures I will give you separately. I do not have immediate.
No, that's fine. Thank you, sir.
Thank you. I would now like to hand over the call to Mr. Harshraj Aggarwal . Please go ahead, sir.
I would like to thank everyone and the management for taking time to attend the call. Thank you, everyone.
Thank you. Thank you very much.
Thank you from Indian Oil side, and thank you to everyone for this conference call.
Thank you, sir. Ladies and gentlemen, this concludes your conference for today. We thank you for your participation and for using iJunction Conference Service. You may please disconnect your lines now. Thank you, and have a great day.