Ladies and gentlemen, good day and welcome to Bharat Petroleum Corporation Limited Q1 FY22 post-earnings conference call, hosted by IIFL Securities. 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. Should you need assistance during the conference call, please signal an operator by pressing star and then zero on your touchtone telephone. Please note that this conference is being recorded. I now hand the conference over to Mr. Harsh Dole from IIFL Securities. Thank you, and over to you, sir. Thank you, moderator. Greetings, everyone. On behalf of IIFL Securities, I welcome you all for first quarter FY 2022 post-earnings conference call with Bharat Petroleum Corporation. To discuss company's performance and share the performance outlook, we have the senior management team today. The management team will be represented by Mr. V.R.K. Gupta, CFO, Ms. Jenny, DGM, Pricing and Insurance, Mr. Girwar Bhattad, Senior Manager of Corporate Treasury, and Mr. Piyush Borania, Senior Manager, Pricing and Insurance. I'd like to hand over the line to the management for their opening remarks, subsequent to which we can open the floor for Q&A. Over to you, Piyush. Thanks, Harsh. On behalf of the BPCL team, I welcome one and all to this post Q1 results con call. Before we begin, I would like to mention that some of the statements that we would make during this con call are based on our assessments of the matter, and we believe that these statements are reasonable. However, their nature involves a number of risks and uncertainties that may lead to different results. Since this is our quarterly results review, please restrict your questions to the Q1 results. I now request our CFO, 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, one and all. I hope all of you are keeping safe and healthy during these uncertain times. Welcome to the Q1 con call. BPCL has been supporting the government of India and the state government in the fight against the pandemic by taking various initiatives. We have provided vaccination logistics-related cold chain equipment in Uttar Pradesh and Haryana. We have taken initiatives for providing PSA oxygen plants in Maharashtra, Kerala, and Madhya Pradesh. Our refineries are regularly supplying medical oxygen to hospitals. Further, we have provided oxygen cylinders, concentrators, and PPE kits to various frontline workers. Going on to our results for the quarter, I hope you are able to go through our handout for the quarter. I would like to highlight a few points relating to the quarter drawn there. The second wave of COVID impacted the first quarter fuel sales for the financial year 2021-2022. However, the impact is not much as compared to previous year of the first quarter. They were prolonged through localized lockdowns across the country. BPCL MS sales were higher by 39.37% as compared to Q1 of previous year, and HSD by 24.9%. We registered number one in quarter one among OMCs in terms of the growth for MS and HSD when compared to quarter one of the previous financial year. Also, we grew the maximum among OMCs for LPG offset 2.23% when compared to Q1 of previous year. Indian economy is assumed to have a revised growth rate of around 9.5% in 2021-2022, in which agricultural, allied activity, industry, and service sectors are likely to register a growth of around 3%, 12.3%, and 1.4% respectively. As far as MS growth is concerned, the distinct possibility of a third wave of COVID-19, limited public transport, and available disposable income will continue to drive personal mobility. Though CNG penetration is increasing, the EV vehicles is also expected to increase, but freight transport will continue to be dominated by HSD as a fuel. In case of ATF, we grew by 115% as compared to Q1 of the previous year, mainly due to the severe restrictions and domestic flight during major part of Q1 of previous year. Scheduled international flights are yet to commence. Accordingly, ATF sales are yet to pick up as we are primarily focused on the international segment of the business. Strong recovery in U.S. and coupled with improving demand in Asia, including from China and India, has led to improvement in MS crack from around $5.66/barrel in Q4 and to $8.05/barrel in Q1 FY22 on sequential basis. In case of HSD, reduced Chinese exports balances with good global inventory position has led to moderate increase in HSD cracks from $5.78 to $6.9 on sequential quarter basis. When we compare Q1 of current financial year to Q4 of the previous financial year 2021, the Indian basket of crude had increased to $67 from $60. The rupee has been hovering around INR 74 today dollar. BPCL GRM stood at $4.12/barrel in Q1 as compared to $0.39 in Q1 of previous year. The refinery throughput was at 99% of the nameplate capacity during Q1, as compared to 75% during Q1 of previous financial year, and 96% for the full year of 2021. The throughput for both refineries was at 6.84 MMT for the quarter ended 30th June 2021, as compared to 5.14 MMT in Q1 of previous year. The refinery throughput has been aligned with the demand in the first quarter due to the severe second wave of COVID. The distillate yield in Q1 of current year is 85.49, which is almost similar to the comparative quarter of the previous year. For Q1, the revenue from operations stood at INR 89,687 crores as compared to INR 56,170 crores for Q1, mainly resulted from the increase in the volumes as well as the prices. The profit after tax stood at INR 152 crores as compared to INR 207 crores in quarter one of the previous year. In Q1, we have made a step-up acquisition and acquired the remaining stake of 36.62% in BORL from OQ for a consolidated consideration of around INR 2,399.26 crores, resulting in full control over BORL by BPCL. Against the CapEx target of INR 10,000 crores for during this financial year, we have almost spent around INR 4,001 crore. This includes the consideration paid to OQ, around INR 2,399 crores. During the quarter gone by, we have added 130 retail outlets. We have added 2,444 outlets during the previous entire financial year. We continue to hold the highest throughput per outlet among the OMCs. In terms of the CapEx, MSBP projects at Kochi Refinery has been fully commissioned. The two out of the three major units of PDPP at Kochi Refinery, that is acrylic acid and oxo alcohol, has been commissioned, and the third unit, acrylate, is under commissioning. Our borrowings as on 30th June 2021, significantly reduced from INR 26,000 crore level to INR 21,577. These are excluding the lease obligations amounting to around INR 7,900 crore. The debt-to-equity ratio as on 30th June, at the end of the Q1, it has improved significantly and we are at 0.38x as compared to 0.98x in the Q1 of previous year. As of 30th June, we have around INR 233 crore outstanding, which is received from Government of India. It is not a very significant amount. There is no under-recovery for SKO, PDS and negligible subsidy in LPG during this quarter. I now invite for questions and for any clarifications. Thank you. Thank you very much, sir. Ladies and gentlemen, we will now begin the question and answer session. Anyone who wishes to ask a question may press star and one on the touch-tone telephone. If you wish to remove yourself from the question queue, you may press star and two. Participants are requested to use handsets while asking a question. Anyone who has a question may press star and one. Ladies and gentlemen, we will wait for a moment while the question queue assembles. Our first question is from the line of Anubhav Agarwal from Credit Suisse. Please go ahead. Yeah. Hi, sir. Morning. Am I audible properly? Yes. Great, sir. First question was on the other expenses. Compared to the previous quarter, the intensity of other expenses this quarter was little higher. Was there any one-off in this quarter or was there any, let's say, extra spend on the refining or the marketing segment in this quarter? There are no one-off expenses, mainly if you compare the physicals have also increased significantly as compared to first quarter of previous year. Even the volumes have gone up, even the refinery throughput has gone up. Correspondingly, definitely the transportation cost will go up as compared to Q1 of previous year. Some refinery-related, the fuel and other things, purchased fuel and cost, is almost proportional to Q1 of previous year in terms of when you consider the quantity increase in terms of refinery throughput and whatever sales volume. Mainly on account of transporting, there is a variable increase. There is no one-off expenses. Okay. Second question was on the personnel cost. Staff cost this quarter was much lower. Is this a new run rate for us? Hopefully, it is a new run rate because after taking the VRS during Q3 of last year, now the number of employees have also come down. Now we are at around 9,000 manpower, 9,200 something, as compared to 11,000 manpower in the previous year. We are almost lean now. Most probably, it will continue like this only. Okay. Thank you, sir. Thank you. We'll take our next question from the line of Amit Rustagi from UBS. Please go ahead. Yes, sir. Good afternoon. Sir, could you please elaborate that is any decision being taken on the stake sale in IGL and Petronet LNG before the transaction? The two entities will go along with the stake sale? No, there is no decision taken as on date. Still we are working with Government of India to protect the interest of BPCL. No decisions in that aspect as of date. Okay. Sir, will this now lead to open offer in both the stocks, given you would have applied to SEBI and some results would have come? We have not received any response from SEBI. We are working with Government of India to protect the interest of the company. Okay. Sir, coming to the Mumbai Refinery, earlier we used to plan some expansion here in Mumbai Refinery and with a integrated petrochemical complex in refinery. Is this project still on or now that is basically will be taken when the new management comes on board? Still in exploration stage only, that project. Still we have to see a lot of things, whether the feasibilities and taking up the new capacity at this point of time. Still in exploration stage only on that project. Okay, sir. Thank you, sir. Thank you. Thank you. We'll take our next question from the line of Sabri Hazarika from Emkay Global. Please go ahead. Yeah, good morning, sir. I have two questions. The first question is relating to your marketing segment performance. Looking at the GRMs and the overall throughput, was there any pressure on the marketing segment during Q1 for BPCL specifically? No. As such, there was no pressure. If you see last quarter, there had been increase in the prices, which was based on the increase in the costs in the international market. We have been able to pass on the increases. There is no, as such, anything specific to BPCL. Our prices have been in tandem with the market. All right. You would not be disclosing inventory figures from now on, right? Can you give us some sense on how the core performance- Actually, why we have taken this view, even if you see as an oil and gas industry, this inventory positioning is a part and parcel of the entire business. It is not a correct view to be taken, separating the inventory gain losses from the normal marketing operations gain or loss. Many of the times what happens, if you have any old inventories in your system, maybe you may not pass on the benefit to the customer. Sometimes if the prices are at a comfortable position, you can earn more margins. It is not right to separate the inventory gains from the normal margins. That is the view we have taken. However, what we are indicating for Q1, the marketing gains will be roughly around INR 800 crores in terms of the marketing gains. We don't want to separate the marketing gains from the marketing margins. Right. INR 800 crores of marketing inventory gain, roughly you are saying could be for Q1. Okay. IOCL generally gives a price lag and inventory-adjusted GRM, which they say is a normalized GRM adjusted for all the discrepancies. Do you have some similar kind of a figure? Let me explain actually why there is no relevance for core GRM in respect of BPCL. If you see, on average, we keep around 1.5 MMT- 1.6 MMT of crude inventory at both the refineries. Generally, the coverage is around 15 days. When the pricing structure of the crude is around 30 days average, when we are keeping an inventory of around 15 days, and we are following a FIFO-based accounting policy, I don't think any inventory gain losses to be separated from the entire my refinery calculations and the GRMs. Logically, it is not a fair approach to remove the inventory gains, because our inventory is only around 15 days only. Only those cases at the end of the reporting period, if there is any crude write-down happen due to a huge fluctuation, that I agree, then anyhow, that we reported as an exceptional item. Otherwise, in the normal circumstances, if our inventory is around 15 days, we shouldn't core GRM separately. That is the reason we have stopped calculating the core GRM. Our inventory levels, we can give even March 2021, our core inventory levels are around 1.53 MMT, and June also it will be around 1.59 MMT. There are no significant changes in the terms of inventory positions. Second question pertains to your petrochemical segment. The PDPP two units, as you've mentioned, has commissioned, and we have seen your depreciation also go up by 14%- 15%. Has it been partially expensed in the P&L, and was there any income impact from that project? Very small impact, because still these two units are under stabilization. Generally, any of these large complex projects, it requires a little bit time for stabilizing. Definitely once commissioning is happened, you have to take the depreciation hit immediately. Otherwise, on the revenue side, very significant during this quarter, it will be less than INR 10 crore only during this quarter. Hopefully, once stabilization completes, we are expecting in the next one or two months, then significant numbers can flow into financials. This will be reported as a separate segment, right? No, not yet, because this quarter is very small. We have to review in the subsequent quarter, next quarter, how it happens for reporting as a segment. Okay, sir. Thank you so much. All the best. Thank you. Our next question is from the line of Aishwarya Agarwal from Nippon India. Please go ahead. This is Aishwarya from Nippon India Mutual Fund. I just want to understand that how, as you people are very conversant with the existing infrastructure and the capabilities of BPCL. My question is, there are many activities which the company is not able to do because of being a PSU company. Going forward as we go for disinvestment and it goes into the private hand, what are the scope of value creation you have in mind? Presently, even whether it is a privatization continues or not, but otherwise, we have good CapEx projects in pipeline. This year also, we have taken up a CapEx project target of around INR 10,000 crore, and the foreseeing will feature next year also, more or less around the same level of CapEx projects we have. Definitely we are focusing a little bit on the non-core areas, non-fuel businesses. We are yet to explore on that. Otherwise, we have a still good CapEx projects, and mainly on the upgradation wherever we foresee any value in the refinery side by incremental investment where we can upgrade the product portfolio. Those things we are looking at it. Those opportunities we are exploring, and accordingly, we are planning our CapEx projects. In fact, we have two projects in MR for optimizing, revamping the plants there. One KHT revamp and LOBS revamp, which is around INR 1,200 crore, which is expected to come on stream by March 2022. Yeah, sure. Is there any scope of cost reduction? Cost reduction is a continuous exercise. Every year we carry out the cost control and cost optimization exercises. We keep on optimizing wherever it is possible, wherever economies of scale is available accordingly. Cost optimization is a continuous exercise. Sure. Thank you. I thought maybe we have some other things which vary absolute or objectivity in terms of what kind of cost reduction is possible. I guess that has yet to come up. Anyways. Thank you. Thank you. Our next question is from the line of Mayank Maheshwari from Morgan Stanley. Please go ahead. Yeah. Hi, sir. Thanks for the call today. I had two questions. One was more related to the Kochi Refinery GRM. Is the improvement in GRM largely a function of the startup of the petrochemical project? This quarter, it is not significantly visible in terms of the GRM improvement on account of PDPP. The PDPP contribution is very insignificant this quarter. This PDPP contribution, as sir said earlier, is around less than 10 crores. We have three units. Two units has been commissioning, and it is getting stabilized. Third unit, you have two trains. That is the acrylic units. You have two trains. One train has been commissioned and one is under commissioning phase. The stabilization process will go on in Q2 also. Post that, we should be seeing a ramp-up in productions. You also have an MSBP project in Kochi, which has been commissioned during the Q1 fully. Okay. Just to get some clarity in terms of how do you think about the utilization rates for the acrylic project, et cetera, by the end of the year? It would be difficult to give a projection by end of year at this point of time. See, these are new petchem units, so the stabilization will take some time and support from the licensor, and it is right now being done virtually. It will take a little time for the ramp-up to happen. We won't be able to give any production figures as of now. Okay. My second question was more related to if you can give us some idea in terms of your alternative energy plans around gas, EVs, hydrogen, et cetera. If you can just give us what is BPCL doing around that front. Gas, we have interest in 17 geographical areas where construction is ongoing. In around eight GAs, we have already started CNG supply. Altogether under BGRL, we have spent around INR 800 crores CapEx, and in the first quarter, it is around INR 150 crores CapEx. On the EV front, on a pilot basis, we have started these EV charging stations in various states, and also battery swapping facility in two states. These are on pilot basis, and we are just looking at incremental learnings from these activities. Also, I'd like to add that further in our existing retail outlets also, we keep on adding CNG facilities. In around 637 number of retail outlets, we have CNG dispensing facility also. Got it. Thank you. Thank you. We'll take our next question from the line of Vinit Joshi from Goldman Sachs. Please go ahead. Thanks a lot for your time, sir. I just wanted to check what has been the cumulative investment in your petrochemical business now that a lot of the capacities are closer to commissioning. Can you also help us understand what could be a normalized EBITDA that you can generate from these investments? A ballpark number, right? Because this is something which we haven't really modeled. Any understanding of that range will be quite useful. Thank you. For PDPP project, the total CapEx is INR 6,285 crores, which is under commissioning, as I was saying earlier. The incremental GRM at current prices will be a minimum of $1 on a full year basis. Beyond that, we'll not be able to comment on the petchem margins as such. This will be captured fully in the refinery business, this $1 is on an overall BPCL throughput, right? Including Bina as well now, or? This we are looking at refinery level. Refinery level, marketing still we have to get experience of marketing the petrochemicals. Maybe in couple of quarters, we'll get a good experience of the marketing of petrochemical, we'll be in a better position to tell what would be the contribution in terms of the marketing of petrochemical. Refinery, broadly, that is what we are looking at it. Additional value generation. This $1 is for Kochi or is for the whole of BPCL, sir? Is this net of the cost? Okay. Kochi only. This is net of the cost, right? Your costs will also be going up with the complexity. Okay. This is at GRM level, yes. At GRM level. Okay. What will be the cost increase? Because I am trying to understand at the EBITDA level, what will be the improvement? EBITDA level will be difficult because already depreciation you have seen around INR 170 or INR 150 growth depreciation per quarter. We are not sure EBITDA level, we have not worked out anything at this point of time. Overall, GRM level, my GRM at least $1, that is what we are expecting. Okay. Thank you, sir. Sir, can you tell us what is your hydrogen producing capacity in your refineries? You must be producing some gray hydrogen. Do you have any plans to convert some of that into green hydrogen or blue hydrogen in future? Is this something that you are looking at? Hydrogen, whatever is being produced in refineries right now is being used within the refinery. Also, this MSBP project will also add some incremental hydrogen to the system, which will be again used within the refinery premises. We as such don't have any proposal to market hydrogen as of now. Of course, going forward, we'll look it as an opportunity. Okay. Thanks a lot for your time, ma'am. Thank you. Thank you. Our next question is from the line of Vidyadhar Ginde from ICICI Securities. Please go ahead. Thank you. My first question is on Bina. If you could share with us the GRM and profit loss for the quarter. Bina GRM is $5.2 for the Q1, and it's a loss of INR 64 crore. How much? INR 64 crore. INR 64 crore loss. Okay. The second question was on what is your volume? How have your volumes done in July? If you have some data on August on petrol and diesel to give us some indications. July figures I'll share with you. July 2021 versus July 2020, if we do, there is increase of 21.50% for MS, while for HSD it is 11.68%. LPG is 6%, aviation is 16%, overall that's it. On an overall basis, around 14% there is increase. Could you compare with the give us with versus 2019, if you have? 2019 figures, for MS, there is a growth of around 5%. For HSD, it's around 8%. Still negative? Yeah. For LPG, it's a growth of around 10%. Overall, portfolio-wise, there is reduction of approximately some 6%. Okay. Lastly, if you permit, just wanted to express some view on this sharing of inventory gain and loss. One, that I think most of us, at least I calculate, make my own assumptions. If you don't disclose, I disclose my estimates in the report, which I think investors want to know, one. If you don't give us, I think multiple analysts will give different numbers in their reports. Secondly, if you look at three other peers of yours in the sector who have also stopped disclosing GRM, one of them has even stopped disclosing GRM. If you look at the stock performance of those three companies since they have started doing, it's not very encouraging stock performance. Two of your peers in the OMCs are trading below book values. I'm not very sure not disclosing will help. I think next time there is a big inventory loss, you guys will probably say, "This was the inventory loss, otherwise our GRM was so much." I just want to suggest that you should have a relook at your policy. I don't think it is going to really help with investors. No, it is not point of actually disclosure or not disclosure, whether how the stock prices will move. What we are having a view, for example, already I have explained in terms of declaring for refining side. On an average, any refinery is holding an inventory of 15 days. I don't think there is a concept of any separate calculation for core GRM. When your purchase prices are on an average of 30 days basis, benchmarking prices, only any sudden fluctuations may, if there is any inventory losses for the reporting period, definitely that we report it in terms of refinery. In terms of marketing, already I have indicated around INR 800 crore. Correct. There also, we are having a view. It is not right to separate the inventory trading gain losses from the normal marketing margin because it's a part and parcel of the overall business. That is the view from our side. Sir, the only point I'm making is that at least some of us will give our own estimates, even if you don't disclose. Okay. Different numbers will float among investors. I understood. Estimates of investors. I understood. Point noted. Thank you, sir. Bye. Thank you. Our next question is from the line of Nitin Tiwari from YES SECURITIES. Please go ahead. Good morning, sir. Thanks for the opportunity. My first question is a bookkeeping one. If you can give us the breakup of CapEx in this quarter, in terms of segments, and also for the entire year, what are your plans that can be broken up in segments? That is one. Okay. I'll answer to your question, Nitin. For financial year 2021/2022, for refinery, it's around INR 2,600 crores. For petchem, around INR 950 crores. For marketing, it would be around INR 3,300 crores. Equity investments in BPRL, some INR 1,300 crores, while remaining one for INR 1,700 crores. Overall, it comes to around INR 10,000 crores of CapEx for 2021/2022. Okay. The INR 4,000 crores that you've spent in 1Q, how is that broken up? Yeah. From that, around INR 2,417 crores is for BORL itself and some small investments. For BPRL, further investment of INR 400 crores. For refinery, it's around INR 450 crores, and marketing, it's around INR 730 crores. Overall, it comes to INR 4,000 crores. Understood. My second question is around lubricant sales. What was our lubricant sale in this quarter, and how did it perform as compared to March quarter and June quarter last year? Lubricants numbers as such, the increase is of some 96% in comparison to the last quarter, that is Q1. Previous year. Previous year. Any number that you would want to give in terms of the volume that we sold, quantity in this quarter? No, no. Those numbers are not- Numbers, we can share offline. No worries. One more, if I may, question just, please. When we were planning the Kochi expansion, at that point in time, the guidance was a consistent one that we are going to see improvement in refinery margins other than the petrochemical projects also. What we have observed over a period of time is that Kochi Refinery margins more on a larger basis are even lesser than the Mumbai Refinery margin. What is the reason behind that, and is that a phenomenon which is going to continue? I'm saying ex of petrochemical projects. If you see last two years, actually due to the COVID, we are not up to the full potential of the physicals. Maybe we have to wait and see once we reach the full potential of the physicals. We can find out what exactly the envisaged benefits we have extracted from the Kochi Refinery and whether we are realizing or not. There are two points. One is the Brent-Dubai differential is one point. Second one is the physicals. As long as physicals, we are not getting the full potential, we cannot comment anything on this performance of the Kochi Refinery in terms of the project execution estimation. When you say we are not realizing the full potential of Kochi refinery. In terms of the physicals, because due to the demand, still the demand is not picked up last year and current year. Once the physicals come back to the normal levels of peak we have, I think throughput was 15.8 MMT something in 2018- 2019 throughput, right? Three years ago. Yeah. Our throughput was, and if you see in the first quarter, was only 88% of the nameplate capacity. Nameplate capacity. We can go up to 115%- 120% also we have gone earlier years. Maybe again after the complete reversal of the COVID impact, maybe we have to relook at it and we can give any numbers on this. Sure, sir. Okay. Thanks for taking my questions. Thank you. We'll take the next question from the line of Rakesh Sethia from HDFC AMC. Please go ahead. Yeah. Hi, thank you for the opportunity, sir. Just wondered if you can help us understand where we are in terms of privatization process, and the role BPCL is playing as of now. If I understand correctly, I think last quarter we were updated that the data room has been opened and BPCL is addressing some queries. Any update further to that would be helpful. Only update, as of date, we have a very limited role in this entire process. Like last quarter, what we have said, the data room was opened. There were queries we have received from the bidder, and the process is going on. We have replied for some queries, and some queries we are yet to reply. From BPCL side, the process is going on. All other processes, only Government of India, DIPAM is only handling. Our role is very limited in this. Sir, when the queries come, does those queries come directly to you from the bidders, or it come via the transaction advisor? Transaction advisor. He is the middle person, transaction advisor. Any correspondence will be through transaction advisor. Okay. Sir, you commented about this inventory gain and losses, and one comment you made that crude prices are based on 30 days. Did I hear that wrong? I thought crude prices, they are benchmarked on a daily prices. Maybe you will have some average. Are we saying- Most of the procurement is on term basis. Even spot also, most of the pricing is based on the 30 days average benchmark. There is no daily price fluctuations will have my procurement on daily basis. Whatever during the entire month, whatever I purchase, the benchmark applicable prices for the entire 30 days average quote. That is the case when we are having an inventory of 15 days. We do not try to calculate anything on account of inventory gain, losses and core GRM. Only as a reporting period, if there is any sudden fall happens, if there is any write-downs we take, yes, we have to report it. That is what we always report, what is the inventory write-downs, if there is any sudden fluctuations happen to fall. Sir, pardon my understanding, but if I understand correctly, those benchmarks could be, let's say Brent or a Dubai. When the average is being done, anyways, those are daily averages, right? Effectively, you are paying nothing but the average price for the month in some sense, unless you have different points of crude sourcing at different point of time. Is that understanding correct? That quantity is very small. The maximum possible are monthly average pricing only. The spot and the daily pricing will be very insignificant. Sir, the limited point would be, the reason we ask for inventory gain and losses would be to look at the operational performance, which would mean that, let's say to compare a refining margin, what was your gross margin for any one particular asset you would have. We would need to know what was the average realization during that period, and what was the average normalized cost for that period. I understand that there's a pricing lag and there's inventory lag. We thought that because IOCL was doing in the past and you were also doing, it was helping us to get a better sense of the core profitability. I would still urge and request you that if you can relook at your policy and try to get a better sense of. Our view is same only because I compared to IOC. IOC, the number of days inventory holding may be definitely higher than BPCL because as a rollover, when we are keeping a 15 days average inventory and we are following a FIFO-based accounting, I don't think any separate calculation and separating the inventory gain also from the normal GRM calculation, it gives a different picture, I feel. My performance evaluation should be at a GRM level only. When we are keeping around 15 days inventory. That is our view, but we'll see. Understood, sir. Sir, one last question on the petrochemical. The $1 increase, expected increase in the Kochi GRM, that is just on the refining side, and there would be some EBITDA contribution from petrochemical as and when the volumes would flow. That understanding is correct, right? Yeah, right. Understood. Thank you very much, sir. Thank you. Our next question is from the line of Arun Kumar from ADES Investments. Please go ahead. Yes, I just have two questions. First, regarding the GRM, earlier. Sorry to interrupt. Mr. Arun Kumar, your voice is not clearly audible. If you're in a speaker mode, can you switch it to handset, please? Sure. I wish to ask, earlier there was a certain restriction on price movements in the earlier months of February, March, and supposedly May as well because of the election. Daily price movements were not happening at that time, at least. Now at least from the government side, the petroleum margins, petrol margins, you are free to increase the prices based on the international prices. Would there be any GRM gains, and what is your outlook for the coming quarters regarding that? You have to see the margin retention and outlook on a longer-term basis. We cannot compare only intermediate periods of one month or 15 days. On an overall basis, we look at it, we can maintain the same similar level of margins on an overall basis for long-term basis. Okay. It's not intermediate period, one month or two months. No, on quarter-on-quarter basis, sir. Even quarter-on-quarter also, we don't see. Overall for a particular year, we can see. Hopefully, we can have the similar level of margins. That is what we look at it, overall year basis. Sure. Any updates on disinvestment? When can it be completed? I already clarified our role from BPCL's side is very limited. Whatever media reports are coming in the last couple of days, the same expectation we are also having. Okay. Thank you. That is all from my side. Thank you. Our next question is from the line of [Swati Goon] from InvestYadnya. Please go ahead. Yeah. Hi, thank you for the opportunity. Hello, can you hear me? Yes. Okay. I just wanted to know information about the GRM and what will be the expected GRM? GRM for BPCL for the quarter $4.12. For Mumbai Refinery is $4.35, and Kochi Refinery is $3.90. For BORL, which we have now full control from 30th June, it is $5.2. Okay, fine. Thank you, ma'am. Thank you for answering. Thank you. Our next question is from the line of Kiran Naik from Modi Fincap. Please go ahead. Yeah, thank you for giving me an opportunity, sir. Can I ask a question on BPCL's disinvestment? Yeah, go ahead, please. Yeah. The government is trying to sell the BPCL company as a whole to any one stakeholder who is giving a good tender. It will be selling the land also which the petrol pumps are on in the cities, on that land also will go with that parcel? Government is proposing to sell their entire stake. When they say entire stake means the entire assets or liabilities must have same proportion. Entire stake they are going to sell. That is the proposal, entire equity. They are not proposing anything to sell specific assets or specific liability set off another thing. Land also will get sold with the tender, right? Definitely. That is assumed. I don't know why this doubt has come. When they are selling the entire stake means entire stake. Okay, sir. Thank you, sir. Thank you. Our next question is from the line of Varatharajan Sivasankaran from Antique Limited. Please go ahead. Thank you. Sir, during your briefing, you mentioned something about the under recovery part of it. You said there was zero under recovery on kerosene as well as LPG during the quarter. Is that what you mentioned? Right. Okay. LPG- Sorry. LPG, was there any under recovery during the month of June, or was it more like overall for the quarter you are mentioning there is not? Small under recovery because placement under recovery, sometimes if you don't have any product in certain pockets of supply zones, you have to move product from one zone to another zone. Maybe a little bit under recovery will be there. Otherwise, overall the subsidy portion is insignificant during this quarter, and as per anyhow there is no under recovery. Fair enough, sir. I would assume that there is zero outstanding with the government, or is there something pending for the previous quarter? We said around INR 233 crore total outstanding from the Government of India on account of various claims. Fair enough, sir. Sir, one last question on this LPG again. Is there any explicit instruction or guidance from the government regarding this LPG compensation for the rest of the year? Nothing. No such guidance. Okay, sir. Thanks a lot. Thank you. Our next question is from the line of Pinakin from JP Morgan. Please go ahead. Mr. Pinakin, go ahead. Thank you very much. Sir, my first question is that now given that BORL is 100% owned by the company, going forward, will it be part of the standalone accounts or will it be part of the consolidated accounts with more disclosures? Still it is a separate legal entity. It becomes only fully controlled by BPCL entity. Till we have any other plans, it will be a separate standalone and BPCL will be a separate standalone. Only in the consolidated account, definitely there will be a line building consolidation because it becomes a fully subsidiary. Sir, there are no plans to merge it within BPCL standalone entity. Are there no advantages for merging? No, we are exploring. There may be some synergies definitely if we merge it. We are exploring, at right point of time we'll communicate if any decision arrives. Sure. My second question is that the petrochemical complex is expected to add $1 to GRMs. Going back, sir, when the Kochi Refinery upgradation was done, there were expectations that it will add $2 to GRMs, we did not see that come through. In terms of the petrochemical addition to GRM, how confident we are or what needs to happen in the external environment for these incremental margins to be realized? This incremental $1 GRM is based on the current price trend. If the prices hold with the current cracks, yes, we expect it to have this kind of a GRM impact. Prices, nobody can forecast. We'll have to see. Ma'am, when you said prices, you mean for which product prices need to hold at current level? The prices for products of acrylic acid, oxo alcohols, and acrylates. Understood. At current prices, if they hold, then we can see $1 of GRM incrementally. Correct. Understood. Thank you very much, ma'am. Thank you. Our next question is from the line of Manikantha Garre from Axis Capital. Please go ahead. Good morning, sir. Thanks for providing me the opportunity. I have two questions. First one is on the EVs business. You mentioned that you're doing some pilot edition EV charging stations and charger swapping editions. Far, we have noticed that IOCL and HPCL has announced some partnerships with the likes of Tata Power or NTPC, Power Grid and some OEMs. We have not seen any such announcements from BPCL. Do we assume that these kind of announcements can come only after disinvestment? Is that the case? We are still exploring the entire value chain of EVs. Only on pilot mode, only very small scale may we have done in some locations battery swapping. For a large scale, any tie-ups and other things, still we are exploring the entire value chain. Accordingly will come up our strategy. This EV scenario currently is in a very nascent stage, especially in country like India. Primarily we are doing all this to just accumulate the earnings from the whole evolving EV scenario. Definitely we are also focusing, we are not ignoring this thing. To understand it correctly, you are saying the large scale tie-ups don't have to wait for the disinvestment. Is that the right understanding? Right. Yes. Right. Okay, sir. My second question is on the Mozambique LNG project. Is there any update? Looks like last week there was some progress on that. We can provide some color on the Mozambique LNG project. Where is it currently? Yeah, there is a small progress in terms of capturing the area by the defense forces. That is what we understood. In terms of the force majeure, there is no update on the force majeure removal till the force majeure is continuing. We are expecting something maybe from the lead operator, but otherwise force majeure is still continuing. In terms of the capturing of that area by the defense forces, that is what we got to know. It has been captured by defense forces, evacuated of earlier ISIS. Right. The 6 - 12 months force majeure is still in place is what you are saying, right? Right. Yes. Okay. Thank you so much, sir. Thank you. We'll take our next question from the line of Sumeet Rohra from Moxyn Capital. Please go ahead. Yeah. Hi, sir. A very good morning to you. Sir, my question is a follow-up to the one which you've partially spoken about. This is on the strategic sales. If my understanding is correct, Mr. Pandey has gone on record and said that he would like to complete BPCL and Air India in this financial year. Sir, we've as investors, basically been attending BPCL calls, and what we made to understand was that it takes about five to six months after the financial bids have been received to complete the transaction because of processes like your open offer along with various other SEBI approvals and CCI approval, et cetera. Sir, if what Mr. Pandey had said, if you then back calculate then, is it that the financial bids should be invited in September? Secondly, sir, on the data room window, which has been opened on April 10th, when are we planning to basically close this virtual room, sir? Honestly, we are not aware any of the schedules when the financial bid will open and other things, because I have already explained our role is very limited. Data room, we are giving the data, we are submitting the data. Whatever queries we are getting, we are replying the query. We are not yet decided anything when we have to close the data room window. This entire process is going on between the transaction advisors. When they are giving the queries, we are replying. On other scheduled dates, we don't have any information. No, sir, the only reason I ask this, as investors, it's quite ambiguous because we don't get any updates on these kind of major events which are happening within our company. It's obviously but natural to ask. If you can just get some more information for us, that'd be very helpful, sir. Definitely. We'll try. In case if anything is available, we'll share. Thank you, sir. Thanks so much. Thank you. Our next question is from the line of Soumeet from Capitalmind. Please go ahead. Hello. Sir, I just had one query. There have been talks with this gas distribution companies on revision of the margins that you guys earn from selling the gas in your petrol pumps. What has been the update on that? What is the current margin that you're earning? What is it that you're expecting from this rare distribution? Sir, there has not been a particular any firm outcome from this exercise. We won't be able to comment. Okay. What is the current margin that you are earning there? We won't have this number. We can take up this question offline, please. Okay, thank you. I'll do that. Thank you. Our next question is from the line of Gagan Dixit from Elara Capital. Please go ahead. Yeah, thank you, sir. Sir, what is the value of your crude inventory at the end of the quarter, in U.S. dollar per barrel? Dollar per barrel crude inventory is $70. Okay. At the start of the quarter? Come again, sir? Start of? At the start of the quarter, what is the crude inventory? [audio distortion] Hello? Are you there? Yes. Yeah. You got the numbers, right? Yes, sir. Sir, I'm asking that at the end of this March quarter, what was the value of the crude inventory? $64.72. Okay. My next question is regarding the Numaligarh Refinery expansion, although now it's not the part of the BPCL, is this BPCL fully committed for this expanded capacity offtake from the Numaligarh? Yes. We have a 15-year agreement for taking product. Our eastern region is fully covered for product supply. Okay. As far I understand, is that this increased supply would not be covered by the Northeast itself. I think you need to move out that product to the mainland India. I think there's a substantial cost is involved. Is it whole the cost would be expected to bear by the BPCL for product movement outside the Northeast, or it's something sharing basis among both of you? We need to come back on this. We will come back separately offline. Okay. That's from my end. Thank you. Our next question is from the line of Vishal Thanvi from ValueQuest. Please go ahead. My question on the front of LPG business. As per the LPG rules, it's mentioned that only government companies can receive LPGs from GAIL and everything. Once BPCL becomes privatized, then what will happen? They will be able to take LPGs from GAIL or something, or they have to take from private sources? We don't know. Government of India is working something, but we don't know. Okay. Yeah, this is from us. Yeah. Thank you. Our next question is from the line of Amit Rustagi from UBS. Please go ahead. Yeah. Sir, could you give us the debt numbers for Bina Refinery now after it is fully acquired by BPCL? Bina debt is around INR 7,000 crores. Okay. Now, will it be merged with BPCL, or it will continue to remain or operate as fully owned subsidiary? We are exploring. At right point of time, we'll take decision and accordingly, we'll share that information. Okay. Thank you, sir. Best of luck. Thank you. Our next question is from the line of Vidyadhar Ginde from ICICI Securities. Please go ahead. Yeah, thank you. On this petchem project you have in Kochi, so the feedstock is propylene, and so the GRM which you are talking of is basically based on the crack which you make on the propylene. Is that correct? Yes. The margin between propylene and the petchem product will be captured in the petchem segment as and when you report it as a separate segment, not part of the GRM? If we decide to separate it and show, yes. Otherwise, as of now, it will be part of the normal. No. Secondly, now with this project, once it's fully commissioned, what proportion of your refinery through product slate will be propylene? It's basically your product slate shift is from naphtha to propylene, is it? What was earlier naphtha now will be propylene. How is that? How does your product slate change? From the PFCC unit of IREP, 250 TMT of propylene is going to the PDPP unit. Okay. That is the Yeah, correct, sir. 250 TMT is your share in the product slate? Yes. Okay. My second question is on Bina. Bina's performance has not been great, and I'm sure because when it was a subsidiary, you had a lot of constraints. I'm sure you have some plan in mind. Do you see things improving significantly now that you have full control? If, let's say, in the first quarter, it had been merged, if it had been merged, given some of the taxes you may have saved, could you give us some idea on the kind of benefits you would have if it is merged in terms of savings, in terms of, I think, the CST or some of those benefits probably? We are confident only. We are also hopeful. Definitely there will be an advantage. We have to still explore because there is a process of merger, there is a process of taking approval. Accordingly, once those decisions happen, then we will communicate. No, any numbers you could give if it was like Kochi, if it was a part of BPCL in first quarter, what could have been the savings on taxes? See, number-wise— Okay, CST. CST will be definitely there will be a saving. Yeah. Otherwise, number-wise, it depends on the price movement. The percentage. No, CST, how much was it in first quarter? Any idea? Any numbers there? Or last year? It will be gross savings is there in the quarter. Quarter. If it was part of BPCL. Our incurrence, BORL- How much is the number? I didn't get it. BORL incurrence is around INR 150 crore-INR 160 crore during this first quarter on account of CST. Oh. That could be saved if it was a part of. Yes. We have to see overall what the synergies are. What are the other plans you have to turn it, or are there anything else which is planned now that you have a free hand which could improve the profitability of BORL? Definitely, we have to see some optimizations, because just now we have acquired the different stake. Now the team should work towards that. Okay. Thank you. Thank you. Ladies and gentlemen, that was the last question. I now hand over the conference to Mr. Harsh Dole for closing comments. Ladies and gentlemen, I realize there's a long queue, and lot of questions are yet unanswered. I request you to drop me or the management of BPCL an email, and I'm sure they'll do the needful. Before I end the call, I'd like to thank BPCL management for giving us an opportunity to host the call. Any last comments that you would like to make, Mr. Gupta? On behalf of BPCL team, I thank all the investors for taking part in the conf call. I thank IIFL Securities for organizing this call. We look forward to meeting after the next quarter results. Thank you. Thank you. Thank you. Thank you. On behalf of IIFL Securities Limited, that concludes this conference. Thank you for joining us, and you may now disconnect your lines.