Ladies and gentlemen, good day and welcome to Bharat Petroleum Corporation Limited Q2 FY 2022 earnings conference call hosted by Antique Stock Broking Limited. As a reminder, all participant lines will be in the listen-only mode, and there will be an opportunity for you to ask questions after the presentation concludes. Should you need assistance during the conference call, please signal an operator by pressing star then zero on your touchtone phone. Please note that this conference is being recorded. I now hand the conference over to Mr. Varatharajan Sivasankaran from Antique Stock Broking Limited. Thank you, and over to you, sir. Thank you, Neeraj. Good morning, everyone. It's my pleasure to welcome all the participants and the management of Bharat Petroleum Corporation to this Q2 FY 2022 earnings call. We have with us today Mr. V.R.K. Gupta, Director Finance; Mr. Manoj Heda, Executive Director Corporate Finance; Mr. Pankaj Kumar, CGM Corporate Treasury; Mr. Sukhmal Jain, CL, DGM Pricing and Insurance; Mr. Piyush Borania, Senior Manager Pricing and Insurance. I would like to hand over the floor to Mr. Piyush for taking it forward. Over to you, Piyush. Thanks, Mr. Varatharajan. On behalf of the BPCL team, I welcome you one and all to this post Q2 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 these statements are reasonable. However, their nature involves number of risks and uncertainty that will lead to different results. Since this is a quarterly result review, please restrict your questions to the Q2 results. I now request our Director Finance, Mr. V.R.K. Gupta, who is leading the BPCL team for this call, to make his opening remarks. Thank you, and over to you, sir. Good morning. Greetings to one and all. Welcome to the quarter two post-results con call. Hope you are able to go through our results for the quarter gone by. We'd like to highlight a few points relating to the past quarter. Indian economy is assumed to revise its growth of 9.5% in 2021-22, in which agricultural and allied activities, industry and service sector are likely to register a growth of 3%, 12.3%, and 11.4% respectively due to the base effect of last year. As the country recovered from the impact of second wave of COVID, BPCL recorded the highest sales growth in MS at 15% for quarter two when compared to year-on-year basis in the PSUs space. BPCL has gained market share both in the urban and highway sector, where we are traditionally strong, and in the rural market through strategic network expansion and focused retention. With the commissioning of the MSDP unit at Kochi, we are well-placed to cater to the increased MS demand without resorting to any imports. Similarly, for HSD also, we stood first amongst the PSUs by growing at a rate of 8% as compared to the Q2 of the previous year. Freight transport will continue to be dominated by HSD as a fuel in the foreseeable future. As on September 30, 2021, BPCL has the second highest number of outlets at 19,251 and continues to have the highest throughput per outlet among the PSUs. Further, we have improved our market share from almost 30% to 40% for MS and HSD in the retail space at the end of Q2 of the current fiscal year. BPCL will be aggressively adopting emerging technologies to leverage opportunities. I would like to spell out a few initiatives that have been taken by us in the retail space to further improve share of business. During the year, we propose to expand CNG stations network from 680 to 687 to 1000 by year-end. In the EV space, we already have seven battery swapping stations and 44 public charging stations in 11 cities. For 54 charging stations, installation work is in progress, and we also propose to make our retail outlets as energy stations. Almost around 1000 retail outlets we want to make it as energy stations in the near term. This will cater to all forms of energy needs of a customer, be it MS, HSD, CNG or EV. UFill has been launched in 65 cities so far to give the control of filling the fuel in the hands of the customer through digital experience. BPCL has migrated from conventional point of sale machine to Android-based POS machines that is well integrated with LPDs for correct billing and ensuring right quantity. We have covered all the major ROs, almost 97.12% of RO network with APOS machines, that is Android-based POS machines. Moving to other major products, in LPG, BPCL grew by 4% as compared to Q2 of the previous year. In case of ATF, we grew by 24% as compared to Q2 of the previous year. As we are primarily focused on the international sector, ATF sales is yet to pick up as scheduled international flights are still not allowed to operate. With global gasoline demand near pre-pandemic levels, tight global supplies with reduced exports from China has led to improvements in MS crack to average of $9.7 per barrel in Q2 from an average $8.05 per barrel in Q1 of FY 2021-22. In case of HSD, steep increase in LNG prices coupled with winter heating demand have led to elevated cracks in HSD at $8.13 per barrel in Q2 from $6.9 per barrel in Q1 of current year. When we compare Q2 to Q1 of current financial year, the Indian Basket of crude oil has increased to $72 per barrel from $67 per barrel of Q1, and the rupee has been hovering around 74 per dollar. BPCL GRMs have improved to $6.04 per barrel in Q2 as compared to $4.12 per barrel in Q1 of the current fiscal. The refinery throughput was at 104% of the nameplate capacity in Q2 as compared to 82% for Q2 in the last year. The throughput for both the refineries was at 7.16 MMT for the quarter ended 30 of September as compared to 5.63 MMT in Q2 of previous year. The refineries throughput has considerably improved due to the increase in demand post second wave of COVID. The distillates yield in Q2 of current year is 86.45% as compared to 87.62% for Q2 of the previous year. For Q2, the revenue from operations stood at INR 101,632 crore as compared to INR 65,912 crore for Q2, mainly by increasing volumes as well as increasing the prices. The profit after tax at INR 2,694 crore as compared to INR 2,248 crore in Q2 of previous year. During quarter two, BPCL has acquired 2.69 crore shares, share warrants of BORL held by Government of Madhya Pradesh for INR 72.65 crore, clearing the way of merger of the company with BPCL. Further, the board in its meeting held on 21st October has approved the amalgamation of BORL with BPCL subject to requisite approval. Against the CapEx target of INR 10,000 crore for financial year, we have almost spent INR 6,554 crore during the six-month period. This includes BORL investment of INR 2,472 crore. Our borrowings as on 30th September have significantly reduced from INR 26,315 crore level as on 31st March to INR 21,000 crore. We are excluding the lease obligation amount rounding to INR 7,900 crore. The debt-equity ratio as on 30th September at the end of Q2 is at 0.44, and again at 0.74 at end of Q2 of previous financial year, and 0.3 at the end of June 2021. As on 30th September 2021, we have only around INR 120 crore outstanding, which is receivable from Government of India. There is no underrecovery for FPO, PDS, and only marginal subsidy in LPG during the current quarter gone by. I now invite for questions and for any clarifications. Thank you. Thank you very much. We will now begin the question and answer session. Anyone who wishes to ask a question may press star and one on their touchtone telephone. If you wish to remove yourself from the question queue, you may press star and two. Participants are requested to use handsets while asking the question. Ladies and gentlemen, we will wait for a moment while the question queue assembles. Participants, you may press star and one to ask a question. The first question is from the line of Probal Sen from Centrum Broking. Please go ahead. Yeah. Thank you for the opportunity, sir. I just have two questions. One is that if we look at refining throughput, obviously it has definitely improved from Q1 of this year and as well as from, you know, the very low levels within H1 of last year, rather. Any timelines which you can see where refining throughput will get back to the 8.3, 8.4 million ton kind of trajectory that we were consistently doing, let's say, over 2Q through to 4Q of FY 2020? By when do you see demand, you know, strengthening to that point where we can achieve those kinds of throughputs? Yeah. That's my first question. If you see our peak throughput we have achieved in 1920, we see almost 31 MMT per year. That means almost eight point- Right. Almost close to the 8 MMT per quarter. Sure. This quarter we have achieved 7.16, and the current month based on the current trends, we'll be crossing beyond 100% of my nameplate capacity. What we are expecting Q3 will be around 7.5-7.6 level MMT. Okay. If the demand continuously growing at this levels and the HSD growth comes back to the positive levels, most probably. Yeah. Q4, we may reach the pre-pandemic level of throughput. Okay. For FY 2023, we can safely assume that, you know, everything going well, no other setback. We should be getting back consistently to more than 8 million tons. Right. Everything depends on the HSD growth. We are not in a position to cross the pre-pandemic level of HSD growth, September 2019 levels. Right. We are expecting, in case everything normalizes, the growth will come back by end of this year. If that happens, definitely our throughput will come back to the normal. Got it, sir. The second question, and I know that you don't comment on specific marketing margins, but if I were to derive that number based on the refining margin and also the segment, the blended marketing margins seem to have actually strengthened quite a bit in this quarter compared to the last quarter in Q1. Any specific reasons for that, or it is a function of improving demand that is sort of driven this? I think there is no specific reason. You have to see the margins over a longer period. You cannot compare only on quarter-over-quarter and month-over-month basis. Sure. Sure. The same stand we are taking. On a longer term basis, we will be in a position to return our margins. Is it fair to say, sir, the average blended margin, let's say for H1, what has been there, we can expect broadly a replication over H2 as well, things going, everything else remaining normal? Hopefully, if the crude prices are stabilizing at certain levels, or if there is any improvement in the crude prices, meaning on the positive side for example, if there is any reduction in the crude prices, maybe definitely on a longer term basis, we can return the margins if there is no further deterioration. Got it. One last question, if I may. Any clarity from SEBI in terms of the open offer or not for the listed investments as part of the divestment process? No. Anything you can share with us? There is no development happened in this particular aspect during this quarter too. Our intention is to continue our stake in IGL and Petronet LNG because these are the strategic investments. We are still working on with the Government of India to ensure to continue our stake in these companies and how do we avoid the open offer and that, but there is no development happened in this. There's no regulatory clarity as of now in relation. Still, you know, must come up on that in the future. Thank you. Got it, sir. I'll come back if I have more questions. Thank you so much, and a very happy Diwali to all of you. Thank you. Participants, you may press star and one to ask a question. The next question is from the line of Ramesh from Nirmal Bang. Please go ahead. Good morning, Mr. Gupta. Congratulations on Congratulations on assuming charge. Ramesh, I'm sorry to interrupt you. Your voice is not coming clear. Can you hear me now? Yeah, please. Yes. Yeah. Good morning, Mr. V.R.K. Gupta. Congratulations on assuming charge of Director Finance, and good morning team. Good morning. I just have a couple of thoughts on the operating performance. If you see there's a divergence in the margins, refining margins in Mumbai and Kochi, if you compare it with the year ago levels. How do you explain the increase in Mumbai versus the decline in Kochi? That is the first question. How do you read this increase in the high sulfur crude as a percentage of your normal crude process? For Q2, if you see the refining margins, both the refineries put together average is $6.04. Kochi was at $5.54, and MR was $6.54. This will be Mumbai Refinery, the refining margin generally it will be higher as compared to Kochi Refinery. Mainly we have some value-added units in Mumbai Refinery, mainly LOBS and other products. Otherwise, Kochi Refinery, even we have a Brent Dubai differential of around 1.83, which should be favorable for Kochi Refinery. At the same time, the Saudi Aramco OSPs were higher, leading to eating up the gain what we have in terms of Brent Dubai differential mainly for high sulfur. Otherwise, Kochi would have been better than MR, Mumbai Refinery. Whatever Brent-Dubai differential we have seen in Q2, it was partly offset with Saudi Aramco OSPs being higher, the premium. The second thought is in terms of your expenses. There's a sharp decline in staff costs. How do we see the trend for staff costs going forward? Will it be keeping in line with the second quarter numbers or will it keep changing depending on the extent of VRS? If you compare Q2 of previous year, definitely last year Q2, there is an exceptional expenditure mainly related to the VRS. Yeah. After manpower go out under VRS, today our number of manpower is very lean. We are expecting at this level it will become a new normal for employee cost per quarter. More or less it will be in the similar line. We don't have any plans for any new recruitment. The manpower will be in the similar range only. Okay. In terms of the CapEx plans now, you have done the petrochemical startup. So when do you see the commercial results of the petrochemical project in Kochi? PDPP, out of three units, two units already we have commissioned. Only in one unit after commissioning, after running couple of days, there are some technical glitches we are facing. It is on the stabilization period. We are expecting by mid of November fifteenth, we can tackle the technical problem. Maybe end of November or December, we are expecting that three units can come back to the normal operations. Maybe in Q4 we can see good performance in terms of PDPP output. That is what we are looking at it. Yeah. If I may just squeeze in one last thought. On the merged accounts you have published for the half year, does it now show the 100% integration of the Bharat Oman Refinery after the merger? In standalone, there is no impact of the merger of BOR in standalone account. Definitely in consolidated accounts, since it become a 100% subsidiary company, the consolidation happen on line-by-line basis. It reflects in consolidated accounts. Okay, thank you very much. Diwali greetings to all of you and all the best. I'll join the queue. Thank you. Thank you. you. The next question is from the line of Kirtan Mehta from AV Capital. Please go ahead. Sorry, Kirtan Mehta from AV Capital. Please go ahead. Thank you, sir, for the opportunity. Just to sort of understand further on the petrochemical project that has been implemented, what is the incremental margin addition that you have observed in the Q2? Q2, the margins, if you ask us, because the production is not very significant, very small quantity only, the production has come out. Around 29 or 30 TMT production has come out. If you ask us in terms of the margins, the prices are very good, but the only thing, the product availability is not there in Q2, so the margins may not be very significant, in terms of total contribution in EBITDA from petrochemicals. Do you still consider it to be adding around $1 margins that you have been guiding earlier? Yes. Yes. Yes. To the average refining margin of the Kochi Refinery, sir. That is what we are expecting even assuming not at peak prices of petrochemicals, even in the long-term average, petrochemical prices. If all three units run together, definitely it adds around $1 in terms of the GRM. However, after removing the expenses and other things, the NRM may be lesser than GRM level. Otherwise, we are expecting at GRM level, $1 it should add. Understood. Would you be able to share further updates on the divestment of the stake by government? What are the events which has happened during the quarter and what are the next steps from here? Once again, let me clarify. Disinvestment process is handled by Government of India by Department of Investment and Public Asset Management. BPCL is only facilitating the completion of the formalities. We have already opened the data room, and we continuously providing whatever data requirements coming from the transaction advisor. Some of the clarifications the transaction advisor is sending some for some of the clarification, we are regularly replying for those clarification. This is the process it is going on. Beyond that, we cannot comment anything on this. The Government of India has time and again mentioned in the public also that disinvestment of BPCL shall be completed by March 2022. During the last call, you had mentioned that the meeting for the bidders with the management of BPCL was the next step. Has that been completed yet? Nothing has moved in that direction at least in this quarter. Nothing has happened. Do you still see the Q4 timeline being adhered to, or do you see a risk to the timeline? I know it's again managed by your interpretation of the timeline. We are hopeful. As I think mentioned by Gupta, the process is being run by Government of India. Our role is largely to assist the government and the transaction advisors in facilitating the responses and the data which has to be provided to the prospective bidders. I think that's what it is from our side. Thank you, sir. I'll get back into the queue. Happy Diwali greetings. Happy Diwali. Thank you. The next question is from the line of Amit Mogariya from Axis Capital. Please go ahead. Oh, yeah. Hi, good morning. Just wanted to check, Bina operational and financial details for 1H. Yeah. Bina July, the profit after tax was INR 23 crores, and the GRM was $6.2. That is Q2. Okay. By when you think the merger should get completed? Okay. Generally, the merger process takes place around 6-9 months after submission of our application. Within the timeline, it should happen. Let us see how the regulatory formalities move. Sure. On VDP, if I got it right, did you say that in Q4 FY 2022, you would expect, like, normal operations and maybe that $1 GRM benefit getting realized, or will it be more in FY 2023? That is, we are hoping because mid of November or end of November, whatever technical issues we are facing now with one of the unit, that we can resolve. After that, maybe in Q4, maybe all the three units we can run. If that happens, if the prices are at peak levels, the GRMs will be much more than $1. Prices, if there is any further softening of the prices of petrochemicals, maybe at least, we can keep around $1 GRM. Got it. Sure. Thank you. That's all. Thank you. Participants, you may press star and one to ask the question. The next question is from the line of Mayank Maheshwari from Morgan Stanley. Please go ahead. Thank you for the call, sir. Just a couple of questions. First one on the marketing side. If you can just share with us in terms of your market share around diesel, gasoline, and some of the other key products on the industrial side. For April to September, BPCL in MS retail, we have 28.96% market share. HSD, it is 29.37%. Industrial and commercial, it is 18.61%. I'm talking about half year. Okay? Mm-hmm. LPG, it is 26.76%. In case of quarter, MS it is 29.22%. HSD, it is 29.91%. I&C is 18% and LPG is 26.98%. Overall, we have a market share of 24.32% for the quarter. Ma'am, can you just talk a bit about in terms of your strategy now going forward, considering the focus that you were talking about on the highways, et cetera. Can you just talk about how you're kind of trying to integrate the new energy side of the business along with the stations, and what are the plans around that, and how are you kind of thinking about deploying CapEx around it? Yeah. One is in the marketing side. Actually broadly, two, three things we are focusing. One is making some of the major retail outlets as energy stations. This will cater the needs of MS, HSD as well as CNG, plus the new alternative fuel requirements mainly for energy stations, mainly for charging points. Beyond that, in a large scale, we are putting good amount of investments in the digital. There is a complete changeover of customer experience. Maybe some of the initiatives recently we have launched. One is that UFill where the customer can make the payment through QR code and they can go to the retail outlet. Just they can scan the QR code and they can take the product, and it will ensure the correct quantity and value product. These are the digital initiatives we are taking. Beyond that, we are refocusing again on putting more investments in the convenience stores, mainly for retailing at retail QR code. These are the broader themes we are focusing in retail. Charging stations, putting more gas facilities, either CNG or LNG at highways, and plus consumer retailing for convenience stores. Broadly in retail, we are doing this. During this year. This one will, they may complete before that date. Otherwise from our side, our role is very limited, only providing the land and replying to the queries. Second thing, discussions with the management not yet happened in Q2, and we don't know what is the schedule of that and other things. Beyond that, we cannot comment anything in the process. Second thing, the business side, the retail outlet expansion, we have current quarter, we have commissioned around 485 in Q2 and around 130 outlets we have commissioned in Q1. Maybe another 400 or 500 outlets we are going to commission in this year. Maybe by mid of next year, we may close it as a network expansion. Other initiatives we will focus to improve our market share. Okay. Sir, I mean, on the LPG part. LPG, what are your questions please? No, no, sorry. I thought you say, if I heard correctly, you said that the total outstanding is only INR 120 crore. That's all the outstanding from government? Right. Right. Yes. Yes. Yes. Yes. From Government of India, the total recoverables are only INR 120 crore. Because whatever small subsidy after submission of the bills, they are continuously making payment. Otherwise there is no major outstanding. We are at INR 120 crore. Okay, sir. Thank you so much, sir, and I wish you all the best. Thank you. Thank you. The next question is from the line of Sabri from Emkay Global. Please go ahead. Yeah, hi. This is Sabri Hazarika from Emkay Global. I have three questions. First one relates to LPG. You mentioned that, I mean, LPG do not have any subsidy right now. Considering the sharp hike in global LPG prices over the last few months, are you making positive margins on non-subsidized LPG or are you absorbing some? On margins, we cannot comment anything on the margin. Subsidies, yes, in some particular periods of time, there is a small subsidy in certain markets. Overall the subsidy component is very small what Government of India is reimbursing on the subsidy. On margins, we cannot comment anything on. Okay. Second question relates to your CapEx. You said around INR 10,000 crore is the CapEx for FY 2022. FY 2023, what would be the guidance? As of date, we have certain projects in our talks. The feasibility studies are going on. We are not at concluded stage what is the amount we have to commit for next year. Excluding those new projects, the normal CapEx we are expecting around INR 10,000 crore for next year, 2022-23. In case if anything we conclude on the new projects, definitely these numbers will go up. Otherwise as of date, the next year normal CapEx we are expecting around INR 10,000 crore. If you consider strictly project-wise, I guess, you have included the polyol project in this or not? Not for next year, not a big amount, but still we are reworking on the total numbers for polyol. Once we conclude accordingly, there may be a revision in the number. Okay. Retail Outlet addition annually will be around 1,500-2,000. That's right? Next year it may not be that much. This year it will be 1,500. Maybe 1,000 or 1,200. We have a target of around 1,500, but we may close around 1,200-1,300 Retail Outlets. Okay, sir. Sir, last question is related to again it's clarification on this PDPP. You have mentioned that $1 GRM accretion will happen to Kochi Refinery. That is because of producing propylene versus LPG. That's right? Propylene versus LPG plus propylene and petrochemicals price differences. Both put together. The final value addition at GRM level, only propylene to LPG, that conversion, whatever differential is an advantage. Nice. From propylene to conversion to the petrochemicals, whatever value addition, both components put together, definitely it should add $1 a year. You are saying that petchem segment, whatever profit comes, for example, the difference between, say, Butyl Acrylate and propylene, that difference is also captured in this one dollar? Right. Assuming not at the current peak prices, on a long-term average. This we are talking only at the refinery level. Further, there will be marketing margin. Yeah. There will be some small marketing margin. Marketing margin will be on top of that. That will be based on the Indian demand condition. Right. Okay. Thank you so much. Thank you. The next question is from the line of Manikantha Garre from Franklin Templeton. Please go ahead. Good morning, sir. Just wanted to check on your earlier statement. You were saying that by middle of next year, RO addition should help you maintain market share. Does that mean that after that your RO, retail outlet addition may decelerate? Is that what you are alluding to? No, no, not this period. Like, for example, last couple of years, we have made additions of around 2,000-3,500 Retail Outlets over a period of two years. The expansion may not be that magnitude. That is what I'm trying to say. Maybe wherever important markets are there, those important markets we may add Retail Outlets, but not like every year addition of 1,000-1,500 Retail Outlets. Okay. What would be those markets that will be focused on high-debt and lower risk? Is it? Yeah, right. Sure. Understood. The second question is on the digital side. I think you are mentioning that a lot of investments are going into digital as well. Earlier, I think you have highlighted UFill. Yeah. What are the key digital initiatives that you have implemented so far which are helping you, where you have seen a lot of traction? Can you please disclose? We are working on three, four themes. One is one customer and chatbot and in retail UFill and a new loyalty program. Many initiatives we are working on it. Whatever we have implemented, two important things we have implemented. One is UFill we have implemented. It is working well. Second one is migration of conventional point of sale to Android-based point of sale. These two initiatives already we have completed. In some of the non-marketing areas also we have done some digital initiatives, mainly command control at one particular single place. We can see entire all over India what is going on at various depots, at various retail outlets, and including the refineries. There are many initiatives we are taking, but under working progress. Maybe by next quarter we can come and explain what exactly the initiatives, how the customer experience is changing. Understood. Just on this point only, how do we quantify the benefits of digital initiatives you are doing like now? Is it more on the costs or the customer retention or the revenues? How do we quantify this? How do you think about the quantification? In terms of quantification, the basic objective will be the customer experience. Definitely, it will add on the volumes, but we are not sure what extent actually it can help because the initiatives have started just now. Maybe after couple of quarters, we can work out what exactly there is a rub-off on account of the digital initiatives in terms of the volumes. Definitely there is a different customer experience. Sure. Just one last question on this, and then again, I think you have started door delivery of, this, I think petroleum diesel also, right? Like some startup. Yeah, jerrycans. How is the traction there? You know, who are the customers who are utilizing this predominantly? We have two initiatives here. One is door delivery through bowser. Second one we have recently launched selling of diesel through jerrycans. It's a 20-liter jerrycan, so that from retail outlet through a sealed jerrycan, the product can reach to the customer. For example, who are the consumers mainly for bulk sales and diesel sales. If they want any diesel they need not come to the retail outlet. Straightaway this 20-liter packed jerrycan can reach to them. In a big consumers, mainly for any housing societies and any industries, if they want large scale diesel consumption, they can take this product through bowsers. Today, presently we are having a FuelKart of around 537 members we are operating bowsers. On these, you earn more marketing margin? The margins are everything same only because this is the RSP, whatever margin is loaded with the customer, from there only the sharing will happen. Otherwise marketing margin should be more or less same only. It's only we are delivering the product at customer point instead of a retail outlet. That is an additional cost for you. Yes. Maybe dealer margin is also there. There may be some sharing from the dealer margin. Sir, yes. There is a delivery assistance scheme under which we recover this cost. Recover from dealers? Yes. Okay. Okay, sir. Thank you so much, and Happy Diwali to you as well. Thank you. The next question is from the line of Iqbal Khan from Edelweiss. Please go ahead. Hi. Thank you. My question is answered. Thank you so much. Thank you. The next question is from the line of Amit Rustogi from UBS Securities. Please go ahead. Yes, sir. Could you clarify that, the open offer required for IGL and Petronet? We got some clarifications from SEBI, so what did we hear from them? As I already have clarified, there is no development happened during this quarter. Once again, we are saying that we have no intention to sell our stakes. We want to continue stakes in these two companies because these are the strategic investments. Otherwise there is no development happened in that open offer side, exemption for open offer sale during this quarter. This means that the open offer is applicable for Petronet and IGL. It means SEBI has not given any exemption. As of date, as per SEBI regulation, that was. Okay, sir. Got it. Sir, thanks a lot, and wish you all the best and a Happy Diwali to all the participants. Thank you. Thank you. The next question is from the line of Ramesh from Nirmal Bang. Please go ahead. Yeah. Hello. I just have Sir, your voice is not clear. That's all. Is it okay now? Yeah, not so- There is lot of disturbance from your background, so lot of airy sound coming. Yeah. Is it okay now? Yeah, better. I just wanted your thoughts on the future prospects for Bharat Petroleum based on the numbers you have shared for the second quarter. Assuming these sort of margins, can this kind of profits be sustained given that you also repaid some loans? How do you read the future performance of Bharat Petroleum from here? If you look at the refining performance, I think the BORL has also done quite well in terms of physical performance as well as the financial performance. Since the loan has been repaid, going forward, we see a very good refining margin coming from BORL. Okay. The second thought is on the CGD business with the rollout of the new GAs. Can you give us how many GAs you are going to roll out in, say, the next 2-3 years in your standalone balance sheet? What is the kind of impact it will have on your P&L in terms of some rough indication or in terms of volumes? That would be great. BPCL along with BGRL, we have now 17 GAs, of which we will be spending over INR 8,000 crores in the coming five years. In these 17 GAs, already supply of CNG and PNG has started in around 11. Five is just under construction. Balance in all the 17 GAs, construction is also parallelly going on. On what would be the expected returns, we won't be able to share a number as of now. Just to add, however, the IRR is pretty good, and we have also technically commissioned some 64 number of retail outlets in these GAs. Just to compare, out of that INR 8,000 crore CapEx, which ma'am told, some INR 1,200 crore CapEx we have already done. Yeah. Just to get a sense in terms of when we can see the commercial results, is there any timeline you can give, FY 2023, 2024? If you see all the GAs, these are all long-extension projects. Maybe some projects we may have to complete within a period of five years, some are within a period of eight years. In a phased manner, some benefits will accrue even starting from next year also, some benefits may accrue. What exactly the benefits, we have to work out and see. Maybe next time we can explain. Thank you very much, and wish you all the best. Thank you. The next question is from the line of Vineet Joshi from Goldman Sachs. Please go ahead. Hi, sir. Thanks a lot for your time. My first question is on the ethanol blending. Can you please help us understand how does this impact earnings? We are already at 10% and the target is to go to 20%. Would it mean additional costs or additional margins? How should we think about it? Actually, ethanol blending currently the target of 10%, we are on the way to achieve that target. With respect to the enhanced target of 20%, which we have to comply with in future, actually there are various issues or, you know, unresolved issues which are yet to be figured out. Because first of all, the existing vehicles in market, they can only take in ethanol-blended MS, only up to 10% ethanol-blended MS. The automobile manufacturers have to comply with those new specifications. Other than that, there are also issues like at a retail outlet, there would certainly be old engines only because in a country like India, where life cycle of a car is at least some 5-6 years. The old vehicles also would be there. Whether any retrofitment would be there in the vehicles. There are many unresolved issues which are yet to be figured out and which shall be dealt with jointly with the automobile manufacturers, Government of India and all the OMCs as well as refineries. To chart out a way right now is difficult, but all of us are on the job to achieve the target of 20%. I wanted to understand, is it margin accretive or margin dilutive, right? Because we have gone from like 2-3% to 10%, commendably in the last 3-4 years, right? No, does it- Increase your margins or does it reduce your margins as well? No. There is no effect on the margins as such due to ethanol blending. Totally a timing difference. Okay. All right. Sir, can you also help us understand the business model of EV charging? You know, when you are, let's say, adding a EV charger to your station, is the CapEx done by a third party where you're tying up with some electricity provider and you're making a fixed margin on each charge, which means it's an additional, you know, revenue opportunity for all the outlets? Or does it mean that you also have to incur CapEx to, you know, set up a station with EV chargers? If you can just help us understand. I'm sure it will be evolving, but I mean, how should we think about in future to model the earnings from this business? Rightly you said, still it is evolving. However, the rough estimation in a particular retail outlet depends on the charging points you want to make it available. The CapEx requirement may be INR 3 lakh-INR 10 lakh. That is the range for putting the CapEx investment. As of date, wherever we have already around 40, 50 charging stations we have started, there the CapEx has been invested by the BPCL only. We are looking at various options, maybe with a tie-up with some of the service providers or. We are not sure how do we go about it. Either we make our own investment because it doesn't require any big amount of CapEx investments. Even per retail outlet an average INR 5 lakh, INR 6 lakh if we have to invest, even 1,000 retail outlets if we want to make it, I don't think it will be much beyond a INR 50 crore CapEx requirement. But revenue models, we are not very clear what numbers we can generate, what number of vehicles will come to the retail outlet and charging, what volumes. So that we are not yet clear at this point of time. But otherwise, yes, for giving a facility at our retail outlet, we are clear. I think around 1,000 retail outlets we want to make it as an energy station. This INR 3 lakh-INR 10 lakh rupees that you mentioned, it seems quite small. I mean, how many charging points are you able to install and what sort of charging points are you installing? Are these like fast chargers or super fast chargers? What is the charging time? If you can share anything, any experience that you've had. No, not yet clear because still it is evolving. Some of the manufacturers are. Actually, if you ask me the charging points are not standardized yet, right? So whatever charging point if I create, maybe it may not be compatible for some of the vehicles. It may be compatible only for some of the vehicles. So this technology is still evolving. As long as there is no standardization happens in the charging, we are not sure at what speed this charging can happen, at which vehicles it is compatible. Okay. My last question, I think we've been hearing that, there could be some hydrogen purchase obligation at some point in India where, you know, refineries and fertilizer sector will have to use green hydrogen. How are you preparing for that? If you can help us understand. Will it be like an additional cost to you in terms of meeting that regulation, or do you see this as a business opportunity for you in the long run? We don't have information readily, but however, we'll come back to you on that. We will answer that offline. We'll take the details and come back to you. On the topic. Thanks a lot, ma'am. Happy Diwali to all of you. Thank you. Thank you. Thank you. The next question is from the line of Vidyadhar from ICICI Securities. Please go ahead. Thank you. My question was on BORL. Just wanted to understand that will the amalgamation, because of the amalgamation, are there going to be some tax benefits, some indirect taxes which BORL was paying when it was a separate company and which it won't have to pay now, whereby the emerging entity, benefits from that? Is there anything like that and it can be quantified? Actually, we are foreseeing a couple of benefits after this merger. Hello, Marie Dilemma. Marie Dilemma, can you hear me? Hello, Marie Dilemma, can you hear me? Hello. Hello, Marie Dilemma, can you hear me? Refineries put together, definitely there will be some good benefits. Inventory management also it helps to reduce the inventory carrying cost. Yes, definitely. At the same time, after the merger it becomes a BPCL refinery, so the product movement will happen across India without having any tax implications. Are there any benefits flowing to profitability because of that? Definitely. Any number on that? The numbers we have to work out because these numbers totally depend on the prices. If the crude is at $40 is different, if the crude is at $80 is different. Definitely whatever tax implications there will be in the range of INR 500-INR 600 crore or much higher also at the current prices. Is it the CST of 2% which is the real benefit or what is it? Yes. Yes. Yes. Okay. Secondly, did BORL have any accumulated tax purpose losses which also you can benefit from? Benefits, I don't know. There are definitely some accumulated MAT credits and other than only MAT credit is there, and unabsorbed losses, business losses are there, and unabsorbed depreciation is there. We have to work out from tax point of view, what exactly after the merger, how much amount is available for passing on to BPCL and everything. That we need to work out as a part of this merger. Lastly, on the same BORL thing. In terms of debt, has BORL entirely paid off the debt? Or once the merger happens, some debt will come to the emerging entity? What? As of today, existing VAT loans have been settled with Government of Madhya Pradesh. All other debt is still continuing with BORL. We are exploring how do we reduce the cost of some of these debts because, you know, today it becomes a 100% subsidiary and BORL, the credit rating is also improved. It is in line with the BPCL. With this latest development, we are approaching the bankers to relocate the existing loan structure and infrastructure. Definitely there will be a saving. Before the merger itself, there may be some savings. What was the debt of BORL in end of September? The debt figure is around INR 9,300 crore. Okay. Thank you. Thank you. A reminder to all the participants, you may press star and one to ask a question. Next question is from the line of Saurabh Mundhra from Citigroup. Please go ahead. Yeah. Thank you for the opportunity. Sir, I have two questions. The first one, once again, was on LPG. Now the international price, the Aramco FOB price has gone up from around $660 to $800 per ton. That would require you to raise, you know, the retail price by almost INR 140 per cylinder. If that were to not happen next week, because we usually do it in the first week of the month, can we assume that we could see some under-recovery, subsidies coming back, and especially because this $800 number could even go higher, given the winter tightness that we are seeing right now? We cannot comment anything on the expected price increases. We don't have any comments on this. No, this is not an expected increase, sir. This $800 per ton is a published number. We do know that the Aramco FOB price is $800 for November. I agree. We have to see only after the price increase, you know. Like after next couple of days, what is the price increase will happen, what is the government subsidy where they will keep. Those things we'll comment only after the event happens. Okay, sir. Fine. Second question, just to clarify on the PDPP you said. The refining segment will basically capture both the uplift in margins from producing propylene instead of LPG as well as the petrochemical delta, so the product price minus the propylene price. Is that correct? Yes. Yes. It's only the marketing margin on the sales of the products which, if any, you will capture in your marketing segment. Yeah. That will be additional. Okay. There is no new, like, petrochemical division which you will sort of create new segment. It will just be split between the existing refining and- Right. As of date, we have one separate SBU. We are dealing in the direct product, same business unit we were dealing with petroleum products. Okay. Fair enough, sir. That's it from me. Thank you so much. Thank you. The next question is from the line of Sabri Hazarika from Emkay Global. Please go ahead. Yes, sir. Thank you for the opportunity. I have two questions, sir. First one is relating to the e-ethanol blending only. Is the private sector also into ethanol blending right now? Private sector OMC is also doing it right now? The OMCs are doing. Private sector, they're not doing it. They don't have any compulsion, right? Right. Correct. Okay, thanks. Secondly, any idea on the core or normalized GRM for the quarter? We won't be able to give any number to the GRM for this, sir. Yeah. We are still working on any of the other ways of working on the GRM. Whatever, declared GRM, that only we are calculating. Okay, sir. Thank you so much, and wish you a very happy Diwali. Thank you. Thank you. Thank you. The next question is from the line of Ramesh from- Hello? Hello? Can you repeat? There is some disturbance. I just wanted your thoughts on this, compressed biogas or Bio-CNG projects which all the OMCs are trying to encourage third parties to set up. If you're buying that, CBG at INR 46, how does the economics work and how do you monetize that business in terms of at what price you'll sell? And when do you see that actually reflecting in your business? That monetization part and all that is yet to start. It is still in the nascent stage where we have floated expression of interest. Some 39 number of expression of interest we have floated so far. Some, we are envisaging that expected CBG production against the LOI would be around some 1,000 tons per day. Per se, we are still in the nascent stage of it. Once there is finality to the number of ROs and where we shall be placing, it shall be going forward. As of now, we won't be able to give any further details on this. Yeah. The question is, if there is a guaranteed price for lifting the Bio-CNG from the manufacturer, the INR 46/kg- Mm-hmm. You know, how does it become competitive with the other CNG, which you also are retailing, and how do you know, generate some margins from that? So what is the thinking on that right now, assuming that the INR 46 is cast in stone? That's what I'm saying, that the further economics of it, we shall not be able to share it at this point of state. Still we need to work out, one is the procurement price, second one is, how do we load in the pricing of petroleum product. Yes. Anyhow, production may not come in this year. If we issue the LOIs and sign the agreements by Q4, there is a time lag of commissioning of units by another one year, maybe 2023, 2024, or end of 2022, 2023, we can see the production coming from this unit. That point of time, we can have a better idea. Okay. Thank you. Thanks a lot. Thank you very much. Ladies and gentlemen, that will be the last question for today. I will now hand the conference over to the management for closing comments. I would like to thank Antique Stock Broking for organizing this call, and we look forward you all to meet in the next quarter results. Thank you. Happy Diwali to all. Happy Diwali. Thank you very much. I now hand the conference over to Mr. Varatharajan Sivasankaran for his closing comments. Yeah. Thanks everyone for taking out time to join the call on a Saturday. Have a nice day and happy Diwali. Thanks everyone. Thank you very much. On behalf of Antique Stock Broking Limited, that concludes this conference. Thank you for joining us. You may now disconnect your lines. Thank you.