Ladies and gentlemen, good day, and welcome to Bharat Petroleum Corporation Limited Q2 FY24 results conference call, hosted by Antique Stock Broking. As a reminder, all participant lines will be in a listen-only mode, and there will be an opportunity for you to ask questions after the presentation conclude. Should you need assistance during the conference call, please signal an operator by pressing star then zero on your touchtone phone. Please note that the conference is being recorded. I now hand the conference over to Mr. Varatharajan Sivasankaran from Antique Stock Broking. Thank you, and over to you, sir. Thank you. Yeah. Thank you, Akshay. Good afternoon, everyone. It's my pleasure to welcome all the participants, as well as the management of BPCL to this results conference call. From the management side, we have Mr. V.R.K. Gupta, Director of Finance; Mr. Pankaj Kumar, ED Corporate Finance; Mrs. Srividya, CGM Corporate Treasury; and Mr. Rahul Agrawal, Senior Manager, Pricing and Insurance. We request Mr. Gupta to give a short brief on the results, and then we can move on to the Q&A. I would like to hand over the call to Mr. Gupta now. Yeah. Thank you, Mr. Varatharajan. On behalf of the BPCL team, I welcome you all to this post Q2 result con call. Before we begin, I would like to mention that some of the statements that we will be making during this con call are based on our assessments of the matter, and we believe that these statements are reasonable. However, their nature involves number of risks and uncertainties that may lead to different results. Since this is a quarterly results review, please restrict your questions to the Q2 results. I now request our Director of Finance, Mr. V.R.K. Gupta, who is leading the BPCL team for this call, to make his opening remarks. Thank you, and over to you, sir. Good afternoon, everyone. Welcome. Hope you are able to go through our results for the quarter gone by. Before talking through the BPCL results, let me touch upon the macroeconomic factors. High and volatile energy prices, the ongoing geopolitical tensions, persistent supply bottlenecks, and surging inflation have emerged as a major concern for the global economy. Crude oil prices continue to remain volatile due to the recent Israel-Hamas war. The Indian basket of crude oil had increased substantially during the quarter to quarter, from $77.71 per barrel to $8 per barrel. Due to extension of crude production cuts by Saudi Arabia and Russia till December, and the rupee has been hovering around INR 82-INR 83 range. IMF retained its global growth forecast for 2023 at 3%, however, revised it downward to 2.9% for 2024, and India's GDP grew by 7.8% in Q1, and is expected to be in the range of 5.7%-6.7% for FY 2023-24, according to various agencies. Moving to BPCL performance, our refineries have continued their stellar performance on both physical and financial parameters during this quarter. Bina Refinery went for a planned shutdown in the month of July. However, we were able to maintain the throughput for all three refineries put together at 9.35 MMT for the quarter, which is at 105% of the nameplate capacity, even one refinery gone shutdown. Distillate yield was at 84.06% during the quarter, against 85.73% in the same quarter last year, due to shutdown at Bina Refinery. Percentage of high sulfur crude processing in refineries, it was 70% during the quarter, against 73% in the same quarter last year. The capacity utilization for PDPP plant at Kochi Refinery was around 73% during the quarter. Kochi Refinery processed 2 new grades of crude, taking the total crude basket to 108 grades. There was sharp increase in fuel cracks during the quarter due to global supply dynamics and geopolitical issues. The HSD Singapore cracks increased to $28.8 per barrel in Q2, from $15.5 per barrel in Q1, and MS Singapore at $13.2 per barrel in Q2 from $12.07 per barrel in Q1. Accordingly, BPCL's reported GRM as $18.49 per barrel for Q2, against $12.64 per barrel in Q1. This is before factoring the impact of special additional excise duty and road and infrastructure levy with effect from July 1, 2022. On marketing side, shift of volumes back to private players have resulted in lower growth in MS for PSU industry and degrowth in HSD. However, BPCL has registered healthy growth in core retail fuels by gaining a market share of 0.36% and 1.82% in MS and HSD, respectively, among PSUs. On overall basis, there was sales growth of 6.5% during the quarter year-on-year basis. The main products, MS, HSD, LPG and ATF, registered a growth of 4.1%, 1.1%, 2.3%, and 2.3%, respectively. However, the industrial products have been grown at a 33%. We estimate that the retail MS demand growth will be similar for the rest of FY 2023-24. However, demand for HSD and other fuels sensitive to industrial activity are expected to grow at modest rate. We plan to add around 1,000 new retail outlets during 2023-24. During first half, we have added 300 new retail outlets. We have recently issued advertisement for 14,273 new retail outlets spread across the country for capturing more market for, and increasing our presence. We'd like to highlight some of our marketing initiatives during this quarter. To strengthen supply chain in eastern part of country, we have commissioned Bokaro depot in Jharkhand with a CapEx of around INR 250 crore. We are in process of opening 2-3 new depots in northeastern states to strengthen our supply chain and increase our presence in NE. KSPPL LPG pipeline from Kochi Refinery to Palakkad Terminal with a length of 150 km was successfully commissioned. Our co-branded SBI credit card has reached to a customer base of 2.9 million cardholders.... We have rolled out the Quality Challenge Zero initiative with the aim of guaranteeing that all cylinders in the market, LPG cylinders, are entirely free from defects. This would help in improving trust among the customers and also enhance process efficiency in the value chain. To drive inclusivity, BPCL launched Silent Voices, the pathbreaking initiative in collaboration with Youth4Jobs, to promote inclusivity at selected retail outlets in phase one on 15th August 2023, which will pave way for inclusion of speech and hearing impact people as DSMs or DSWs at retail outlets. Our gas business, construction in our 25 GAs is in full swing. Out of proportionate minimum work program, target of 8,488 inch Kilometer pipeline, till 30th September 2023, we have already crossed the MWP target and completed 16,815 inch kilometer of steel pipeline, and we have completed 452 CNG stations, against MWP target of 119 CNG stations. In our geographical area, where we got operation under various CGD bids rounds. However, we are lagging on PNG connection. The commercial CGS started in 24 GAs till date, out of 25 GAs what we got. We currently dispense CNG in 1,640 retail outlets, and further, by the financial year-end, we aim to add another 500 CNG facilities in our existing MS/HSD retail outlets. In line with our BPCL commitment for net zero at Scope 1 and Scope 2 level emissions by 2040, we have taken up multiple projects in solar and wind energy. During the quarter, 18 MW solar plant at Bina Refinery was commissioned. As on date, we have total installed renewable energy capacity of around 64 MW, and we have projects in progress for about 190 MW, with an estimated CapEx of around INR 1,400 crore in various locations across the country. Our aim is to reach 1 GW in the short term. We are also in the process of setting up a green hydrogen production unit and refueling station at Kochi to supply green hydrogen to buses. We also have plans to put up around 26 CBG plants in the short term. We have approached various municipal authorities for the same. As briefed in the previous con call, our board has approved a downstream petrochemical complex and refined the expansion project at Bina Refinery with a capital outlay of INR 49,000 crore. We are pleased to inform you that honorable Prime Minister on September 14th, laid the foundation stone for this project. As part of our brand promotion activities, we have brought on board cricketing legend and current head coach of the Indian cricket team, Mr. Rahul Dravid, as the dynamic new face of our BPCL brand. Rahul Dravid, fondly known as Mr. Dependable, he's not only a cricket legend, but also a symbol of dedication and honesty. BPCL, as a brand, defines honesty and dependability as its core virtues, qualities that are essential to succeed in cricket, in business, and society in general. Finally, let me brief on the financial performance. We have achieved highest ever profit after tax for half year at INR 19,052 crore. For quarter two, the revenue from operations stood at INR 1,65,995 crore. The profit after tax stood at INR 8,501 crore, mainly due to better crude mix, coupled with higher refining cracks. The negative buffer of LPG as at 31 March 2023, about INR 849 crore had been recovered fully, and the current buffer is positive. We have a CapEx target of around INR 10,000 crore for the full year. We have achieved already 5,191 crore CapEx during first half year. Our gross borrowings as at 30th September stood at INR 42,568 crore, as compared to INR 27,939 crore as at 30th June 2023. Sequentially, quarter-on-quarter, there is a reduction of around INR 5,000 crore of borrowings. Also, we have cash and cash equivalents of INR 5,028 crore and bank balances of around INR 11,000 crore and other investments, including oil bonds, we have around INR 6,179 crore. Our consolidated plus borrowings stood at INR 47,520 crore as at 30th September. The debt equity ratio as at 30th September 2023 is 0.032, as compared to 0.45 as at 30th June 2023, on gross borrowing basis. Our standalone network as at 30th September has increased to INR 70,328 crore, with a book value per share as of 30th September is INR 324. The earnings per share for the half year was INR 89.47. I now invite for questions and for any clarification. Thank you. Thank you very much. We'll 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 handset while asking a question. Ladies and gentlemen, we'll wait for a moment while the question queue assembles. The first question is from the line of Probal Sen from ICICI Securities. Please go ahead. Thank you for the opportunity, and thanks for hosting the call. Just a couple of questions. One was with respect to the GRM performance, and congratulations on this kind of strength being shown. Just wanted to understand if you can just, you know, explain to us where this, you know, outperformance against Asian benchmark is coming from. Specifically, if you look, and frankly, you disclose refinery-wise performance as well, the kind of gap between, you know, Bina Refinery GRMs versus any other refinery in India?... is, is pretty stark. So if we can just get some handle, sir, on where this outperformance is coming from, whether it's coming from favorable group mix or there is some inventory gain also, which you may or may not disclose, but are, are those basically the factors that are driving this? Two parts, I will explain about this refining margins. The quarter gone by July to September, everyone is aware the crack itself has improved, compared to sequential quarter. The diesel cracks have been significantly improved during this second quarter. That is the first thing, actually, all the refining margins have improved. The second, mainly for the Bina Refinery, in terms of refining GRM point of view, our refinery at Bina can take high sulfur grades up to 90% or 95%, and we can process higher for grades. And in product slate also, if you see in the Bina Refinery, we can take a very big swing in terms of MS and HSD. Our HSD production, we can take up to 57% of product slate, we can take it as HSD. When diesel cracks are very high, we can take up to 57%, which also helpful to the of Bina Refinery. The major other influencing factors for the Bina Refinery is our crude mix. When we see the crude mix, the higher crude intake of Russian Urals, we are competitive with the product costing is comparatively lesser as compared to other grades. This also helped with the higher refining margin in Bina. Even Cochin also, if you see the Cochin also, the product slate in terms of diesel, we can take up to 45% of diesel production, and there also we can process more Russian Urals, where the competitive pricing we got from the Russian Urals accordingly. These three, four influential factors, it has improved the refining margins. So perfect, sir. That's very useful. If I can ask a small follow-up, is it possible to give us a sense of, diesel, gasoline and ATF, these three, would be roughly how much of our overall product is as a percentage? Just rough sense would do for Bina, Kochi or overall, whatever you want to share. Okay, roughly you can take Bina 57%, and Kochi we can take up to 45%, and Mumbai also we can take 45. Okay. That's, that's for diesel. I'm saying, sir, diesel, gasoline, and ATF combined. Okay. Is it possible to share that number? We'll share. We'll share. We'll share. Thank you. Thank you. The next question is from the line of Sumit Rohra from Helios. Please go ahead. Yeah, hi, sir. Firstly, many, many congratulations on, you know, on a, on a superlative performance. I mean, you know, I'll just take a few minutes, sir. You have actually paid INR 6,300 crore tax, you know, which today companies are not even reporting on revenue. So, you know, many, many congratulations on a superlative performance. And, you know, it's clearly showing that BPCL as a company, is going to new heights. Now, sir, I have a few things, you know, which I would like to, you know, bring to your attention and, and, and, you know, a few suggestions rather, I would like to talk about. Sir, firstly is that, you know, this government, you know, inflow or whatever was, you know, spoken about, you know, actually, there, there are press reports stating that, you know, the oil companies don't need that. So, you know, a clarification to that level, you know, should be issued with immediate effect that, you know, there is no need for this because we are virtually now a debt-free company, you know? And, management, you know, should also consider, you know, paying out dividend because I believe IOC, our, you know, company, you know, peer company, is also meeting for results and, you know, paying out dividend tomorrow. Sir, I have a suggestion that, you know, we should also focus on buyback of shares, you know, because, sir, you know, I would like to highlight this to you that today, you know, in the public sector, you know, there are 72 or 75 companies, and all the public sector companies in India today have got re-rated except for the oil marketing companies. Okay, now, please hear me very carefully. All the oil-- All the public sector companies in India have gone up by 3x-5x in the last 3 years. Unfortunately, the oil marketing companies in the public sector space are actually down by 50%-60%. There is absolutely no reason for this to happen. It is purely a perception and related issues, you know, which is basically clouding, you know, this sector. In fact, this sector is doing the best. Today, sir, it is absolutely unthinkable that a company of BPCL's caliber is trading at a 3 PE. I repeat, I mean, Bharat Petroleum cannot trade at 3 times price-to-earnings ratio after having an ROE of 25. You know, I mean, BPCL, along with, you know, Indian Oil and along with HPCL, are one of India's best companies, which are a part of the Fortune 500 companies globally. And there is no reason to say that these companies should trade at 3-4 PE, but the perception is a problem, you know, and the perception can be cleared, you know, with the help of you and the other companies and the government of India, you know, and these companies will re-rate significantly. So sir, I really, I really would, you know, request you to please focus on integrated margins rather than focusing on refining separately, marketing separately, because, you know, it is being construed very negatively, you know, by, you know, because people are then, you know, digressing and talking about, oh, refining miss, marketing beat, vice versa. You know, the company is not realizing its true intrinsic value. So my humble suggestion, you know, to the management of, you know, a Fortune 500 company, along with the government, is please focus on integrated margins. Please focus on, you know, creating wealth for shareholders in terms of liberal dividends and buyback. You know, because, you know, we have been a good corporate citizen. We have saved the country when, you know, at times were tough, but we should also focus on the investors. I sincerely wish you all the best. You have done an exemplary job. ... I do not have any more questions to tell you, but only a few suggestions that investors should truly recognize the true value of this company, because today this company is owned by the government. So if this company relates, it benefits the people of India, you know. So I humbly suggest that, you know, please consider a buyback of shares with immediate effect and liberal dividend payouts, and please, sir, focus on integrated margins, because it will do a world of good to you. I wish you all the best. Good luck and God bless you, sir. Thank you, thank you, thank you for all your suggestions. We have noted down. Thank you. Thank you. The next question is from the line of Mayank Maheshwari from Morgan Stanley. Please go ahead. Yeah. Hi, sir. Firstly, thank you for doing the call. A couple of questions from my end. I'll just start with a bit on the capital allocation side. If you can kind of give us a bit of a big picture view around how are you thinking over the next three years in terms of total capital and capital deployment. You talked about the petrochemical complex, you talked about the new energy side. Can you just give us a sense of how we will be deploying the CapEx over the next three years, and what kind of returns are you kind of expecting out of that? Thank you. You may be aware in our earlier con call also, even in the AGM also, we have announced certain various major projects. Our capital outlay for the next 5 years, we have workload around INR 150,000 crore. The major chunk of this capital outlay will go for refinery and petrochemicals, around INR 49,000 crore. Already, we have announced one petrochemical complex at Bina. Around INR 26,000 crore, it will go for exploration and production. Already, there are 2 blocks we have in Brazil, in Mozambique. Already, there are certain commitments. It requires around INR 26,000 crore. Marketing infrastructure and pipelines, we have planned around INR 25,000 crore for the next 5 years. For the CGDs, where we have got to around 25 GAs, where the capital outlay requirement is around INR 26,000 crore. We are planning around a minimum 2 gigawatt of renewables, where the capital outlay we have allocated at INR 4,000 crore. Other, mainly for equity investment, where JV companies and various ROEs we have to take for pipelines, around INR 13,000 crore, we are going to spend. Around INR 1,50,000 crore, already we have announced major projects in the next five years. This is only the projects what we have announced in terms of the net zero ambitions, where we want to reach by 2040, we want to become a net zero. There, we have assessed what is the total carbon emissions as of date. The carbon emissions will be around 10 million metric ton currently, and with the new projects, it will go up to around 16 million metric ton. It requires additional around INR 95,000 crore-INR 100,000 crore of CapEx requirement. That we have not yet planned, the phasing of this additional requirement. Otherwise, this INR 150,000 crore, we have a capital outlay for the next five years. In terms of the returns, generally, BPCL, we don't take any projects if the returns are not reasonable. We always are endeavoring to take good projects with good returns. Yes, sir. Sir, I think, just on the focus on the petrochemical side, obviously, you talked about last time in the conference call of integrating and how it will work with the Bina side. Right. But now we are starting to see when Petronet yesterday basically come out and said that they are trying to do a PDH plant as well. So from a timing perspective, execution perspective, as well as how will you differentiate as BPCL in your petrochemical side? Can you just give us a bit of a subjective view around that? Yeah, in case if you see the petrochemical segment, the product portfolio is wide. When Petronet LNG, they are planning for PDH, in our product portfolio, PDH is not even there. So our product portfolio is polypropylene and HDPE, LDPE, and certain benzene and toluene grades. So I don't think it creates any competition between Petronet LNG and BPCL. See, whatever project we have in BPCL, that is a different product portfolio adopted. Got it. Thank you, sir. Thank you. The next question is from the line of Sabri Hazarika from Emkay Global. Please go ahead. Yeah, good afternoon, sir, and congratulations on good numbers. I have three questions. The first one is on your balance sheet. I think your creditors as well as other current liabilities, both have grown, gone up significantly, which has led to this cash generation. Any specific reason behind that? Anything like in one-offs, or do you think it is sustainable? Generally, creditors, always, when you compare it to March 2023 and September 2023, there is one major element called excise duty. For March 2023, the excise duty we paid before 31st March, whereas for September, we have at least three, four days time to make the payment. The payment will happen in October. That is a real event, and quarterly, we see always there is a gap of around 7%-8% activity liability. That is the one reason, major variation. And the creditors, it all depends on what inventories we have procured. Otherwise, the credit terms are same only. Sometimes, the inventory position is going up. Maybe latest cargoes are available, which are, where the payment is not made, which is not due. Not made means which is not due, it appears in the, in the credit. These two are the major reasons. Nothing major, abnormal. So this is like your net debt has actually become zero with all this. We can interpret on a standalone basis, not exactly zero, but closer to that target. But is there any guidance of whether it will remain at zero, or do you think... I mean, of course, like not accounting for the new projects, but if everything remains same, it will remain at this level. Do you think it, there will be something? Let us hope for the best, because many things we cannot predict how the food prices will move and other things. Okay, sir. No Russian payments are held up, right? That has been, like, made completely. As of today, nothing is there beyond the due date. Okay, sir. Sir, second part of the question is basically on your renewable side. Can you give us some sense on what, how much, what is the kind of, like, profitability per EV charging stations you are making right now, now that you've got a sizable inventory of EV charging stations?... So what kind of profitability is that? Second question is whether the green hydrogen tenders of Bina Refinery has been awarded or it is still under the deliberations? These are the two second questions. Thank you. One is on the EV charging station side, the capital outlay is a very big amount, and comes to the profitability, we are not expecting any good profits immediate basis. But at the same time, we want to create the infrastructure for long-term perspective. So as of date, if you ask that the capacity utilization of EV charging stations are retail outlet, very, very minimal. Very, very minimal. So we cannot estimate what will be the profitability immediately, but the objective of putting investment in this particular infrastructure is for a long-term basis. And second question is? Green hydrogen. Green hydrogen. Green hydrogen, we have refloated the tender for 5 meters of 5 MT per annum. Not yet awarded, the tender is in the process. Bina. Okay, sir. Thank you so much, and all the best. Thank you. The next question is from the line of Kirtan Mehta from BOB Capital Markets. Please go ahead. Thank you, sir, for giving this opportunity. Regarding the Mozambique project, could you give us the current status, and when do you expect? Has the CapEx been finalized by the owners, and how the progress you anticipate on the project? For Mozambique project, there is no change in terms of the force majeure. Still, it is under force majeure only. Something, in terms of the revised project cost, there were discussions at the operating level committee, at a group level, but not finalized what would be the revised project cost and what would be the time range, for remove-lifting of the force majeure. We are hopeful, shortly, maybe next couple of quarters, something can, positively it can happen. We are hoping that. Right. In terms of the INR 18,000 crore rights issue, has the plan for investment firmed up around that? Yeah, that is there already. We have submitted our application to SEBI. Just, we are waiting certain approvals from the ministry and SEBI. According to this, program is on as of now. Sure. And would you be able to give us some more color on the Russian crude usage in terms of the quarterly usage? Are we able to maintain a similar level in Q3 despite the increase in the crude prices? I cannot give exact numbers, we cannot say, but at least in the similar quarters, what potentially we can process the Russian crude, as we are close to our potential crude processing, all three refineries put together. Right, sir. Thanks. Thanks for this clarification. Thank you. The next question is from the line of Ajay from Nuvama Capital. Please go ahead. Yeah. Hi, sir. Congratulations on good set of numbers. Just want to get a sense in terms of, you know, after such a fantastic quarter, how are things shaping up in the current quarter so far in the month of October? Meaning in terms of the cracks, are we seeing similar cracks? And how do you see that progressing on the marketing side as well? At least in terms of the cracks, the gasoline a little bit moderated now compared to the Q2. Gasoline still it is commanding good cracks, still it is as of date, 28-30 levels. But a little bit going forward, the cracks are not showing that much of strength in terms of gasoline. But still, we are hopeful the cracks will be commanding at a higher level only, except for gasoline. We have to wait and see how the particular market movements happens after the winter, how the product demand goes for RLNG, and what is the shift happens from RLNG to diesel, accordingly, the cracks will be decided. But as of date, still, we are commanding good cracks. On the marketing side, sir? Marketing side, we are doing good growth. We are not expecting very, very good growth in terms of diesel. The diesel growth, we are expecting a moderated level, but MS growth will continue. Broadly, in terms of, you know, the profitability, say, suppose things stay where they are right now for rest of the quarter. Broadly, you know, whatever we have delivered in Q2, more or less, you know, there can be a little bit of subdued, but you don't see a major decline as such, right, for the current quarter? We generally don't give any guidance, but otherwise, based on the current crude prices, little bit worry is there, but it will not allow me. I'm saying we are not expecting some major decline, decline as such, right? We cannot, we cannot give any guidance, please. Okay. Thank you very much. Thank you. The next question is from the line of S Ramesh from Nirmal Bang Equities. Please go ahead. Thank you, and good evening. If you look at the marketing inventory gains, how do you explain the reversal from the loss in first quarter to the marketing inventory gain of INR 1,497 crore, since there is no change in the retail price? Just wondering how you have been able to book that inventory gain. No, generally, it is not any accounting gains. If you see, on an average, when we maintain average INR 40,000 crore of inventory, on every 15 days, it's the particular marketing RTP changes based on the crude pattern. Just want to highlight and calculate and inform to the shareholders how much in the entire profitability, what is the impact of the price increasing or decreasing, impact on the profitability. There is no separate gains we recognize at the end of the period end. This is during a particular period, on account of my crude price movement and product price movement, what is the changeover of my inventory, opening inventory impact on my sales and the profitability? That is what we work out, and we give you an additional information. How much, on account of this inventory movement, inventory price movement, it has helped in the profitability? Okay. So, if you look at your CTD business, you made very impressive progress. So is it possible to give us some kind of timeline? as to when we can see the commercial results in your standalone P&L, and what is the kind of EBITDA per unit of gas, and what is the kind of volume you expect to sell in your 4, 2, 24 GAs, which have gone commercial operation, say, for the next two to three years, if possible? At this point of time, we will not be in a position to give any estimation on the volume sales of CGD. What we can say is that in terms of creating the infrastructure, in terms of reaching the MWP, we have worked out in full swing, and we are achieving all the MWP targets except the PNG connection. But definitely, if you see our presence in CNG, the number of ROs are going up. Slowly, slowly, the volumes will pick up. At this point of time, very difficult to say what will be the volume sales, because you have to wait and see how much of vehicle conversion happens in those markets. We need some more time to assess exactly in next couple of years, what will be the volume picture. If I might squeeze in one last thought on CGD. Once you have the entire 25 GAs in place, what is the final target for the number of CNG stations in the 25 GAs? I have the ready number for the current year. We will share. Full CGD solution. Yeah, if you can. Thank you very much, sir. Thank you. Have a good one. Thank you. The next question is from the line of Chinmay from Canara HSBC Life Insurance. Please go ahead. Yeah, thank you for taking my question. So my question is, on the working capital side, you did explain the maturities of excise duty, when you mentioned basically the payment happens in October versus not in September. So what will be the quantum of this payment related to the excise duty? Generally, every month we pay around INR 7,000 crore, around, around INR 7,000, 7.2, 7.3, around. Depends on the refined throughput on that particular month. Around INR 7,000 crore. Okay. So basically, once that payment has been made, so your cash would have gone down by around that quantum, like around INR 7,000 crore? Right. Right. Right. Yeah. So, if I also look at the balance sheet, so basically, there is a stock movement in two of the current liability side, and one will partially be attributable to the INR 7,000 crore which you mentioned. That is maybe sitting in the other current liabilities. But, even other tax liabilities net is around INR 4,600 crore and INR 4,400 crore, which was almost zero as of March 2023. So can you help us understand this? The tax liabilities, these are all different liability you are referring, I think. Yeah, but it was zero as of 31st March 2023. That is direct tax, that is income tax. Income tax, March 2023, since our profitability is very low, our advance tax, what we have paid is sufficient to meet the liability. Whereas for this particular during this year, the six-month profit, profit, but our advance tax payment is on a lower side. Okay, fair enough. Yes, that is from my side. Thank you. The next question is from the line of Maulik Patel from Equirus Securities. Please go ahead. Thanks for the opportunity. Sir, on the refining side, is that till the time we process this, I mean, whatever the Russian oil which we are processing it, currently we are running at full optimized level, we cannot process more than that, what we are currently doing it? At least we are, we are pushing up to the potential level. What we can process Russian crude, we are taking. That could be almost 30%-40% of our total intake? Roughly all three refineries put together, that range, that range. That range. That range has been there for the entire Q2, right? I think it was lower in Q1. I'm not clear, please. So that, so we were running, we were utilizing the Russian crude at a full potential in the Q2 quarter. Yeah. Was the similar number there was for the Q1 also? Yeah, yeah, same, same, same number. Same, there is no major change. There is no significant changes, maybe 2, 3% here and there. Otherwise, we maintain the same. Good. Great. Thank you. Thank you. The next question is from the line of Prabal Sen from ICICI Securities. Please go ahead. Yeah, thank you for the opportunity again, sir. It's just a follow-up question in terms of the capital deployment plans that you mentioned. You know, in terms of the Mozambique and Brazil plans, obviously, as you mentioned, those will entirely depend on whether the force majeure is essentially lifted. And if we assume that in the next month or within this financial year, the force majeure is lifted and work actually begins, then what kind of timelines can we look at for the completion of at least the first two trains at Mozambique, assuming that the force majeure is lifted by the end of this financial year? Any sense you can give us? I already got the financial year. So Mozambique, as per the original plan which was done, the construction, the first LNG cargo, was to come out in around 42 months. So, 42 months from the FID date? Is that a correct way to look at it? So yes, that's right. So therefore, what's happening is, now of course, we will have to reassess. Some of the pre, pre-construction work was carried out before the force majeure was announced. So once the force majeure is lifted, around that time, the operator and the, consortium will reassess their plans and, would actually, reassess the time for the first cargo. But this is the timeline which I'm indicating is at the time of taking of the FID. So around a similar time is what we can expect. Got it. Sir, you said, one more thing is that given that the disruptions that have happened and the delays that have happened, we read some reports that some of the subcontractors have been asking for a significant increase in the associated costs, and therefore, do you expect any major escalation in the overall project cost versus what, you know, the consortium had estimated maybe two years ago? Is that a fair way to look at it? So as of now, the contracts with the EPC, EPCI contractors are preserved insofar as the contractual commitment is concerned. But yes, there is a possibility, strong possibility of reviewing the pricing or the commercial terms, and therefore, a price review would definitely be forming part of the entire review. It would also be encompassing in what phase and in what manner do we want to carry it forward. So it will be a holistic review, which will happen at the time of uplifting of the force majeure. Obviously, the commercials also would be a consideration in that regard. Understood, sir. One last bit from me. Out of the INR 260 billion, therefore, how much is basically the E&P, pure E&P, CapEx for Brazil, and how much is for the contribution to the Mozambique project in signature? Brazil requirement is small only, comparatively, but based on the original FID approval, Mozambique, the project cost is around INR 14.5 billion. Our shareholding, INR 1.45 billion. INR 2 billion. INR 2 billion. Around $2 billion would be Mozambique, and $1 billion would be Brazil. At a very, at a broad level, actually. All right. Thank you so much for giving me the opportunity. Appreciate it. Thanks. Thank you. The next question is from the line of Vipul Kumar Shah from Sumangal Investment. Please go ahead. Hi, sir. Can you give the inventory gains in the marketing segment? Because I have not received your handouts. For the marketing inventory gains is INR 1,497 crore, whereas compared to same quarter previous year, it is minus INR 384, and for the full six months, it is INR 427 crore for this year, whereas previous year it is INR 755 for half year. Okay, sir. Thank you. Thank you. Next question is on the line of Amit from Axis Capital. Please go ahead. Yeah. Hi, good afternoon. Just, on CapEx, like, you mentioned that the five-year plan is about INR 150,000 crore, but I believe FY 2024 CapEx is just about INR 10,000 crore. So when can we expect the CapEx to actually scale up to higher numbers to kind of achieve that five-year plan? You see, out of INR 150,000 crore, the major project is Bina petrochemical complex. Definitely, year one, the CapEx output is very small only, maybe around INR 600-INR 700 crore for Bina. But the peak CapEx will happen from year three onwards, maybe from 2024, 2025. 2025, 2026 onwards, significant CapEx, you are going to see. Yes, okay. Like, if, if, let's say, next two or three years is only INR 10,000-15,000 crore, does it mean that, like, it will be like a INR 40,000-50,000 crore CapEx in year four, year five? Maybe from year three onwards, actually, the CapEx jump will happen. Maybe year three, maybe rough numbers, somewhere around INR 20,000 crore plus, after that, 30, and peak year will be five, year five. Okay, sure. All of these are like board-approved projects, just to kind of clarify? Major projects, board is approved. Certain renewables related projects, we are just working on it. So some of the projects yet to be approved with the board. But overall CapEx, say, estimations are INR 150,000 crore, out of which refinery, petrochemicals, Bina is approved, and BPRL already board has approved, and CGD, around INR 26,000 crore board has approved. Around INR 110,000 crore already board has approved the projects. Okay. Okay, thanks for that detail. And also, like, one small data question, like, how much would the PDPP project be contributing to Kochi Refinery now that given the discount, all gets fully stabilized and all? Like PDPP, in terms of physicals, it is operating at 73%, good improvement in terms of plant reliability issue. In terms of the profitability, it has added around $0.55 per barrel in terms of the GRM, but still it is not sufficient to meet the operating expenditure of the PDPP. So we need some more improvement in terms of profitability of PDPP. But otherwise, at this point of time, in terms of physical performance, it has reached a certain milestone. But profitability, you know, this quarter, even in the last quarter also, due to the price, margins are very low in terms of petrochemicals. So this quarter also, PDPP, whatever GRM we have generated is not sufficient to meet the expenses. Okay, got it. Got it. Thanks. That's all from my side. Thank you. The next question is from the line of Vishnu Kumar from Avendus Spark. Please go ahead. Good evening, and thanks for your time. So just wanted to understand the OpEx cost per barrel across the three refineries? This could help us understand. Generally, OpEx, it ranges from $1.8-$2.1. On an average, you can take all three refineries put together, closer to $2 this quarter. ... So specifically for Bina, there is a pipeline-related income and expenses, right? So it should be, if considering that it will be higher, if you could help understand that. No, yeah, even for Bina pipeline related, nothing is there because Bina pipeline, we have added to our pipeline group, not with the refinery. If you see, Bina Refinery, the operating expenditure for July to September is $4, mainly because the throughput is low this quarter. Because due to shutdown of almost 40 days shutdown, the operating expenses are on higher side. Otherwise, if you see the six-month average for Bina, April to September—April to June, it is $1.84. July to September, it is $4. Generally, it will be in the range of $2 only. But only during this quarter, the refinery was shut down, the throughput is not there, and the operating expenditure is $4. So this, the pipeline-related income and expenditure, it will go to the marketing side, is it? It's not part of the GRM. Pipeline division. It's part of pipeline division. Okay. After the merger, after the Bina merger, it's part of pipeline division. It is pipeline division. Anyways, so in our EBITDA, when we report, since you have some GRM balance, it's between pipeline and marketing. Yeah, sure. Definitely. Understood, sir. And this INR 22,000 crore debt number, if you could, sir, help us understand where this number in terms of different entities, where exactly these numbers are sitting, that will be a little helpful. So INR 22,000 crore is in standalone only. When we talk about group borrowings at consolidated, it is INR 48,000 crore. The major borrowing of around INR 24,000 crore is for BPRL, one of our subsidiary. There the entire investments are in exploration blocks, mainly for Mozambique and Brazil. So the total borrowings at BPRL level is around twenty- BPRL is 25,000. INR 25,000 crore. Standalone is INR 22,000 crore, BPRL is INR 25,000 crore. These two are the major borrowings. Of the other 8,000, which is Ind AS adjustment, is also sitting only in the standalone? Yeah, yeah. That is only ROU liability. It's only our ROU liability. Sir, next couple of years is our... Do you think the CapEx and—I mean, I know EBITDA is a volatile number, but at least your estimates, you're going to match your cash flows and the CapEx, or how should we look at it? Well, cash flow will not match with the CapEx number, definitely, but we have to, we have to take certain leverage. But reasonable leverage, we definitely we have to take, more borrowings when the CapEx is peaking at year three, year four. There we have a certain chance of taking borrowings, but at least based on our understanding of cash flow, and maintaining reasonable debt equity leverage, we can, we can complete these projects. But when you, when you mean year three, year four, we are at FY 2024, so 2026 or 2027, 2028, you are expecting higher CapEx? Peak CapEx, yeah. When the peak CapEx happens, our cash flows, generally the incremental cash flows only comes after the commissioning of the project. But during that interim period, definitely our cash flow will be at a normal level, whereas our CapEx numbers are very high level. Sir, if you could help us understand what will be the normalized number and peak number of rough cash flow payout over the next couple of years, what would be that number? We cannot give any guidance on the normal numbers, because everything depends on your crude prices, margin, cracks. Many, many, many, many things are influencing on these numbers. So we don't provide any guidance. Got it, sir. Thank you and all the best. Thank you. The next question is from the line of Nitin Tiwari from Phillip Capital. Please go ahead. Hi, there. Good evening. Thanks for the opportunity. Sir, my question is related to the green hydrogen project that you mentioned, that you'll be putting up 5 MMT of the capacity. So is that capacity for internal consumption, or there would also be a commercial distribution of this hydrogen? Related to that, what's our current hydrogen consumption? There are two projects we are taking up for hydrogen. One is at Bina Refinery, 5 megawatt. That is purely for our internal consumption. One more plant we want to have at Kochi, Kochi International Airport. That is for public purpose, where we can refuel the buses, certain buses. That is a very small plant, where refueling can happen. The Kochi plant is a very small plant. You're saying the 5 MMTPA plant you mentioned, the green hydrogen plant is for internal consumption. Internal consumption, right. Right. What are the hydrogen consumption across three refineries right now? We share separately. We share separately. Sure, sir. And sir, a second, a clarification question. You mentioned that your current carbon emission is about 10 million tons, right? Which will go up to 16 million ton with the new projects. So, the investment that you mentioned to mitigate this was INR 100,000 crore. Is that the right number that I- That is just ballpark number. We have to yet to finalize the projects and we have to assess the project cost. Otherwise, roughly this is the range we have to- Sir, the CapEx that we have planned, the INR 150,000 crore CapEx, does that not build in at least for the new projects a forward commitment sort of carbon mitigation costs as well? Because these are the new projects you'll be putting ahead, I mean, and coming up in future, so might as well build in the carbon mitigation costs as well, and then assess the projects. We have factored around INR 12,000 crore for the carbon mitigation renewable projects in the INR 150,000 crore. But all other projects, we said our target is by 2040, we want to make it Net Zero. So still we have time so that we can allocate certain funds, subsequently after 3, 4 years, not now. Right. And lastly, sir, like, you know, in terms of refining capacity, are we going to look at any expansion of refining capacity, going ahead from here, or like we'll be operating at these levels? Because, I'm talking, and I'm asking this question in the perspective of, like, you know, the carbon mitigation and the green measures that are often being spoken about. So do you foresee that, let you know, that?... This refining capacity would be sufficient to meet our requirement for petroleum products, or do you foresee a need for expansion of our refining capacity as we go more? One of our projects already, being a petrochemical complex, includes a little bit increase, increase in our refining capacity. There, our refining capacity, we are taking from 7.8 MMT to almost 11.2 or 11.3. There, a little bit refining additional capacity will come from Bina. In other refining, so far there, we are not planning any expansion at this point of time. We are working towards because we see- we have a little bit deficit in terms of marketing requirement and refinery throughput at this point of time. We are working on it, how do we bridge this gap between our refining capacity and market requirements? We have not yet finalized anything. Sure, sir. Thanks. That's all from me. Thank you. The next question is on the line of Saket Kapoor from Kapoor and Co. Please go ahead. Yeah, namaskar, sir, and thank you for the opportunity. Am I audible, sir? Yeah, yeah, you are audible. Yeah. Yeah. So firstly, regarding the advanced tax part, I missed your comment, sir. We had made a higher tax payment in the cash flow. So what should we take into account? What were you referring to? If you could repeat, sir. We made a- I'm saying, on the balance sheet, the balance sheet of the current tax liability is March 2023 to 0, whereas September 2023, we are showing as INR 4,300 crore. Just I'm explaining why this is different. In March 2023, if you see 2022-2023, the profitability, if you see, the profits are very low. So there, the tax liability, almost we have settled with the advanced tax payout. Whereas current year, the advanced tax payment is lesser than our tax obligations as of this September. That is the reason it has created a current tax liability in the balance sheet. Okay. So, when we take this INR 1,848 crore under the cash flow as direct tax paid, this amount is pertaining to our income, money, income pertaining to for this year only, or does it contain any prior period item also? 2022, 2023. 2022-2023 year, whatever tax liability, those tax liabilities we have settled against advance tax almost. That is the reason there is no current tax liability. So, this amount is 45% of what the liability has to be? As on 15th September, we need to clear 45% of the liability. Tax liability, whereas you have not paid full advance tax liability. We have to wait and see full year, then accordingly, we settle the full tax liability. Okay, sir. For the CapEx part, sir, we are also setting up, I think, oxo alcohol plant. What is the update on the same, sir, and how much CapEx is being involved from the same? There is no such oxo alcohol new plant. Already in the PDPP complex, there is a plant. We have two segments. One is alkylates and oxo alcohol. Both the plants are there. We don't have any plan of putting up a new plant for oxo alcohol separately. Okay. So, you know, currently we are selling, I think, the PP raw material to some of the oxo alcohol players. So are you directly competing? Are we competing against now with the end product also? Will be from our side? No, I, we have a plant, but the feed available is much more than the plant requirement. That is the reason we are selling into the market, the PP. So we are not planning any new plants for oxo alcohols. Okay, sir. And lastly, sir, as the other investing people have also mentioned about the distribution of the profits to the investing community. So taking into account what the first half we have reported numbers, is it in the likelihood that we will adhere to the DIPAM policy of distributing cash to your investors, either in the form of a buyback or dividend payout? Or is the rights issue coming up counterproductive to that view? I mean, how should one read into these profitabilities and your rights issue and the DIPAM policy? How should we align all these factors, sir? I, I can brief about the BPCL. Even if you see in the last couple of years, we have always distributed dividend as a percentage of profit with good, reasonable numbers. Our endeavor always to comply with our DIPAM guidelines and as well as our own internal dividend distribution policy. It's only a timing, what time we distribute the dividend. Generally, we give a good amount as interim, and the balance amount is final. As, as a practice, we give good amount, reasonable amounts of dividend and distribution. Sir, but for tax incident purpose, if we are coming up with dividend payout and then coming up with rights issue, how do these two things gelled up, sir? If you declare dividend on the tax different point, we as investors will pay tax on the same, and then you come up with the rights issue, we participate again with the amount. So why incurring it in a, why not a tax neutral exercise being done? If you have proposed a rights issue, how do different payout work, sir? That is my point was. We have taken your suggestion. Accordingly, appropriate time will come up. Fine. Thank you for this opportunity, sir, and all the best to the team. We hope for the continuity of these calls, sir. These are very helpful for investing community. Thank you. Thank you. The next question is on the line of Varatharajan Sivasankaran from Antique Stock Broking Limited. Please go ahead. Yes, I just have a question on this LPG surplus we are carrying in the suspension account. Is there any discussion around that? Is there a possibility that, like, you know, this can be set off against the underrecovery on petrol and diesel, which we had in 2023? Oh, no, no such discussion. No such discussion. The practice is continuing, what is being done in earlier years. Okay. Thank you. The next question is from the line of Mayank Maheshwari from Morgan Stanley. Please go ahead. ... Thank you. So just a follow-up question here. I just want to check when you were talking about the carbon investments. When you are putting up these new investments of almost INR 150,000 crore or so, what are you taking into account in terms of your return calculations on your carbon tax in your numbers? Is there a rough range that you can kind of help us with? We are not taking any, carbon tax numbers in the returns calculation. Only what we have worked out is that what is the current carbon emissions, what is our obligations in terms of, reducing carbon emissions and in terms of what is the capital outlay required. The capital outlay requirement is much beyond this INR 150,000 crore. This INR 150,000 crore only for the announced projects. For carbon emissions of around 15 or 16 MMT carbon emissions, we need additional capital outlay of maybe INR 95,000-INR 100,000 crore. So we are not factoring any carbon tax in our existing projects. Got it. Clear. Thank you. Thank you. The next question is from the line of Amit Rustagi from UBS. Please go ahead. Sir, good afternoon, and thanks for giving me the opportunity. Sir, as per some, you know, market commentaries, GAIL was considering to merge some of their city gas assets with IGL, where BPCL is also one of the shareholders and a joint venture partner. So do you think that this kind of moves are possible? And are you also considering to merge some of your city gas distribution companies with the larger players to monetize them? We are not forcing any such need at this point of time. So there, there is no proposals similar, similar to this kind of, you know, IGL or No, no. Okay, sir. Got it. And, sir, second question relates to the current, you know, spreads with respect to the crude. So which are the most opportunistic crudes we see as of now? Because in the last one year, there is significant change in the discounts on the crude, which are available to the Indian refineries. So which crude, as per you, is the most profitable as of now, right now? You see, today we are almost processing around 108 grades of crude. It all depends on what pricing they offer when we go to the market and purchase. So every crude is important, every crude will value. Only thing, at a particular point of month, in case which crude gives more commercial offers, then accordingly we take the decision on the process. Otherwise, our refineries can take almost 108 grades of crude. So every month we go to the market for any spot requirements. We assess which grades or which suppliers can give more commercial offers, then accordingly we decide. Okay, but do you will agree that the discounts have come down from the previous levels? It depends. Market, market, sometimes it gives more discounts, sometimes it gives lesser discounts, but directionally, yes, what you are observing is right. Okay, great, sir. Sir, thanks for this, and wish you all the best and a happy Diwali to you and your family. Thank you. Thank you. Thank you. Ladies and gentlemen, as there are no further questions, on behalf of Antique Stock Broking, that concludes this conference. Thank you for joining us, and you may now disconnect your lines.