Ladies and gentlemen, good day, and welcome to Q3 FY 2024 Earnings Conference Call of Bharat Petroleum Corporation Limited, hosted by IIFL Securities 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. Harsh Dole from IIFL Securities. Thank you, and over to you. Thanks, moderator. Greetings, everyone. I'm Harsh Dole. On behalf of IIFL Securities, I welcome you all for the third quarter FY 2024 Earnings Call of BPCL. To discuss the earnings in detail and share performance outlook, we have the entire Senior Management team of BPCL. Significantly, it's my pleasure to welcome and introduce Mr. G. Krishnakumar, CMD, BPCL, who will address the investors for the first time during the earnings call. We also have Mr. V.R.K. Gupta, Director of Finance, Mr. Pankaj Kumar, ED Corporate Finance, Ms. Srividya V, ED Corporate Treasury, Ms. Chanda Negi, DGM Pricing and Insurance, and Rahul Agrawal, Senior Manager, Pricing and Insurance. Subsequent to the management remarks and presentation, we'll have a Q&A. Without further delay, I'd like to hand over the proceedings to Ms. Chanda Negi. Over to you, madam. Thank you, Mr. Harsh. Good afternoon, everyone. On behalf of the BPCL team, I welcome you all to this post Q3 results 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. On our request, our Chairman and Managing Director, Mr. G. Krishnakumar, who is leading the BPCL team for this call, to make his opening remarks. Thank you, and over to you, sir. Thank you, Chanda. Good afternoon, everyone. Thank you for joining us on this call today. If you recall, at our annual general meeting in August 2023, we had introduced our strategic intent, Project Aspire, which was essentially anchored on two cornerstones: nurturing the core, that is, essentially refining upstream marketing of petroleum products and investing in future big bets, largely petrochemicals, gas, consumer retailing, green energy, and the digital ventures. Since that pivotal moment, we have been actively working towards implementing this strategy within the defined timelines. With our existing diverse portfolio of products and services and our strategic aspirations, the company, we feel, is well positioned to play a critical role in the energy landscape of India and to increase its global footprint. The strategy aligns with the company's plan to achieve Net Zero emissions by 2040, both Scope 1 and Scope 2. The aspirations, with a planned CapEx outlay of around INR 1.5 lakh crore -INR 1.7 lakh crore in the next five years, will enable us to create long-term value for our shareholders while preserving our planet for future generations. Of this INR 1.5 lakh crore-INR 1.7 lakh crore, INR 75,000 crore we have earmarked for refineries and petchem ventures, about INR 32,000 crore in the upstream business, INR 25,000 crore each in gas as well as in marketing infrastructures. INR 10,000 crore is the initial outlay, which we have laid out for renewables and alternate fuels. A portion of this capital outlay will remain flexible and shall be deployed based on economic viability and performance of each project. At the heart of our ambitious goals are our people, cutting-edge technology, strategic partnerships, and robust R&D. These, we believe, are the foundations on which our aspirations are going to be built. Before we get to our performance this quarter and the near-term outlook, let me give you an overview of the operating environment. Amidst the fiscal challenges faced by major economies, India continued to be an oasis of growth and stability. The country grew by 7.6% in Q2 of 2023-2024, and as per Standard and Poor's Global report, India is set to become the third largest economy by 2030. Today's press reports say we will be a $7 trillion economy by 2030. India's ambitious goals of attaining net zero emissions by 2070 is set to accelerate the adoption of cleaner and more efficient solutions. This is opening up significant economic opportunities for the companies in the energy sector. Concurrently, as the Indian economy experiences rapid expansions, the surge in energy demand becomes inevitable, prompting a continued resilience, reliance on fossil fuels at least for a couple of decades. So the game will be on how well or how responsibly we will be using fossil fuels, while at the same time balancing the newer green energy. The crude oil prices have remained well below $90 in the last three months, notwithstanding announcements of crude oil supply cuts by major suppliers. This resilience is attributed to lackluster growth in major world economies, influencing downward revisions in global oil demand projections. However, the ongoing Russian-Ukraine war, conflict in the Middle East, tensions in the Red Sea, all point to negative impacts on the global supply chains. These continued uncertainties are anticipated to contribute to the volatility of crude oil prices throughout the year. While these are broader factors that may drive volatility, we remain focused on things we can control. That is, operating efficiently in a safe and reliable and environmentally responsible manner, maintaining capital discipline by adhering to minimum return threshold on growth projects, and are honoring our commitments to create long-term value for our shareholders. Let me be now specifically move on to the performance this quarter. Our refineries continued their stellar performance on both physical and financial parameters during this quarter. Although we had a planned shutdown of our Mumbai refinery in the month of October, November, despite all the odds, we achieved a combined throughput of 9.86 million metric tons this quarter, which is more than 100% of the nameplate capacity. Distillate yield was at 84.21%, one of the highest amongst Indian refineries. This quarter evidenced a sharp fall in international product cracks as compared to previous quarter. Despite this, the refineries recorded robust GRM of $13.35 per barrel. The GRM for the nine months works out to $14.72 per barrel. Our current GRMs have been at a premium to Singapore GRMs, mainly on account of continuous optimization of refinery production, product distribution, and crude procurement, use of advanced processing capabilities of Bina and Kochi refineries, allowing for efficient handling of up to 100% sulfur-high sulfur crude and 50% Russian crude. During the quarter, the three refineries together processed nearly 83% high sulfur crude. Russian crude accounted for almost 40% of our crude imports during the quarter. Our flexible crude sourcing mechanism, which we have strategically secured 50%-55% of our requirements through long-term agreements. The remaining is on spot basis from diverse sources, allowing us to enhance flexibility and capitalize on price economies. On the marketing side, our domestic market sales during the year, during the period April to December 2023, grew at 5.1% to about 37.86 million metric tons during this period. Our market share in petrol and diesel segments, among the retail segments, among OMCs, has increased over time. In this period, April to December 2023, our market share was 29.62 for petrol and 29.71 for diesel. In line with the stated objectives of reducing environmental pollution, we have now achieved 11.53% ethanol blending during the same period. We have about 1,800 ROs, where 20% ethanol fuel is dispensed. To further augmenting our strong marketing networks, we have an approved pipeline project from Mumbai Refinery to Rasayani, which will help evacuate products from Mumbai Refinery to southern across the country. This is, even we have got the clearance from the High Court recently for the project. Two more pipelines, Irugur-Devangonthi pipeline, passing through Tamil Nadu, Karnataka, and Krishnapatnam- Hyderabad pipeline, passing through Andhra Pradesh, Telangana, are under construction. These pipelines will optimize our product placement costs in the southern part of the country. We are pleased to announce that we are putting up three new depots, depots in the northeast part of the country, for which we have just recently acquired land. We have come with an advertisements on new retail outlets, and also we've got excellent response with that. In the EV space, BPCL have entered into MoU with Tata Motors subsidiary for setting up charging stations, and also with Trinity Cleantech for setting up EV charging ecosystem for the three-wheeler autos. In a positive development for BPCL, India has imposed restriction on import of Butyl Acrylate only to those cargoes that meet Bureau of Indian Standards norms. This requirement at India, in India, has prevented the import of non-BI certified cargoes, which were more competitively priced. As BPCL is the only Indian company manufacturing BI-certified product, this is expected to positively impact BPCL. Let me now touch upon a couple of major projects which are currently underway. We have conveyed that in addition to the INR 49,000 crore ethylene cracker and refinery expansion project at Bina, we were evaluating other petchem projects, including polypropylene in Kochi in August 2023. The decision on which has now been taken, the board has subsequently approved 400 KPP polypropylene project, unit project at Kochi Refinery at a total cost of INR 5,044 crore. This project will benefit from the propylene feedstock available in the refinery. We believe that there is strong demand to meet our petchem supplies from Bina and Kochi. With regard to Mozambique, the project suffered a setback due to security issues resulting in force majeure. However, the security situation has substantially improved, and we are well-positioned for restart in the near term. One important point to be noted is that despite the three-year force majeure period, all major contracts of Mozambique, including EPC, EPCL, LNG sales, project finance, are preserved. As briefed earlier, our growth aspirations under Project Aspire will involve a total capital outlay about INR 1.5 lakh crore. Let me share some perspective around this capital outlay. These investments, some of which are long gestation, are critical for diversification and de-risking your company in this transformative era. Successfully navigating transition demands a commitment to long-term solutions. As mentioned in the previous call, we are investing with discipline on growth projects by adhering to a minimum return threshold. We are enhancing our capabilities in executing and delivering petchem projects by strategically engaging experts and recruiting fresh and lateral talent to build up competencies required for the future. This capital outlay, whether it will put a strain on the balance sheet, was a question which we pondered. On a standalone basis, we are at a fairly low levels of net debt and significantly deleveraged. Our borrowings, net of cash, bank, and liquid investments at standalone level is about INR 6,025 crore. At a consolidated level, our debt equity is about 0.6x. We anticipate that in the next five years, our peak level debt equity on a consolidated basis will be about 1x, considering that the current margins level continues. As we embark on this growth journey, our disciplined dividend framework, payment framework remains unchanged. During the quarter gone by, we have given an interim dividend of INR 21 per share. That is 210% for the financial year 2023-2024. Let me also brief you on the proposed rights issue. Pursuant to Union Budget announcement 2023-2024, regarding capital infusion and OMCs towards energy transition, net zero objective, energy security, and the corresponding intent of Government of India, the Board has granted approval for rights issue of capital. Though there are certain formal requirements which we are awaiting to be done from MoPNG, we are working on the offer document for the proposed issue. I'm happy to share that we have recorded our highest ever nine-month profit of INR 22,449.32 crore, as compared to a loss of INR 4,607 crore in the corresponding nine months. For Q3, the revenue from operations stood at INR 129,976 crore. The profit after tax stood at INR 3,397 crore. As on 31 December 2023, we continue to have a positive buffer in LPG. Against the capital target of INR 10,000 crore for the year, we have spent about INR 8,017 crore till December 2023. Our standalone net worth as on 31 December 2023 is INR 69,477 crore, with a book value per share of INR 326.27. The earnings per share for the first nine months is a stupendous INR 105.42. Wrapping up, I can say that we continue to deliver resilient operational and financial performance, and see good momentum through the balance part of the year. We are actively working towards implementing our strategy Project Aspire within the set timelines, and are fairly comfortable with the peak leverage level. The key to this will be consistent execution and set timelines. Importantly, we are investing with discipline of adhering to a minimum return threshold. I think I have concluded. Thank you very much. We are open for questions. 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 the touch-tone telephone. If you wish to remove yourself from the question queue, you may press star and two. Participants are requested to use handsets while asking a question. Ladies and gentlemen, we will wait for a moment while the question queue assembles. We have our first question from the line of Probal Sen from ICICI Securities. Please go ahead. Thank you for the opportunity. Congratulations on your numbers. Just on, firstly, on the Bina Refinery and expansion, the big project that we are doing, is it possible to get a little bit more granularity on what kind of refinery configuration will we look at post the expansion? And what kind of products, if it came out of it, will actually, a ny sense you can give us will be helpful. Thanks. On the refinery side, we will be moving from 7.8 million metric tons to 11 million metric tons. Okay. As far as product portfolio is, we at least will produce HDPE, LLDPE, polypropylene, and then benzene, toluene, and a little bit of bitumen. Sorry, HDPE, LLDPE, Polypropylene, Benzene, Toluene, and a little bit of, what, sir? Bitumen. Bitumen. Bitumen. So just on the refining part, from 7.8 MMTPA to 11 MMTPA, will that also be accompanied by any upgradation in the product, in the sense that are we looking to upgrade our distillate yield as well, along with the refinery expansion? Sorry, come again? Will the distillate yield, will the distillate yield of Kochi also expand, sir, post the expansion to 11 MMTPA? 0.8 MT, about that will be product expansion too. How much, sir? 0.8 MT. 0.8 MT? Yes. Oh, okay. Okay. And, just, your thoughts on, you know, any, you know, how the margins outlook is shaping up, both on the GRM front and on the, you know, marketing front. You mentioned thankfully that the Russian crude was at roughly about 40%. Our, our understanding is that that proportion, at least from a country level, seems to have gone down. So any indications you can give on FY 2025, what we should be sort of penciling in in terms of Russian crude? Because the discounts seems to have narrowed from what my understanding is, sir. It's actually your guess is as good as mine. But we believe it's going to be stable till, unless the Red Sea situation worsens a bit. Right now, we feel there is not going to be much of a downside. Sir, the Russian crude requirement, does it come under the 50%-55% already secured that you mentioned? Or this is part of the spot and, you know, adventitious. Partly, part of the spot. We don't have a long-term arrangement with Russia right now. Understood. Thank you very much for your time. I'll come back with one more question. All the best. Thank you. We have our next question from the line of Vivekananda Subbaraman from Ambit. Please go ahead. Thank you so much for the opportunity. I have two questions. The first one is on the Red Sea disruptions. One of your fellow PSUs, the OMC, they said that they have not been impacted by the dislocation, and they have already tied up till the first two weeks of April. What about you, sir? And secondly, on the Russian crude itself, I believe most of it is coming from the Red Sea. Are the shipments coming, and how is that impacting the, I mean, we are also reading reports on the shipping rates being much higher because of the disruptions. So how is this impacting your strategy on crude sourcing? That's question one. The second one is on the experience that you had in the highway corridors on the EV side. What's the charging monetization model till now? Can this be a meaningful monetization source, given that the EV adoption continues and more and more models are coming up? Thank you. Okay. So in response to your first question, right now, we are not impacted by the Red Sea issue. We are waiting and watching. It's right until about April, we too are covered. We don't have any worries, but these things can play out, so we'll be on the watch for that. So right now, there's no issue on the Red Sea issue. As regards to the EV, on the highway corridors, it's a chicken and egg story, so unless there is a proliferation of EV chargers, the traffic won't pick up, the consumers won't. So unless they get a confidence, so we believe there is a strong case for EV charging going forward, and we are going ahead and covering up corridors, so that the range anxiety is limited and people are encouraged to adapt to EV, vehicles. Hello? Thank you, sir, for your answer. Just one follow-up. So, you mentioned that there's no impact on your sourcing, but what about the shipping costs and the implications as far as the discounts are concerned in sourcing crude from Russia? Is this really resulting in narrowing discounts? Because we are reading media reports that shipping rates have surged. You are right. We are also reading the same reports, but right now, the Russian cargoes are on delivered basis, so we don't have anything to worry right away. Discounts are more. Discounts are more, more or less on a very stable, moderate number. Okay, sir. Thank you so much. All the best. Thank you. Thank you. We have our next question from the line of Puneet Gulati from HSBC. Please go ahead. Yeah, thank you so much for the opportunity. My first question is, if you can talk about how much of Russian crude you used in the previous quarter, and what is the run rate in the current quarter? Current usage is about 40%, and in the previous quarter also, it was around 40%-44%. Okay. So, so no major change. And, and you said the pricing also is not too different? Not too different, yes. Okay. Secondly, you commented on the EV charging tie-up with Tata Motors. Is it Tata Motors or is it Tata Power? No, no, it's a subsidiary of Tata Motors which we have tied up. Okay. And thirdly, if you can comment on the, you know, your projections on how you are doing growth of petrol and diesel in India. December saw a bit of weakness. Last few years also has been a little slow. How are you looking at the demand here? See, we believe strongly India is going through a double transition. One, there is a transition of, the economy, and one, the transition of the environment for cleaner fuels. With this, India, 50% of India still needs development, the energy needs are going to surge. So, we strongly believe for another 10-15 years, the fossil fuels will remain. While we'll be responsible, in reducing the emissions, we'll also be simultaneously developing the green energy business. Probably by 2017, we will reach our transition stage. One thing to note is the renewable energies are at very early stages of the technology. There is a cost curve and learning curve, and it will take some time before it matures. Till such time, energy needs cannot wait for a developing economy like India, so to continue that, fossil fuels will continue at least till 2040, if not longer, while simultaneously the green business will be, it will be, there'll be balancing, and both of them will run concurrently for years to come, I think. So there will be growth in MS and HSD, as we predict. Right. And you also talked about INR 2,500 crore of CapEx that you intend to do as a part of your INR 1.7 lakh crore CapEx towards gas and marketing. So when you say marketing, does that include fuel stations as well for petrol, diesel, or is it pure gas fuel stations? No, no. The marketing infrastructure will include a mix of retail petrol stations. There will be plants, there will be pipelines and storage depots. That's it. Thank you so much, and all the best. Thank you. Thank you. We have our next question from the line of Sabri Hazarika from Emkay Global. Please go ahead. Yeah, good afternoon, sir. So, sorry, I actually joined in a bit late, so I'm not sure if it's been covered in the opening remarks or not. But, your GRMs have been, like, quite steady. So just wanted to know, was there any specific factors during Q3? And was there directionally any inventory gain impact as one of your peers have reported? See, we cannot comment on the inventory gains right now. Understood. Margins are stable, and we have been continuously working on optimization of the refinery, so these are giving us steady results. Bina and Kochi has done extremely well. Any factor, a specific factor during this quarter, during Q3? No, no, not specific factor. Throughput is lower. Throughput is Mumbai refinery throughput is lower because of the shutdown. We had a 40-day shutdown. Otherwise, it's more or less, it's been the same as the previous quarter. Right. So, so if you look into the crude oil movement, so it has come down from around $90 to less than $80. So technically, there should be inventory losses, right? Do you agree with that, I mean, conceptually? No. Generally, we keep around 15-20 days average inventory only. So even month-on-month basis, if the crude inventory prices are less, comes down, there is not much impact on the refining margins and account of inventory losses. That is the reason we never calculate inventory loss gains on the refining side. Because our inventory, overall inventory levels will be, on an average, around 20 days only. It will not have any big impact on the inventory loss gains. Okay, sir. Fair enough. And, secondly, you mentioned the net debt is currently INR 6,000 crore? Yeah, around INR 6,000 crore. So this is all the capital of current investment and cash and cash equivalent from the gross debt that you have reported, right? Yes, yes. Okay. Okay. Thank you so much, and all the best. Thank you. Thank you. We have our next question from the line of Mayank Maheshwari from Morgan Stanley. Please go ahead. Thank you for the call, sir, and the detailed comments earlier. A couple of questions. First was on terms of, on the Kochi side, can you just talk to us in terms of the contribution on the petrochemical side and the chemical side, and how has been the operations looking like now going forward? Sir, we can't hear you. Hello? Hi, can you hear me now? We can hear you. I cannot hear the Management line. Yeah. Can you hear us now? Yes, sir. Please go ahead. In Kochi, we have a polypropylene derivative petchem plant with a capacity of 329 TMT per annum. The production in 2022-2023 was about 60% capacity utilization, with about 197 TMT. In Q1, it was 57 TMT, that's about 70% utilization. Q3, it was again 57 TMT, which is 70%. The PDPP margins are included in the refinery reported GRMs. The gross margin in Q3 was about INR 120 crore and a loss of INR 45 crore. It's about $0.43 per barrel gross margin, net loss of $0.52. Okay. And sir, can you just talk to us in terms of, is it the industry which is leading to this losses still after multiple years, or it's something more related to your exports of propylene that you have to do? No, it's not exports. If you see the cracks compared to the propylene prices, it is ranging between $250-$530 in the last nine months. Only in two months actually, the prices are peaked, but subsequently after the Chinese demand reduction, the cracks are hovering around $250-$300 only beyond the propylene prices. That is the reason, net margins are on the negative side. Otherwise, as the operating performance said, the plant units are operating at 70%. Maybe once the Chinese demand picks up, the margins will improve. And second one, good positive thing for BPCL is now the imports have stopped. If it is not a BIS product, only in India, BPCL is producing Butyl Acrylate with BIS standard. So with stoppage of imports, the margins will improve. Got it. Will that also result in higher utilization rates now that it's a BIS product? Yes. And you can't import from outside? Right. Right. It improves the utilization. Any targeted production, utilization levels for fiscal 25 that you have in your mind after all the changes? Currently, our target should be for PDPP. This is because it's a complex technology, 80%-85% of target utilization rates. We are hovering at 70%. If the pricing is good, if the imports are stopped, then definitely we can look at it 80%-85% utilization rates. Got it. And so the second question was more related to refining operations for fiscal 2025. Anything in terms of planned shutdowns that you have in any of the refineries for next year? Next year? Kochi Refinery and Bina. Kochi and Bina have planned 15 days, 15 days shutdown of the plants. The exact times are being worked out. Got it, sir. Thank you. Thank you. We have our next question from the line of Varatharajan Sivasankaran from Antique Limited. Please go ahead. Thanks for the opportunity, sir. On the Bina expansion, do you see a significant improvement in the complexity of the refinery as a result of this expansion? Petchem itself will increase the complexity, but otherwise, refining complexity, no. Okay, thanks. Secondly, on Kochi, the propylene balances, now that you are going for polypropylene, if you can give us an insight into what is the current volume and, I mean, do we have to really push to achieve a higher propylene output to meet the polypropylene plant requirements? How does that stand? The current outputs will be sufficient for the- Small revamp too. Small revamp we are doing in the PFCC, so that will take care of the requirement for this plant. Okay. But that doesn't constrain you in terms of usage of crude varieties or whether? No, no, no, it doesn't make a difference. Okay, thank you. And finally, on the retail outlets, you said you have put out an advertisement. Do you still see a requirement for adding outlets, sir? I mean, how does that work in terms of the proposition, in terms of volumes per throughput for the outlet and the economics of additional outlets which you would be taking? We can say very proudly that we are the highest throughput of petrol in across the industry. Throughput, I mean monthly sales per station, okay? So we very judiciously choose locations, and with the growth, India is growing, more and more urbanization happening, more and more people buying vehicles, there is a need. So whenever we, a lthough we advertise for locations, we will be putting up these outlets based on economics and returns, which we normally have threshold on. Thank you, sir. Thank you very much. Thank you. We have our next question from the line of Sumit Arora from Helios. Please go ahead. Yeah. Hi, sir, a very good afternoon to you and the entire team at BPCL. Firstly, sir, I would like to welcome you on this call, and it's a real honor and privilege, Krishnakumar, sir, to have you. And, you know, we look forward to, you know, having much more of you on all future calls. So, thank you very much for that, sir. Firstly, sir, I would like to start by congratulating you on a wonderful performance. You have actually reported INR 105 EPS, you know, which is truly exemplary. So, you know, very well on that performance, and good luck on that, sir. Now, sir, coming to just a few questions which I wanted to understand from you is, so firstly, you know, when you said that, you know, we are going to have maintain a capital discipline, can you please help understand, you know, when you say minimum threshold return ratios, you know, if you can quantify a bit of that so, you know, we kind of get, you know, what you know, you're thinking? Secondly, sir, you know, on the debt point of view, you said that, you know, INR 16,000 crore was our gross debt and about INR 6,000 crore was net. So, sir, does that also include all the liquid investments, what we have, you know? Thirdly, sir, on Mozambique, you know, you made some very important point where you said that, you know, things are progressing on that front. So if you can just, you know, very quickly, you know, you know, give a little bit of color on Mozambique. And sir, lastly, on the retail network, you know, how many fuel outlets do we have today? How many do you plan to add? And, sir, just on that point, on non-fuel retailing, is there any plan we have, sir? Thank you very much. Thank you. So I will respond one by one. To your question of returns, we have a threshold level of approving projects which are between 12% and 15%. 12%- 15%. If there is an economic case for going down, we look at it case by case basis, but otherwise the threshold levels are 12%-15%. The second question on debt levels, net debt levels, it includes all liquid investment. After netting off everything, it's INR 6,025 crore. The third question on Mozambique, we are very optimistic that the force majeure will be pulled back and work will commence shortly, maybe by June or mid-July. And that, I think, will—and every effort is being made by the operator to get the work started. The fourth question was on? Non-fuel retail expansion. Non-fuel retail expansion. We have taken it as a very imperative for us that we need to do when we're going on the EV front and other businesses to mitigate our margins. We have gone big on non-fuel. A separate SBU has been formed to do consumer retailing across the network. And it's early days, but we, we already have about 125 stores going on. So now the, the main game will be on supply chain. We are consolidating the supply chain. So sir, sorry, I mean, when you say that you have 125 stores, so sir, on that, can you help understand then what's our plan on that? Because that can be a very big portion, you know, of the business going ahead, because since we have nearly 30,000 fuel outlets. So what's the, you know, the thought on that, sir? No, no, these are early days. The, I like I mentioned, these are convenience stores and a small set of grocery stores across the network. We have 21,000 outlets. We have about 100, we have made small baby steps in this. Scale up to 3,000. We, we want to scale up to 3,000 stations, but not all stations are viable to have a in and out of these consumer stores. Well, they need a parking, so many other factors. For example, if you put a charging station, that is where we are looking at such stores, so that we can engage the consumer till such time he's charging the vehicle. So these are. There are many factors where we. And there also should be a populace there, which will cater to the stores. So we plan, right now we're about 125. In the next five years, we plan to go up to 3,000 stores. Okay. Thank you so much, sir, and wish you all the best, sir. Thank you. Thank you. Thank you. Before we take the next question, I would like to remind participants to press star and one to ask a question. We'll take the next question from the line of Vikash Jain from CLSA. Please go ahead. Hi, sir. Thanks for taking my question. I had a question regarding staff expenses. So last couple of quarters, it's kind of been a bit higher. So what is the annual run rate that we are looking at on this? Is there any one-off provision or something that is there? Or just want to understand, like, for example, we have nine months is tracking at almost 41% higher YoY, and so is this quarter is about 44% higher YoY. So where should we see this settle on a regular, you know, normal basis for this year and next? Yeah. Current quarter, actually, employee benefits is a little bit on the higher side, because we have taken a small hit in terms of post-retirement medical benefits. There are certain changes in the scheme. Around INR 200 crore, we have taken a hit. Otherwise, our run rate will be around INR 3,000 crore-INR 3,100 crore for full year. Every quarter, around INR 750 crore of employee cost, and our employee size is around 9,000. Every year, around 300-400 retirements and resignations happens, and recruitment size also will be around INR 500 crore-INR 600 crore. So the employee cost range will be around INR 3,000-INR 3,200 crore, that year we are estimating. Okay. Okay. Yeah, and the other thing was on rights issue, sir. So the rights issue that you said you are preparing, doing, yeah, the work on preparing the documents for it. So is it something, since the budget was for this fiscal, and we are just, like, two months away for the fiscal ending, that there is a good chance that it comes pretty much within this fiscal, you know, in terms of the rights issue? Your assessment is right, sir. Sir, just want to understand why we keep paying dividends and are also doing the rights issue. I mean, for a year we could have just held back on the dividends. I mean, from a simple capital structure perspective, it's pretty tax inefficient for the end receiver of the dividend, because he has to pay tax on that, then he puts in money into the rights issue, post that tax. Isn't that something which could have been avoided, or what is the thought on that? No, actually, we, we plan whatever need for funds on the long-term requirement basis, because we have a larger capital outlay of INR 1.5 lakh crore, mainly for green side, green renewable side investments are there. That was the reason actually we have planned for rights issue. But we, we plan it at a minimum level. Whatever exactly we need the funds only, we go for only that much of amounts only. But dividend distribution, you know, as a dividend paying company, we continuously, our dividend rate, at least to 30% of our dividends, we have to distribute as your 30% of our profits as dividends. So that is the reason we have declared the dividend. But this rights issue is for a long-term equity requirement purpose. That is the reason we are planning. Okay, sir. Thank you. All the best. Thank you. We have our next question from the line of Yogesh Patil from Dolat Capital. Please go ahead. Thanks for taking my question, sir. Sir, as you mentioned, during the quarter, BPCL processed 40% Russian crude. How much this has benefited to your GRM for this quarter? And basically, we wanted to understand that if the discounts narrow going forward on the Russian crude, then the impact on the GRM. This is my first question. So generally, we procure crude from various sources. We never calculate the GRM impact on the source wide crude, right? Like, you know, the market conditions compared to earlier years, the Russian crude discounts have moderated, and we hope the Russian crude supplies will continue, but at a moderated discount. So we cannot calculate separately what would be the impact on the GRMs, separately, because different source of crude will have different benefits, and the different crudes will have a different value in terms of output. So we don't calculate individual source of crude where, what is the benefit, but overall GRM only we can calculate. Yes, sir. In last few quarters, you have reported a premium GRM over Singapore. So my question, will you be confident to maintain this kind of a premium, over Singapore GRM in coming periods? Any guidance you wanted to give. It depends on the cracks of diesel, mainly. In case cracks of diesel, if it is hovering around at least, as of date, the forwards are looking good, but how long it will continue above the 20 level? If it is continuing above 20 level of diesel cracks, definitely BPCL, we have a product portfolio in our throughput. The diesel component is high compared to MS. So definitely, we hope we can generate good amount of GRMs. The last question on the capital expenditure side. Till date, the capital expenditure on the Mozambique block by BPCL, can you provide some details on that side? Roughly around INR 900 million we have spent on the development side, and around INR 729 million we have spent on exploration side. As of date, these are the numbers we have already incurred. Okay. And sir, our capital expenditure till nine months, FY 2024 and plans for FY 2025, if you could provide some breakup among the segments, it will be helpful. CapEx is about INR 8,000 crore as of December 31st. The outlay was INR 10,000 crore for this year. Next year will be around. Next year around will be? INR 15,000 crore. INR 15,000 crore will be for next year. Sir, any breakup among the segments like the refining, marketing for the next year? We'll share, sir. We'll share it separately. We don't have the details on hand. Thank you. Thank you. We have our next question from the line of S. Ramesh from Nirmal Bang Equities. Please go ahead. Thank you and good morning, and thanks for the detailed presentation on your thought process. So if you look at the current international refining demand and supply, what do you see in terms of capacity addition, and how much of that will go towards petrochemical integrations? To what extent will that insulate the volatility in the refining margin? Because the demand growth may not match the supply growth. So that's first one. Similarly, in petrochemical, while you're investing, trying to promote CapEx on petrochemicals, what is your reading on the regional demand and supply? Because a lot of the refineries like you are getting into downstream oil to chemical projects. So isn't there a risk of supply growth exceeding demand growth? So if you can please address these two thoughts, I'll be grateful. We are very, I mean, very upbeat on the Indian demand. We also feel there will be opportunities in the Western markets, where increasingly refineries are shutting down. So we feel there will be an opportunity for processed products in the West as well. So as regards to Petchem, while the per capita consumption in India is very low, so we feel there is an opportunity for everyone to equally distribute. Prices may be a challenge, but we'll have to work around that. Okay, and the next thought is on your long-term CapEx. There could be a phase of your ROC coming down, so when do you see the CapEx progressively generating cash flows and improving your CapEx lead by FY 2027 or 2028, or can we expect it earlier, somewhere in the second half of FY 2026? In our capital outlay, major CapEx is going for petrochemical complex and Mozambique. These two projects actually, almost around INR 90,000 crore funding is going there. The cash flows, what we are expecting around 2027-2028, the Mozambique cash flows can start. Petchem, it will be the commissioning we are expecting around 48 months from the date of issuing license there. Maybe probably 2028-2029, mid-2028-2029, the cash flow will start from petchem projects. What are new announced projects? Okay, sir. One more to your earlier question, Our feedstock is going to be our biggest differentiator for petchem, because since we are integrating it with the refineries, it's going—it'll be a game changer for us, we believe. Okay. We'll be competitive in the local market. Okay. So one last thought on the gas business. What is the progress on this gas distribution, geographical areas? Any thoughts you can share on when you will see visible cash flows from that, and when you'll break even on EBITDA? We have about 50 GAs with us, allotted to us, 25 GAs to BPCL and 25 GAs to our joint venture company. 19 GAs. Out of which, 19 GAs out of the 50 GAs, 19 GAs have started, have commenced the business. Okay, and when do you expect them to start generating cash flows or breakeven? It takes time to cross the breakeven, but otherwise, the volumes have started picking up in the 19 GAs. Maybe in terms of PNG connections, it takes a little bit more time, but cash positives maybe in the CNG business, immediately it will start. But for PNG, it will take a longer period of time. We are expecting next one or two years, there will be significant capacity will be deployed there, and good amount of volumes will come. Okay, sir. Thank you, and wish you all the best. Thank you. Thank you. We have our next question from the line of Sangita P. from Cogito. Please go ahead. Yeah. This is Andrey, Sangita's partner. I just wanted to understand as to what is your outlook on crude oil prices for the next six months? I know this is a difficult question, but I've also given to understand that at about $85 a barrel, the marketing margins start turning negative. Is my understanding correct? And what is your assessment of the range within which crude oil prices will likely to hover in the next six months? Your best educated guess. We feel it'll be range bound between $80-$90 in the near term. Looking at $85, I don't think it is quite myopic. We should look at over a longer period of time, because in this game, you cannot look at when you make money at $85 or $86, but we should look at over a period of time. Would you say that if it's range bound within $80-$90, you are reasonably safe on making some kind of positive returns from your marketing margin business? Yes, you're right. All right. What is the extent of discount on the Russian crude at this point of time? I don't think we can share those numbers. Okay. Okay, there was another point of view which said that, you know, that even if for any reason, the Ukraine war were to end, let's say Trump comes to power and he strikes a deal with Putin or some such thing happens. The point of view was that the discounts on the Russian crude are likely to continue, pretty much taking the cues from what has happened to the gas situation. Since Europe and the West have not gone back to buying gas from the U.S., what is being projected is that the same thing will happen in petrol, and therefore, the discounts will continue. Is that your assessment as well? It's speculative. I don't think we can comment on that. We'll have to wait and watch. Okay. Thank you. Thank you very much. Thank you. We have our next question from the line of Harsh Dole from IIFL. Please go ahead. Thank you. I'm actually asking these questions on a couple of investors who have not been able to log onto the call. So essentially three questions. A, assuming that, you know, the Mozambique project starts sometime in June, by what timelines can it end? And, in terms of gas marketing, what arrangements do we have? That's point number one. You want to answer right now, or you're, I'll wait for the. No problem. The second one is, while you have planned the expansion of refinery, you know, what is the sustainable growth outlook on petrol and diesel, particularly, over the next three to five years that you envisage, within the country? And do you anticipate that emergence of EV or, you know, you yourself are rolling out a large number of CGD projects, this growth may be at risk, if not in three, but surely in five years time. And thirdly, essentially some timeline in terms of, you know, the rights issue. By when would you like to approach the market? Any broad timelines for that? Thank you. Hello, can you hear me? Yes. I'll take the last question first. Rights issue, we will tell you shortly, but our endeavor is to try and finish in this current financial year. That's the first question. The second question, as regards to MS and HSD growth, we believe MS will grow even assuming that EV picks up, we believe there will be a growth of 4%-5% in the next 5 years, and petrol will I mean, diesel will grow about 1.5%-2%. Cool. The first question regarding Mozambique. Can you repeat that question? We expect that force majeure to be lifted around July 2027. 2028 is early, when gas will start flowing in. We have done our bit of tying up for marketing of these gas. 1 million metric tons we have tied up. Sorry? 11 million, the consortium has already tied up. So marketing is in place for these guys. Very helpful. Thank you very much, sir. I think, we have completely run out of time. I really appreciate, BPCL management, Chairman, as well as, the Director of Finance for sparing the time, discussing the numbers in detail and also sharing, the outlook for the next few years. Really appreciate, sir, and thank you very much for giving IIFL an opportunity. Ladies and gentlemen, I also thank you all for logging on to the call. In case any of your question is unanswered, do drop me a line. We'll see, that, you know, the questions are passed on to BPCL management, and you get a timely answer. Thank you very much. And, moderator, please disconnect the call. Thank you, Harsh. Thank you. Thank you. Thank you. On behalf of IIFL Securities Limited, that concludes this conference.