Ladies and gentlemen, good day and welcome to Bharat Petroleum Corporation Limited earnings conference call hosted by Antique Stock Broking. 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 touch-tone phone. Please note that this 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, Vishal. Good morning, everyone. We'd like to welcome you all to this call, BPCL's first quarter results call. We have with us the management of BPCL. Mr. Krishnakumar, Chairman, Managing Director, has not been able to join because he had an urgent engagement in Delhi. We have Mr. V.R.K. Gupta, Director of Finance, leading the team. We have Mr. Pankaj Kumar, ED Corporate Finance, Srividya ED Corporate Treasury, Mr. Chandan Negi, GM Pricing and Insurance, and Mr. Rahul Agarwal, Chief Manager, Pricing and Insurance. Without much ado, I would like to hand over the call to Mr. Gupta for the opening remarks. Yeah, thank you, sir. Rahul Gupta, yeah. Thank you, Mr. Varatharajan. Good morning. On behalf of the BPCL team, I welcome you all to this post Q1 results conference. Before we begin, I would like to mention that some of the statements that we will be making during this conference are based on our assessments of the matter, and we believe that these statements are reasonable. However, the nature involves a number of risks and uncertainties that may lead to different results. Since this is a quarterly results review, please restrict your questions to the quarter one results. I now request our Director of Finance, Mr. V.R.K. Gupta, who's leading the BPCL team for this call, to make his opening remarks. Thank you and over to you, sir. Good morning, everyone. Welcome to the post-quarter one results conference. Thank you for joining us today. I hope you were able to go through our results for the quarter. During our last conference in May 2024, we were in the midst of general elections. Since then, the elections are over now, and the new government has been formed, and there is continuing focus on net-zero ambitions and gas-based economy. Further, potential RBA rate cuts above normal rainfall during monsoon, anticipated infrastructure spending are expected to provide medium-term growth impetus. As per different agencies forecast, the Indian economy is likely to grow by 6.6%-7.8% in FY 2025 and continues to be the world's fastest-growing major economy. On the inflation front, India's inflation inched up to 5.1% year-on-year in June 2024, driven by a rise in food prices. During April-June 2024, it averaged at 4.9% year-on-year. However, improved private consumption in rural, supported by a normalized monsoon, and increased Kharif sowing is expected to boost agricultural output and ease food inflation to enhance spending in rural pockets. Crude prices are stabilized around $85 per barrel and are likely to remain range-bound between $80-$90 per barrel range, as the quarter usually witnesses seasonal demand uptick on account of U.S. driving season. Consumption of petroleum products in India has shown resilient growth in the first quarter, with an overall growth of 5.5%. Major products such as petrol, diesel, and ATF have grown by 7%, 1.6%, and 11.4%, respectively. BPCL registered a growth of 6.3% in MS, whereas HSD had a growth of 0.32% year-on-year. We expect petrol and diesel to grow in the coming years. The annualized growth in petrol is expected to be around 5%, whereas in diesel, about 1.5%-2% in the near future. Performance in Q1 2024-25. Our refinery has continued with stellar performance during this quarter, and we have achieved a throughput of 10.11 MMTPA, that is almost 160% of the main plant capacity. Our distillate yield was 84.57% during this quarter, which is one of the highest among Indian refineries. This quarter evidenced a significant forex and international product crack as compared to the previous quarter. Despite this, our refinery has recorded a GRM of $7.86 per barrel in the quarter at a premium to Singapore GRM. We have announced two new petrochemical projects during the last year. We are happy to share that the licenses and PMCs for all petrochemical units have been onboarded. Further, site grading and groundbreaking activities have commenced at Bina Petrochemical Project. On the marketing side, our domestic market shares grew at about 3.2% year-on-year during the quarter to 13.16 million metric tons. We continue to generate the highest throughput per retail outlet among our peers. We per day throughput of 163 KL per month, which is 149 KL per month PSU average, driven by access to strategic markets and strong network along highways. We commissioned about 170+ new retail outlets during this quarter and plan to take our total network to 23,000 by year-end. Aviation business achieved a growth of 15% during the quarter against PSUs industry growth of 7%, with an all-time high market share of 26.9% among PSUs. We have operationalized 25 of 26 GAs with BPCL, except the recently acquired Jammu and Kashmir and Ladakh GAs. BPCL, along with Oil India, as a consortium partner, has received LOI for Arunachal Pradesh, making it our seventh JV in CGD business. We have added 41 CNG retail outlets in Q1 2025, taking the total count to 2,275 stations and plan to add another 300+ outlets in Q1 2025. We have an installed capacity of 77 MW of renewable energy and further 176 MW capacity with both wind and solar regenerative construction. We have achieved the highest ever 14.13 ethanol blending during this quarter. Our 200 KLPD 1G + 2G bioethanol plant at Bargarh, Odisha is nearing completion, and we are targeting to start commissioning activities soon. BPCL is evaluating to create joint ventures in establishing CBG plants with potential players and to create renewable energy assets across India. In terms of sustainable aviation fuel, the Government of India has given an indicative blending target to blend 1%, 2%, and 5% of SAF in the international aviation sector with effect from 2027, 2028, and 2030, respectively. Currently, there is no SAF plant commercially available in India. BPCL is conducting a market engagement study through consulting to assess feedstock availability for SAF production in India. We are pleased to share that BPCL's MAK Lubricants campaign during the Cricket T20 World Cup broadcast has significantly boosted our brand awareness and brand recall. Additionally, introducing the brand ambassador for our premium fuel space during the T20 World Cup has further strengthened our brand presence. Moreover, BPCL's association with the Indian Olympic Association, becoming the first PSU as the principal sponsor of the Indian Olympic contingent, underscores our commitment to supporting national sports and socially responsible organizations, driving long-term growth and value. Without further ado, let me guide you through the financial highlights. The revenue from operations stood at INR 128,103 crore. The profit after tax stood at INR 3,015 crore. Again, it's an estimated capital expenditure for this year of INR 16,400 crore. We have spent about INR 2,438 crore during this quarter. Our standalone network, as of 31st March 2024, is INR 78,054 crore. The earnings per share for the quarter is 7.06 per share. As of June 2024, we are at a fairly low level of debt. The debt equity at standalone gross borrowing level is 0.19x. Overall, standalone gross borrowings is INR 15,210 crore as of 30th June 2024. Again, at these borrowings, we have current investments, including oil bonds, of similar levels, around INR 15,235 crore. At group level, debt equity is 0.54, with gross borrowings of INR 42,217 crore. This concludes my comments, and we will be happy to take your questions now. Thank you. Thank you very much, sir. We will now take the question-and-answer session. Anyone who wishes to ask questions may press star and one on the touch-tone phone. If you wish to withdraw yourself from the question queue, you may press star and two. Participants are requested to use only handsets while asking a question. Ladies and gentlemen, we will wait for a moment while the question queue assembles. The first question is from the line of Yogesh Patil from Dolat Capital. Please go ahead. Thanks for taking my question, sir. My question is related to buffer accounts for the domestic LPG. Sir, you have reported a negative amount by the end of this quarter, and even in the current scenario, you are still losing some money on the sale of domestic LPG. Is there any clause related to buffer account that government will reimburse the under-recovery if the buffer account remains negative for six months, 12 months, nine months down the line? That's one thing. And again, we wanted to understand when government can give or consider this amount for the reimbursement. Any thoughts on this side? First of all, let me clarify. LPG is still a controlled product. The pricing is being decided by the Government of India. Today, during this quarter, the sale price is less than the cost price. As for the current compensation mechanism, there is no budgetary support as of date they have announced. So since there is no budgetary support announced, whatever be the incurrence in terms of losses on account of sale of LPG to domestic customers, that is what we have taken hit to the P&L, and this will continue even subsequent months also. We are awaiting some sort of compensation mechanism from the Government of India. So once we get the compensation mechanism from the Government of India, accordingly, we recognize that credit into the P&L. Do you expect the upcoming budgetary support at 23rd July? Any kind of support? We cannot comment anything because this is what government pricing. So, what point of time government will announce the budgetary support, we are not clear at this point of time. Okay. Sir, my second question was related to Russian crude. What was the share of Russian crude BPCL processed during the quarter? 39% of our entire throughput is from Russian crude during this quarter. Okay. And one more thing regarding, we also want to know directionally, the discounts on the Russian crudes were lower compared to the previous quarter, and is that impacted on the GRM to some extent during the quarter? Compared to year-over-year quarter, significant reduction of discounts have happened. But on a sequential basis, Q4 of last year and Q1 of current year, the trend is similar levels only, $3.5-$4 discount levels. But previous years, if you compare it, the crude discounts are significantly on the lower side. Okay. Sir, we also read about the Andhra-based new refining unit and petrochemical unit, which will be set up by the BPCL. Can you please elaborate on the same? And if possible, can you share some CapEx during the quarter? What was the CapEx during the quarter, and what is the guidance for FY 2025? Yeah. One thing on the refining side, as you see, today we are almost marketing our products around 52.5 MMT estimated sale for this year. Every year, we are purchasing from the private refineries around 5.2 MMT products, around two MMT from the Numaligarh refinery at a 15-year tie-up. We have the marketing rights. And around three, 3.2 MMT, we are purchasing from other standalone refineries. So we are short in terms of products compared to our refining capacity and our market sale. Already, there is a gap of around 5.5 million metric tons. And even if we say a 3%-4% year-on-year growth, this gap will continue for a bigger amount. So that is the reason we are exploring to create some new refining capacity. Some quantity from the existing refineries, we take three or four MMT extra refining capacity. We are exploring a new refining either in the East Coast or other places that we are exploring. We are not yet concluded which location we have to go for a new refining expansion and what is the configuration. We are still studying. Once the configuration studies are over, then we can communicate what would be the CapEx size and what would be the refining capacity and what is the location. Still, we are evaluating that. In terms of the CapEx for the current year guidance, we have an estimated CapEx of around INR 16,400 crore during this year. Already, we have spent around INR 2,600 crore during this quarter. Okay. Sir, if possible, can you share the total consolidated debt by the end of the first quarter and cash position? Consolidated debt is around INR 42,700 crore consolidated group level. We have the surplus cash around INR 15,000 crore. Thanks. Thanks. Thanks a lot, sir. Thank you. Ladies and gentlemen, in order to ensure the management will be able to address questions from all the participants in the conference, kindly limit your questions to two per participant. Should you have a follow-up question, please rejoin the scene. Thank you. We'll take the next question from the line of Mayank Maheshwari from Morgan Stanley. Please go ahead. Yeah. Hi, sir. Thank you for doing the call. Two questions from my end. First was more on market share. I think, especially on an overall basis, you have grown a bit slower this quarter compared to the industry growth. So can you just comment in terms of how you are trying to defend your position, considering the impact of private player demand that's coming through, well, competition that's coming through? Any things that you're seeing there that you can kind of help us out? Yeah. This quarter, yes, I agree. We have grown at 3.2% compared to industry. We are not better than industry. There are two reasons. Compared to previous year, because when the crude prices are higher and we have not passed on the budget to the customers, the private sector volumes have come to public sector last year. Whereas currently, since the pricing has improved, moderated, the under-recovery has come down. So the private sector has taken back their normal volume. That is the reason. Diesel, we are not growing. Diesel is a little bit degrowth. However, MS, we are doing good, and MS, we have a good amount of growth. So you think your diesel market share comes back to you, or you think there will be a new normal that you kind of take? Yeah. We are expecting in the coming quarters, it will become positive in diesel growth. Current quarter, there is negative growth, but we are expecting this will reverse. Sir, the second question was more related to industrial products and margins there. Have you seen some impact on margins in the last quarter because of competition, even on the industrial side? No. Competition is there even earlier years. Now that this competition has come new in the industrial segment. So we are not forcing any squeezing of margins on the industrial segment. Similar levels of margins will continue. Okay. Got it. Thank you. Thank you. We'll take the next question from the line of Sumeet Rohra from Smartsun Capital. Please go ahead. Hi, sir. Good morning. Thank you very much for doing this on a Saturday. Sir, my question more is on the LPG front. As you mentioned that LPG is a controlled product by the Government of India. Effectively, sir, can you first quantify what's the amount of LPG under-recovery you have taken in this quarter? Is it INR 2,900 crore? Am I right on that? The LPG impact during this quarter is around INR 2,300 crore because we have a positive buffer of INR 280 crore beginning of the year. Currently, as the positive buffer becomes negative buffer of INR 2,015 crore, that means that net impact during this quarter is around INR 2,300 crore on account of LPG. Currently, even if we take the current Saudi CP prices of around $570 per metric ton, we are expecting around INR 600 crore per month is the LPG impact. Understood. But sir, now, I mean, the micro fact is that, see, my question to you is more as an investor rather than anything else. So how do we look at it? Because since it's a controlled product, it's obviously going to be compensated to you as it's always been in the past. So assuming that it's done, so you would reverse it immediately in this quarter? I mean, if I'm becoming correct, or would you? Yeah. Whenever the competition mechanism clarity comes from the Government of India, immediately we take that P&L credit. Okay. And sir, secondly, I mean, on the pricing point of view, is there, I mean, the macro fact is that now crude is very well in the range between $80 and $90, as you highlighted. But are there any thoughts on the pricing mechanism or something of that sort? No, no such conversations are happening now. The crude is hovering at around $85. So as long as $80-$85, we are comfortable with the current pricing. Okay. Wonderful. All the best, sir, and wish you good for the future, sir. Thank you. The next question is from the line of Sabri Hazarika from Emkay Global. Please go ahead. Yeah. Good morning, sir. I have three questions. So first one is on this LPG losses only. So I think a couple of years back, also, you bought around INR 22,000 crore that was given with a one-time settlement. So who basically goes for this? Is it you, or is it PNG who goes to the finance ministry? What is the run-up to this declaration of one-time compensation for LPG? No. You see, we see the actually price movement, one-hour price movement, if the Saudi CP goes on a higher side, then we start incurring the losses. This quarter is around INR 2,300 crores. We are awaiting some sort of government support. I'm not sure when the support will come either this quarter or subsequent quarters. We are awaiting the confirmation from the Government of India on what subsidy mechanism we will get. Is it now with the finance ministry this week or is it with? It will be routed through our ministry, parent ministry to finance ministry. Finance Ministry. Okay. Secondly, marketing inventory gains have amounted to around INR 400 crore. So can you give some color on, I mean, what you see this elevated inventory gain on this? So how has it come from? This marketing inventory gain, generally, we calculate because the RTPs are changing on fortnight to fortnight basis. So whatever inventory levels we have at the marketing locations, the differential between the price between the fortnights, and we calculate what is the inventory gains. Okay. So it is more to do with RTP rather than retail pricing. Is that right? No, no. RTP. Right, right, right. Nothing to do with the retail selling price. It is only RTP. Okay. Whenever there's an excise cut, that also affects the RTP rather than the retail cut direct. Right, right. Whenever excise cut or excise changes happen, it will have an impact on the inventory gain also. Okay. And sir, last question to you. How many retail outlets you have added in Q1? You said 22,000 is your target for the year. 171. During this quarter, 170. Okay. Thank you so much and all the best. Yeah. Thank you. We'll take the next question from the line of Kirtan Mehta from BOB Capital Markets. Please go ahead. Thank you, sir, for this opportunity. In terms of sort of the additional refining capacity that we are looking at either of the two locations, you previously stated that you like to grow the refining capacity to 45 million tons. So is this new refining within the 45 million ton capacity target, or are we looking to extend refining beyond that? The announced plans of 45 MMT from the existing refineries. So what we are looking at is much beyond 45 MMT because our market share itself is this year we are estimating around 52, and we are purchasing around five MMT of products from the private refineries. And if the growth is around 4% or 5% growth year-on-year, if you take it, by 2030, we will have a shortage of a good amount of refining capacities. So that is the reason we are exploring to look at additional capacity of refineries beyond 45. Understood. In terms of the NRL, when it gets expanded, we will still have the right to market NRL products as well. So that would still remain our capacity, and it will not necessarily be a shortfall. Existing agreement is for the existing capacity. So we are not yet signed any MOU for the additional capacity. We have a marketing rights, but we have not signed any additional capacity MOU. Would this capacity be of the order of 10 million ton or what would be the typical price that we will be looking here? We are not yet concluded. Maybe nine MMT trying or 12 MMT trying, which is commercially more viable accordingly where to take a call. Still, we are exploring what would be the best configuration and what product portfolio you have to take. So we are still studying this. Sure. On the E&P side, could you update us on the status on the Mozambique as well as the Brazil block? Mozambique still force majeure is continuing because our security situation has improved a lot compared to previous quarter. We are expecting maybe in another one quarter, there may be some good things can happen. That is what. And secondly, the existing vendors or contracts are in place. Secondly, the project financing discussions are happening with the lenders. Maybe we have to wait for one more quarter and see when the force majeure they are declaring for appointment of the force majeure. And secondly, for the Brazil, the development plan has been submitted to the ANP that we are yet to receive the approval from the ANP. Once that approval comes, then automatically the development program will continue. In Brazil, this is related to BM-SEAL-11 block, correct? Yeah. Exactly. SEAL-11 block. In terms of the Mozambique, do we have idea about the cost escalation that may happen with this delay? Project cost is $15.5 billion. Some indicative numbers they are shared. It may be around $19 billion. Maybe that means around $3.5-$4 billion increase of the project cost. So we are expecting around $19.5-$20 billion project cost will happen. Is there any way we can sort of maintain the IRR on this project, or that will translate into correspondingly reduction in the IRR as well? IRR definitely because the project cost is going up, the sale contracts are intact. So definitely, there will be an impact of IRR. But going forward, still the IRRs are commercially viable IRRs. Right. Thanks for this detailed answer. Thank you. The next question is from the line of Maulik Patel from Equirus Securities. Please go ahead. As the current participant has left the queue, we will move on to the next question from the line of Roshni from Arqaam Group. Please go ahead. Yeah. Hello, sir. Do you have any turnaround plans this year for any of the refineries? We have both Kochi refinery and Bina refinery. We have turnaround plan. Bina will be around 15 days. We have a turnaround plan, and Kochi will be having multiple units 30 days and 15 days. So 45 days turnaround plan during this year. The turnaround will start in the month of September to October, and Bina will be August to September. Okay. But any plans for the Mumbai refinery then? No plan shutdowns. No plan shutdowns. Okay. But which section units of this Kochi and Bina? Any light on that? Key will be CDU2, FCCU block, and VGU, HGU. Majority of the units are going for shutdown. DHDS, SRU. Okay. And Bina? Bina, HCU, DHT, HGU, SRU. All four major units. 15 days, we are planning a shutdown. Okay. Sir, in terms of are there any term deals that's being discussed with Russia? Are you exploring it on that side? We are exploring. The discussions are continuing, but nothing is concluded for Russian term deals. But anyhow, we are getting spot basis sufficient INR crores from the market. But term deals, still, the discussions are going on. We are not concluded anything on it. Right now, all the deals are on spot basis, right? Right, right. Spot basis. Okay. So are the spot deals more the discounts are better on spot than the term ones? Similar. Similar levels only. Only term will give only product security. Otherwise, discount levels will be similar levels only. Okay. Okay. Thank you so much, sir. Thank you. The next question is from the line of Maulik Patel from Equirus Securities. Please go ahead. Yeah. Sorry to interrupt, sir. Your voice is breaking. We can't hear you clearly. Yeah. What do you want now? Sir, may I request you to kindly use your handset? Yeah. Please use the handset only. Sir, there is a network issue on your line, sir. We are not able to hear you clearly. Can you please rejoin the queue? Sure. Thank you, sir. We'll take the next question from S. Ramesh from Nirmal Bang Institutional Equities. Please go ahead. Good morning and thank you very much. If you look at the Bina refinery expansion plan, when do you see the refinery expansion to be completed? Our project scheduled completion will be FY 2028-2029. May 2028 is our target date for refining expansion, refining to specialty employee expansion. We are expecting during FY 2028-2029, the commissioning will happen. Okay. Now, on the CGD business in the commercialized GAs, can you give us what is the year-to-date CapEx and what is the CapEx you're planning this year? And when do you see the visibility on the revenue and EBITDA from the commercialized GAs on standalone basis? Yeah. On standalone basis, we have 26 GAs without the licensing, exclusive licenses. Out of 26 GAs already, from 25 GAs, the operations have started. During this year, we have almost during this quarter, 28 TMT of sale has happened from these particular GAs. In terms of the CapEx, during this year for CGD, we have spent around INR 316 crore. Current year, the CapEx target for CGD business will be around INR 2,800 crore-INR 3,000 crore. What is the aggregate CapEx you've incurred to date on CGD? CGD aggregate CapEx is almost INR 5,857 crores on 25 GAs. For all 25 GAs, we spent around INR 5,857 crores. When do you see the commercial impact on the P&L in terms of revenue and EBITDA from these standalone GAs? Our target for the CGD expansion will be in the next five years, around INR 25,000 crore we have allocated the capital. The volumes have started coming from the CNG and bulk business. We are expecting maybe 2026, 2027 onwards, the significant jump of volumes will happen. Otherwise, the initial volumes as per the plan, it has started. Okay. Now, my last thought on the consolidated results in the other matters under 6A, there is a mention of total loss after tax of INR 490 crore, which I presume is for Bharat Petroleum Resources. So would it have any cash flow impact, and does it need any additional funding support from BPCL for Bharat Petroleum Resources? Bharat Petroleum Resources, if you see, Bharat Petroleum Resources, the major two blocks are Mozambique and Brazil. Both the blocks, the investment equity infusion will continue because as per the project plan, also we have to increase certain quantum of equity. And BPRL as of date, there are no cash-generating blocks there. So whatever Mozambique and Brazil, the required funds either through project financing or our equity route, it should go. The only reason why this INR 490 crore of major expenditure during this year is the Mozambique project is in our force majeure. So since it is in the force majeure, the borrowing costs, we cannot capitalize it. Everything we have to take it to the P&L. So that is the reason there is a loss of around INR 490 crore in BPRL. There will be definitely equity infusion will happen once the project restarts and the development work happens for the Brazil. Thank you very much, and wish you all the best. Thank you. We'll take the next question from Saket Kapoor from Kapoor and Company. Please go ahead. Yeah. Namaskar, sir, and thank you for the opportunity. Sir, firstly, if you could articulate to us the reasons for lower cracks for the current quarter and post the exit of June, how are the cracks behaving for the month of July? Yeah. During this quarter, the cracks are subdued. Spreads are on lower side compared to previous quarter. There are two reasons. What we have observed is that the inventory levels of gas oil and gasoline are on a higher side. And we are expecting the demand will pick up once the US driving season comes. Already, we started picking up the cracks even in the July and August forward, you see. Compared to the earlier months, the spreads have improved a little bit. And once the U.S. driving season goes, the inventory levels will be on a lower side. And we are expecting by Q3, the gas oil and gasoline cracks will be much better than the current levels. Post the June, also, what are the current cracks, sir, for the gasoline and diesel currently? $18.50. Now, $18 gas oil, we are looking at $8 gasoline and $15 is in gas oil. Okay. What was the average for the June quarter? During this quarter, $8.58 gas oil in April to June average, and gas oil is $14.76. Now, slightly around $1, it has been improved from the average current quarter cracks. Right. Sir, and on the CapEx front, sir, what has been allocated in terms of our ENP activity and in terms of also the if you could give the number for the pipe segment, seamless pipes and all which are required in the drilling ENP activity, what have we outlined for the current year in terms of the casing pipes and the seamless segment? Yeah. Current year, we have estimated a CapEx of around INR 16,400 crore. Out of which, major investment is going to happen for refinery and petrochemicals around INR 4,300 crore. Exploration side, we are planning to have an equity infusion of around INR 2,250 crore for exploration activities. Marketing mainly for pipeline expansion and our infrastructure creation at marketing location. The total CapEx allocation will be around INR 7,100 crore. CGD, we are allocating a CapEx of around INR 2,000 crore. Right. Lastly, on the lubricant part, sir, what is our current market share and what was our volume for this quarter? That will share it separately, lubricants. Okay. I'll join the queue, sir. And thank you for all the and sir, sir, we can look forward, sir, for investor presentations, sir. I think so, if I've not missed correctly there. We are coming up with our numbers, but press release and investor presentations do not form a part of our event. So can we look forward for these two also being a part and parcel along with the continuity of conference? Yeah. We will look at it. We will look at it. Thank you. The next question is from the line of Gagan Dixit from Elara Securities. Please go ahead. Yeah. Thanks, sir, for taking my question. Sir, my question is regarding this new refinery plan. So what are the key criteria that you look for setting up the refinery? I mean, it's something that demand that you want to see or you want to see some advantage on the petrochemical side, or what are the, I mean, the criteria that you are evaluating, I mean, from this new refinery purpose? Yeah. Both things we are planning. In fact, our corporate strategy, if you see, we want to take our petrochemicals portfolio from the existing 1%, less than 1% today, our petrochemicals portfolio. After Bina expansion and the petrochemicals project, we are planning to take our total portfolio of petrochemicals to 6%-7%. But long-term, as a good diversification and having a good product portfolio, we want to take petrochemicals at least 15% of our product sales should be petrochemicals. That is one criteria. Secondly, even when we have a market sale of around 52-53 MMT of market sale, we don't have sufficient refining capacity at this point of time. So even on the demand side, also, India is growing at least 5%-6% of energy demand. If the growth continues even in the next four to five years, we are a good amount of shortage in terms of the refining for BPCL. So by keeping these two factors, we want to add some more refining capacities with a little bit more on petrochemical configurations. That is what broadly we are looking at it. In fact, what I know that I think long back, you had some land already purchased two decades back, I think, in Allahabad. So that land is still there if you want to set up the refinery, might be possible at the location. Yeah. Land is in the name of BPCL only. There are small encroachments that have happened. But anyhow, we are taking care to remove the encroachments. Land is still with BPCL only at Allahabad. Okay. So that can handle the 10 million ton also refinery if you want. I mean. Yeah. It can handle it. It can handle a nine MMT train or 12 MMT train. It can handle it. Inland ports. Okay. Okay. That's from my side, sir. Thank you. Thank you. The next question is from the line of Sumeet Rohra from Smartsun Capital. Please go ahead. Hi, sir. Thanks once again for the opportunity. Sir, I just wanted to get a sense of you on profitability because I'm just looking at this. On a phone call of nearly 1 hour, we spend nearly 50 minutes on CapEx, which is actually a burden to our shareholders. So can you talk a bit on profitability? Because I understand that on this quarter, we have reported a profit of about INR 3,000 crore after absorption of the LPG figure of INR 2,300 crore, plus we had a INR 400 crore inventory gain. So technically, you reported about INR 4,800 crore of profit in this quarter, which is absolutely astounding and good. So, sir, I want to pick your brains on this. Is that so do you see this profit sustaining? Firstly. Secondly, sir, you have something called Project Aspire, wherein you are looking to double profitability as well. So can you please talk a little bit about your Project Aspire on profitability and how do you see the next few years shaping up in terms of PAT, sir? Yeah. Thank you. Rightly you have observed our profitability. Whatever you say, that is the correct number. This is a normalized profit if you remove the LPG under-recovery inventory gains, somewhere around we are at INR 4,800 crores or INR 4,700 crores profit generation during this quarter. So a couple of things. The refining margins are still commanding at a good level. Even a 10-year average GRMs compare, even if you compare the current quarter GRMs, they are better than a 10-year average GRMs. And the cracks we are expecting, which will continue for a longer period of time, even a short period of time, the cracks are on the lower side. Within the next couple of quarters, the cracks will improve. We are looking at a similar level of refining margins, and if the crude is at $80-$85 range, whatever our profitability, we are comfortable position in terms of whatever CapEx programs we have announced for the future. In terms of our project aspect, yes, definitely our aspiration to become for doubling the profits from the normalized profit of around earlier INR 12,000-INR 30,000 crore of profits of the company. So we are aspiring to take it at least two times. That is the reason we have announced a major large project in terms of refining expansion and petrochemicals. By FY 2028, 2029, so once all these projects' commissioning is completed, then we can look at a good amount of growth in profitability. Sir, just I have just one very humble suggestion, being in the best interest of our company. Sir, if henceforth we can spend a bit of time on profitability as well, because that will inspire and give confidence to our stakeholders of exactly where we are headed. Because it is very difficult to disaggregate numbers on a company which is selling so many products across so many verticals. So, sir, as we talk about CapEx, talking about profitability will also help in a big way, and it will actually restore confidence among the stakeholders. So that's something which came to mind, so I just thought I'll bring it up to your attention, sir. And wish you very well. All the best, and I sincerely hope that you can deliver on this INR 20,000 crore profit which your company deserves. Thank you, sir. Thank you. We'll take the next question from the line of Vipul Shah from Sumangal Investments. Please go ahead. Hi, sir. Thanks for the opportunity. So my question is, what is our cumulative investment till date in BPRL? BPRL, our total investment as of date, it is almost we have committed around INR 37,000 crore in BPRL. Majority of the investment is through borrowings. We have invested in equity of around INR 10,700 crore and the balance is through borrowings. Total our commitment in exploration till date is INR 39,358 crore as of June 24, 2024. 39? 39. Okay. Sir, one small suggestion. If you can make a handout and investor presentation as part of your result, it will be very helpful, sir. Thank you. Thank you. The next question is from the line of Somaiya V. from Avendus Spark. Please go ahead. Thanks for the opportunity, sir. Sir, on the Bina expansion, can you just help us out on the timeline or in terms of milestones, what we are looking at in the next two, three years? And also, for the current year, CapEx, what you mentioned for refining, how much is that going towards Bina? And also, next one or two years, how we plan to spend on the CapEx progress for this project? Yeah. For Bina, the total project cost is INR 49,000 crore. It is having two components: refining expansion for petrochemicals both. It is an integrated project. Current year, the financial progress may not be much because that current year we are estimating around INR 2,000 crore CapEx increment will happen for Bina. But physical activities, the major milestones of selection of licensor and selection of PMCs, almost we have completed that milestone. That is the biggest milestone we have achieved as per the schedule. And second, the field works in terms of ground leveling and roads and internal infrastructure works have been awarded to the contractors, and the work has been started. The actual CapEx for this project happens from the year three onward. So year one, during this year, we are expecting around INR 2,000 crore, and next year will be around INR 7,000 crore-INR 8,000 crore. But year three will be the major CapEx, and commissioning, we are planning the commissioning activities as per the project schedule. FY 2028, 2029, the project will be commissioned. Got it, sir. At a company level, what are the CapEx run rates? This year you mentioned INR 16,500. Taking Bina's expansion requirements, so how it will be in year three, what will be the run rate, CapEx? We will share separately that five-year breakup. Okay, sir. So now, also, this year, you mentioned INR 7,100 crore CapEx for marketing. I mean, in terms of station additions, can you give some granularity in terms of how this is? Yeah. Marketing infrastructure is mainly four or five components. One is we have large pipeline network. We are expanding product pipeline networks. One is Krishnapatnam, Hyderabad, one pipeline, and Irimpanam some pipeline. Irugur Devangonthi one more pipeline we are planning. And we have a certain project at Rasayani for LPG import terminal as well as our infrastructure tank creation at Rasayani. And from retail outlet point of view, we are planning around 1,300 outlets during this year and 300 CGD stations. Broadly, it is a combination of both infrastructure creation and marketing locations, expansion of marketing locations, along with creation of EV charging stations, around 3,500 EV charging stations we want to create during this year. With this, we are expecting around INR 7,000 crore of estimated CapEx for marketing initiative. Got it, sir. Sir, on the refining front, in terms of Russian crude sourcing, so this 39%, so this is the max that we can take up for our refineries, or there is still some headroom in terms of increase? Maybe 1% or 2% more headroom, maybe 40%, 41% we can take. Otherwise, around average 39%-40% only we can process. Understood. There is a headroom, but technically, we want to restrict at 39%-40% level. Sir, and also, in terms of Middle East crude sourcing premiums or discounts, I mean, how has the direction been in the last few months? Any thoughts on that? No. Compared to during this year, the beginning, if you compare with April, May, current OSPs are moderated. This OSPs will be further moderated because anyhow, the cracks are not there. Cracks are on lower side. I don't think OSPs premium will be on higher side when cracks are on lower side. Got it, sir. And, sir, any impact in the recent times because of the freight cost kind of going up? Any impact to us in terms of either sourcing cost? Slightly, it is better. Compared to previous year, the freight rates are comparatively better. The initial days of Russia, Ukraine war, the freight have picked up. Now it is comparatively better freight rates. And most of the cargoes, if you see, we are purchasing on delivered basis. Most of the Russian cargoes are on delivered basis. So there is no much impact of freight on our account. Got it, sir. Thank you. Thank you. We'll take the next question from Saket Kapoor from Kapoor & Co. Please go ahead. Yes, sir. Thank you for the opportunity again. Sir, for the ethanol blending project, what have we outlined for the current financial year in terms of the procurement exercise? And also, there have been talks about laying of separate pipelines for transportation of the same or setting up to reduce the transportation cost for ethanol. So if you could give some update on the same, sir, what is our current year target? Ethanol currently, we are blending about 14%. This is one of the highest. Until last year, we were blending about 12%, 12.5%. Our target is to achieve around 15% in the current quarter. The government has mandated about 20% from FY 2025. Sir, in terms of crore liters, can you mention how much have we ordered and what have been our procurement for the first quarter and what will be for the full year? Yeah, we'll share it separately. Sir, two questions are pending. For the lubricant part, you said you will be sharing separately. Now for ethanol also, you want to share it separately. Separately, sir, how will you share if you could just elaborate? My email. Yeah, my email outing will separate. Okay. But our emails are not registered with you, sir. How will you know? Sir, I think these questions can be answered in the form of a release or submission to our website or through exchanges so that it could benefit investors at large and not pertaining to one or two specific investors only. We'll share it to Antique Group, the call organizer. Come again, sir? We'll share it to the Antique Group. Through Antique Group. So we have to get in touch with them, sir. Lastly, on the procurement part, sir, in terms of crore liters, you can give an idea last year how much we have procured and for the first quarter numbers? So you have the numbers with you? We'll share. We'll share. Right, right, sir. Fine. For the profitability part, sir, as one of the investors mentioned, so if you normalize the quarter as a whole, the PBT number for this quarter is INR 4,800 crore as has been confirmed by the management team. I mean, you can take INR 4,600 crore tax impact if you remove. Maybe LPG under-recovery, you add back at INR 400 crore of inventory gain, you remove. So around 4,600, INR 4,500 crore- INR 4,600 crore. What is the comparable? What would be the comparable number, sir? Comparable what? Compare numbers Q1, Q1, and also last year, sir. If we take the similar parameters, what should be the June 2023 comparable numbers look like if we compare like-to-like basis? Then we have to work out. Didn't get you, sir? We have to work out what was the LPG under-recovery at that point of time or negative buffer. We have to work out separately. If we could just summarize the questions and the unanswered part during the call, and if that could be just worked out for the coming quarter, that would be very, very, very helpful for investors and the analysts so that we can get the information right during the call. So I hope the team will be better prepared going ahead. Yeah, we'll look at it. Okay. Thank you. Thank you, sir. Thank you. The next question is from the line of Vikas Jain from CLSA. Please go ahead. Hi, sir. Thanks for taking my question. Just one question. Why are we adjusting the LPG under-recovery? Because that is not anyway part of the income statement since we are using normalized margins to get to our reported profit, right? That's part of the buffer. So if anything, if we take the losses, then in fact, the reported, and go to the old accounting where losses were part of the base income statement, then profits will be lower by that INR 28,100 crore or whatever the number is, right? Yeah. LPG, once again, we are clarifying, LPG is still a regulated product. The pricing is decided by the government of India. So we have disclosed on account of LPG what would be the negative buffer. With this negative buffer, after absorbing this much of losses, we have around INR 3,015 crore of profit after tax during this quarter. Now, different ways of calculating what would be the normalized profit in case if there is no under-recovery LPG, that is one way of calculating what would be the normalized profit. Otherwise, since there is no compensation mechanism, LPG losses have been absorbed by the company. No, sir. Sorry. What I'm not able to understand, when you say you have created a Buffer Account, so has that loss become part of your marketing profits as you have reported, or that is something which is created beyond? It's not part of the income statement right now because your profits are being calculated at the normal level of LPG margins, and that is being kept out of income statement as a receivable which you will take, right? No, no, no. Once again, I'm clarifying. The current practice, if there is no compensation mechanism, if there is any over-recovery of LPG prices, we create a buffer and we show it as a payable, we don't recognize any income. Whereas in case of if there is any LPG losses, there is no compensation mechanism, we take the hit into the P&L. That means the margins are lower on that particular direction of that said, we don't create anything as a recoverable. Understood. Thank you so much, sir. Thank you. We'll take the next question from Vivekanand Subbaraman from Ambit Capital. Please go ahead. Yeah. Hi. Thanks for the opportunity. Just one simple question. The sequential change of around INR 750 crore-INR 800 crore of Oil Bonds, what was that on account of? Can you explain that? Thank you. Yeah. We have started because we have some cash surplus available during this quarter. Because government borrowings, we have to hypothecate certain G-Sec investments. That is the reason we have acquired additional G-Sec investment during this quarter from the market. Okay. Sorry. This is to have overnight borrowing, you have to. Yeah. We have to place certain investments. We have the cash surplus. So we have started investing in the G-Secs and Oil Bonds. That is the reason incremental Oil Bonds have gone up. They're not Oil Bonds. They're government securities. Government securities, Oil Bonds, all put together. Okay. So these were issued by the government fresh, or were you purchasing? It is from the market. It is from the market. It is from the market. Okay. Understood. Okay. Okay. It's like treasury operations. Okay. Thank you. It's only treasury operation cash management. Yes. Understood. Thank you. Thank you. Ladies and gentlemen, we will take that as the last question for today. I would now like to hand the conference over to Mr. Varatharajan Sivasankaran for closing comments. Over to you, sir. Thank you, Nishesh. I wish to thank all the participants and the management of BPCL for taking time out to join this call and discuss all the issues. Thanks, everyone. Have a nice day. Thank you. Thank you, members of the management. On behalf of Antique Stock Broking, that concludes this conference. Thank you for joining us, and you may now disconnect your line. Thank you.