Ladies and gentlemen, good day and welcome to Hindustan Petroleum Corporation Limited Results Conference Call, hosted by Antique Stock Broking. As a reminder, all participant lines will be in 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 telephone. Please note that this conference is being recorded. I now hand this conference over to Mr. Varatharajan Sivasankaran from Antique Stock Broking Limited. Thank you, and over to you, sir. Thank you, Nikita. Good afternoon, everyone. It's my pleasure to extend a very warm welcome to all the participants and the management of HPCL, led by Mr. Rajneesh Narang, Director Finance, and holding additional charge of CMD as of now. Mr. S. Bharathan, Director, Refineries. Mr. K. Vinod, Executive Director, Corporate Finance and CFO, and his entire team. I would like to hand over the call to Mr. Rajneesh Narang for his opening remarks, and then we can move to the Q&A. Yeah, g ood afternoon, Varatha, and all the participants who are attending this con call. A very good afternoon to all of you. We had our board meeting in the first half of today, and it is a matter of pride for me to say that in this quarter, the HPCL had a good physical performance, both in refineries as well as marketing. As regards the standalone revenue from operations, it is INR 1,08,216 crore, which is INR 1,02,618 crore in the corresponding previous period. In terms of the physical growth, we achieved 8.2% over the previous corresponding period. The standalone profit after tax during this quarter is INR 631 crore. The primary reason for lower PAT are the suppressed marketing margins on Select Petroleum products, reduced refining margins due to lower cracks, and falling international crude and product prices. I'll just give a brief of what are the impact of these three. Like, in terms of the suppressed marketing margin, in terms of LPG, we had an underrecovery of INR 4,400 crore during this entire half year, and if we have to take only the quarter, that is Q2, it's almost INR 2,057 crore of underrecovery, which is sitting as a negative buffer in our books. In terms of the reduced refining margin, the cracks have significantly come down, and if I have to give you a benchmark, the Singapore GRMs, during the corresponding period of the previous year, it was $10 a barrel, whereas in this quarter it is $4 a barrel. Primarily, since the GRMs were significantly lower in this period for MS and HSD, there was an impact as regards the refining GRMs are concerned. Third, during this quarter, the crude prices with respect to the previous quarter, have come down by almost $5 a barrel. Now, this reduction of $5 a barrel, both in terms of crude as well as the various finished products which we hold, has an impact of almost INR 1,400 crore in terms of inventory, inventory loss. Now, if we are, if I have to talk about the GRMs, so the GRMs during this quarter were $3.12 per barrel, which was $13.33 per barrel during the corresponding period. This reduction, and as already stated, is in line with the trend of international benchmarks and product price. Now, coming to the physical performance, the refineries recorded crude throughput of 12.06 million metric ton. The refineries had operated 103.7% of the installed capacity, registering an increase of almost 8.2% over the throughput of 11.15 million metric ton during the corresponding period last year, April to September 2023. Now, if you take specifically the Q2, the throughput was 6.3 million metric tons, and the refineries had operated at capacity utilization of 107.7%. We have also added new crudes to our basket. Two new crudes we have started processing at Visakh, and taking the total crude basket to almost 30 odd crudes which we are having. In terms of the marketing sales, we recorded 24.25 million metric tons, registering a growth of 7.3% as against 22.59 million metric tons during the corresponding previous year. The company recorded sales volume of 11.62 million metric tons during second quarter, reaching a growth of 8.2% as against 10.74 million metric tons during the second quarter of the previous year. On the domestic front, HPCL achieved sales volume of 5.6% during the quarter, as against PSU industry growth of 1.8%, reaching a market share gain of 0.78%. In terms of the product-wise, say, motor fuels were growing at 4.5%. The aviation business has been growing at 19.6%, and in case of lubricants, we are growing at almost 5%. And even as regards the petrochemical, where we have already entered the market a year back, we are doing almost 30.4 TMT. As regards the pipelines are concerned, we had a throughput of 6.53 million metric tons vis-à-vis growth of 6.5% over the previous financial year. In terms of our growth projects, during this period, we invested INR 3,771 crore to strengthen our refining and marketing infrastructure, including investment in joint venture and subsidiary companies. And the total CapEx during this half year is almost INR 6,590 crore. As regards our Rajasthan Refinery, the construction of all process units, they are progressing in full swing. The current physical progress, as concerned, is almost 83%, and if I take the refining units, it is more than 92%. The key process unit, which is DHT, the hydrogen generation unit, they are under pre-commissioning. And as regards the crude oil pipeline for both imported as well as domestic, the job is almost nearing completion. As on thirtieth September, the total commitment on the project is almost INR 70,872 crore, and as regards the CapEx outflow is concerned, it is INR 50,570 crore. As regards our Visakh Refinery Modernization Project unit of Residue Upgradation Facility, that is the Residue Upgradation Facility, we have started the pre-commissioning of this unit, and we expect that in the last quarter, that is Q4 of this financial year, the unit would be commissioned. The moment this unit gets commissioned, it will be able to have a higher distillate yield, whereby we used to be, it could be, so, it will enable us to process or upgrade the bottoms to higher distillate products. This unit is one of the largest and most energy efficient units, and the technology is the one of this scale, which is being implemented by us. During this second quarter, we commissioned 353 retail outlets, taking the total number of outlets to 22,501. We also commissioned six new LPG distributors, taking the total count to almost 6,364. In terms of new business initiatives, we have started manufacturing Group III 500 Neutral base oil in our Mumbai Refinery. Our aviation business achieved a significant milestone by securing orders for developing and operating the fuel farm and the into plane services in the new airport, Greenfield International Airport, which is likely to come up in Bhogapuram, Visakhapatnam. This airport is being set up by GMR, by the name of GMR Visakhapatnam International Airport Limited. It was a new feather in cap for our lubricant business, whereby we made the first ever export sales to U.S.A., thus increasing our footprint to more than 30 countries now. As regard our plan of the value unlocking in the lubricant business, we are already in line with the recommendations of the consultants. We have already started taking initiatives around supply chain, cost optimization, product mix spread, and also rolled out customer engagement programs for improving our reach, as well as improving the efficiency in this business line. As regard our plan for the carve-out is concerned, we are actively pursuing the same with the appropriate authorities for seeking approval for going ahead on this. As regards our HP R&D, R&D center, the total patents as on thirtieth September is 606, which we have filed. Out of which, 232 patents have already been granted. There have been various niche technologies which we have developed there. One of them is the technology which has reached the commercial scale is the vapor recovery plant based on HP-VRU technology, which we have already implemented in our Hassan terminal. Further, we have developed the HP-DRA, which is a drag-reducing additive for reducing pressure drop in product pipelines, and it has been successfully tested at a commercial scale in our VVS pipelines. The state-of-the-art catalyst, additives and absorbent scale-up facility have been commissioned and made operational, thus empowering the scaling up of our R&D centers, innovative catalysts and products for field-level demonstration. At Visakh, with Visakh Refinery, we have commissioned the first-ever green hydrogen plant in any refinery. The plant capacity is 370 TPA of green hydrogen using green power, and we have already started taking 3 MW green power to this pump for the same. We have also floated another tender for 5 MMTPA per annum for green hydrogen that is under the SIGHT Scheme of the government. Similarly, our newly formed wholly-owned subsidiary, HPCL Renewable & Green Energy Limited, is already working on plants on renewable, on almost around 250 - 300 MW capacity at various places. We have also signed an MOU with MAHAGENCO for cooperation and collaboration in the field of green hydrogen and its derivatives. These are primarily the main highlights of HPCL during this quarter. I'm open to taking up any questions on this. Thank you. Thank you very much. We will now begin the question and answer session. Anyone who wish to ask a question may press star and one on their touchtone telephone. If you wish to remove yourself from the question queue, you may press star and two. Participants are requested to use handset while asking a question. Ladies and gentlemen, we will wait for a moment while the question queue assembles. The first question is from the line of Probal Sen from ICICI Securities. Please go ahead. Yeah, thank you for the opportunity, sir. I had a couple of questions. The first was with respect to this LPG underrecovery. Just to, sir, understand, this INR 2,000-odd crore is loss that is actually sitting in our P&L. When you say that you are building it in a negative buffer, can you just make us understand a little bit on the accounting of this? Is the loss actually there in the marketing segment, reported numbers, or is it, not part of it? I'm not very clear on that. It is part of the reported number. The loss has been considered in our books. If it is a positive buffer, we create a table, and we don't take it in our revenue- Mm-hmm. not take it as a part of the income. But however, if it is a negative buffer, it goes as a part of our P&L balance. So, sir, is it reasonable to assume that this kind of a runway will continue, given that not much has happened in terms of the compensated projects? Should we be building in INR 2,000 crore every quarter now, as of this point? No, I don't think that would be the right way of looking at it. Okay. Right now, yes, that during this period, the LPG prices were higher. Mm-hmm. So that's the reason why the underrecovery was there. And going forward, we'll have to see how the LPG prices behave. But anyway, if the underrecoveries are going to be there, we'll definitely have taken up with the government for necessary support on this aspect. Understood, sir. The second question was, sir, we thankfully, you know, appreciate that you mentioned the inventory loss number of INR 1,400 crore. Just wanted to understand, is it possible to split it between what was there in refining and what was there in marketing segment out of this? Approximately INR 750 crore was in marketing and INR 650 crore in refining. INR 650 crore was the refining, and around INR 750 crore was in marketing. Right. So just on lastly, you know, and I'll come back, but one more question. With respect to refining, so against the last year number, where Singapore was at 10, but we reported about $13 because of various factors, diesel switching higher, perhaps Russian crude was a factor. Versus that, in this quarter, we have actually now gone down to a discount versus the benchmark GRMs. Is it possible to sort of, you know, get a sense of why this has happened? Is it mostly because Visakh performance is impacted by the key commissioning activities and inventory, or, you know, is there any other reason for it? Just if you can give us a sense here. Yeah. Primarily, if you see in the same period in the corresponding previous year, instead of the loss of INR 645.50 crore. We had an inventory gain last year of INR 900+ crore. So virtually, that INR 1,500 crore is the difference on account of inventory. Right. Right. And we are still getting around 35%-40% from Russia, sir, in terms of our crude sales? Yeah, yeah. Okay. I have more questions, sir, but I believe I'll come back in the queue. Thank you, sir. Thank you so much for your time. Thanks. Thank you. The next question is from the line of Amit Murarka from Axis Capital. Please go ahead. Yeah, yeah. Thanks for the opportunity. So, I also see your net debt has gone up quite sharply in this quarter. So could you help understand what are the factors behind that? Yeah. See, the debt has primarily gone up. One is the subsidy which we have to receive almost INR 1,700 crore from the government, that there is an increase there. Secondly, the inventory. Now, with Visakh Refinery coming into almost full level production, we, where if you see during this quarter, we have almost purchased around 3.8 million metric tons of product. We had to hold higher inventory for crude as well as a higher inventory for the product. One more reason is that during this period, we had an inventory of almost additional inventory of almost INR 2,000 crore, because during this period, in the month of August and September, there were rains, and on account of which the demand was also muted. But this resulted in some increase in inventory in our ports of the product. So primarily, around INR 2,000 crore-INR 3,000 crore has gone up because of the inventory cost and around INR 1,500 crore-INR 2,000 crore is on account of amount receivable from government. Understood. Also, what is the CapEx plan for this year now? The CapEx will be going around INR 13,000 crore, INR 12,000 crore-INR 13,000 crore. Out of that, we have already done INR 7,500 crore. Sorry, how much have you done? INR 7,000 crore? INR 7,178 crore, sorry. Six point. Okay. Sorry, INR 6,588 crore. INR 6165.88 crore. Okay, so you're almost at the halfway mark. And also for the Rajasthan Refinery, has there not been much progress in this quarter? Because in last quarter, I think you had mentioned similar numbers on completion, 92% for refining and 80% for overall. No, no. Refining now, I think it is 94%. Yeah, 92%. So towards the end, since we are going to our pre-commissioning and commissioning, the percentage will not be same. But in actual, progress towards commissioning, it will be very close. And commissioning you think is Q4, and Petchem will be what, one year after that? It may be after six months after that. Okay, and could you also share HMEL performance for the quarter? You want the quarter number or the half year number? Whichever is fine. During the half year, they had processed around 6.54 million metric tons of crude. Their GRM was around $9 a barrel. And during the six-month period, they had a loss of around INR 300 crore. INR 300 crore, a nd EBITDA? EBITDA is around INR 2,000 crore. Sorry, how much? INR 2,000 crore, around INR 2,000 crore. Okay. Okay, that's all from my end. Thank you. Thank you. The next question is from the line of Sabri Hazarika from Emkay Global. Please go ahead. Yeah, good afternoon, sir. So, first question is on this Vizag. I think, so you are basically in the process of commissioning the residue upgradation at the moment, and by Q4 you are saying the entire VRMP will be ready, right? Right, yeah. In terms of volumes, you've already seen the upside, but the GRMs, you will $2-$3 of incremental GRM, which you have been suggesting, so that you can assume from FY 2026 onwards. Is that right? Yeah, that is right. Okay, sir. And is it like fully, I mean, in the books of accounts, is there any more capitalization left, or we have like mostly capitalized this INR 27,000 crore-INR 28,000 crore of CapEx? No, for Visakh, around INR 11,000 crore is yet to be capitalized. That will get capitalized in the last one. INR 11,000 crore of additional CWIP will basically get spent in Q4. Yeah. Okay, sir. sir. Okay. Secondly, so, right now, I mean, just to get a sense of your overall marketing numbers. So, I think September result, as you can see there is a change in%, so I think the margins are quite high. At the same time, LPG losses have further increased because with winters, I think the prices of Arab Gulf LPG has also gone up. So, if I look from a working capital point of view, not assuming, I mean, assuming that some possibly may come later down the line, but in terms of debt and working capital, are you in a comfortable position right now, or can you see short-term debt going up further in the incoming quarter? No, no, the debt is not going to go up. So right now, because of high operational margins, you are able to like, meet up whatever losses are there in LPG, is that right? Yes. Okay, okay. Welcome. So myself, just a small follow-up. You said last year the inventory gain was around INR 950 crore in refining. Last year, Q2, right? Yes. And this time, INR 900 crore? I said around INR 900 crore, I said. Around INR 900 crore, and this time it is around INR 650 crore less than. Okay. Thank you so much. Thank you. The next question is from the line of Sumeet Rohra from Smartsun. Please go ahead. Yeah, hi, sir. Very good afternoon to you. Sir, firstly, I mean, you know, I would like to understand, because, you know, numbers are crowded, so many inventory movement along with LPG, et cetera. So sir, your reported number is INR 650 crore, and we've absorbed INR 20 crore of LPG losses and inventory loss of INR 1,400 crore. Am I right? Yes, yes. So effectively, I mean, if I understand correctly, sir, that means if you add this back, we would technically be at somewhere around INR 3,500 crore. Yeah, that would be the normalized profit. You are right. Okay. And sir, now for the, okay, if I see that, you know, the first quarter again, you were weighed down because of these concerns of LPG. So effectively, where I'm trying to understand, sir, because see, you know, the matter of fact is that, you know, anyway, investors are quite shaken up because of the result, which is reported on the headline number. So if you can read through the numbers on the core performance of the company, is my understanding correct that, you know, we are on, like, we have done about INR 5,500 crore of PAT in the first half. So effectively, what I'm trying to get at is that our core profitability has actually now substantially gone up, from the past because of the projects and because the volume throughput coming. Is that correct, sir? You're right. You're right. It's exactly- So, my understanding... Yes. The core profitability will almost get doubled than what we used to do earlier. That was before we- So effect- It more than double. Okay. Sir, so sorry, effectively, I mean, if I can put it in simple terms, is that our core profit should be about INR 5,000 crore- INR 5,500 crore for the first half, which means that without the residue upgrading project, we have actually come to this level, which means that with the residue upgrading of Visakh kicking in at 2026, our profitability can be substantially in the five figure mark? Yeah, you are right. Okay. And sir, my next question, sir, is on the lubricating part. Yes. With the current trend of the crude, if you see primarily now it is ranging between $72 and $78. Right. Now, if the current level and the crude remains range bound, then that profitability which we are referring to is likely to mature in the next quarter. Okay, understandable, sir. Okay, sir, coming to my next question, sir, is on the value unlocking part of the lubricant. So if you can please help understand, effectively, because, you know, the thing is that today, you know, our market cap of around INR 1,000 crore or sub- 80,000 crore because of the market crash today, I don't know exactly what it is, but somewhere around there. You know, it clearly, I mean, it's not reflecting it from an investor angle, right? Because, I mean, on one side, you've got Barmer Refinery, on the other side, you've got Visakh, on third side, you know, you've got lubricant, which is the biggest, which is a 40% market share. So sir, if you can help understand in the lubricant part, where exactly are we today in terms of the demerger and value unlocking? We will need... Since I'll be carving out the lubricant business, it would. I'll have to... There's going to be a change as regards the, because I'll be forming another company out of the existing company. So we need the approval from the Government of India for the same. We have already taken up with the Government of India, on, as regards the merger is concerned. So that approval, we are waiting, because that would need an approval from the Ministry of Finance, from DIPAM and NITI Aayog also. So we are waiting for their approval to come. Understood, sir. Thank you very much. Sir, just one last thing before I end. Sir, I mean, you know, we have a presentation, you know, which we have given to the exchanges, I think sometime back, you know, in which we are talking about INR 40,000 crore EBITDA, you know, which is basically once the projects are commissioned. So we actually think that that could be beaten because of the quality of the projects of what we have now? Yeah, yeah, we stand by what presentation we have put. There is no doubt about it. Okay. Okay, sure, sir. Thank you, sir, and wish you a very happy Diwali, and to you and your entire team, sir. Thank you. Thank you. Thank you. Thank you. The next question is from the line of Kirtan Mehta from BOB Capital Markets. Please go ahead. Sir, couple of clarification on the Vizag expansion. In terms of the expansion in the current environment, okay, how much profitability or EBITDA is added because of the expansion? Will you be able to give us some color? And second part was for the RUF unit, if this environment continues, so what could be the margin upgradation instead of $2-$3 per barrel? Could you also provide some color under the current environment? See, if I take the mid-cycle GRM and calculate, the expansion of refinery from 8.33 million tons to 15 million tons and bottoms upgradation to RUF, that was to add almost INR 4,500 crore to the profitability of Visakh. Now, out of that, around INR 2,000 crore-INR 2,500 crore is because of the capacity expansion. The balance is on account of the bottom upgradation. Understood, sir. Second question was about the Bathinda. Could you also share the current petrochemical utilization and its contribution at the gross margin level? They are operating today at more than 90%. That's what I can say as regards the operation of the plant is concerned. What exactly you wanted of Bathinda? Contribution at the gross margin level, petrochemical contribution at gross margin or EBITDA level. I don't have it right now. We'll share it separately. Sure. And the last question was about the Chhara LNG terminal. When do we expect it to start operating? This, before this financial year. What is the current bottleneck, which we need to resolve to operate it? No, right now, we'll shortly be coming in the market to book the commissioning cargo. Last time in April, we had brought a cargo, but we could not commission because the sea conditions became rough and all. After that, the monsoon season has started. So effective October only, we in the fair weather season, we will, you know, bring the cargo. So that cargo will be bringing it in December or January, and then commission this. Otherwise, we have got all the port approvals, the jetty and all. Everything is in place, there is no issue. Only thing is, we'll have to bring the cargo and commission this. What could be the utilization over first couple of years in terms of the million ton throughput? We had said previously that our own demand could be of the order of 2 million tons also. Correct. So we for HPCL, our Mumbai Refinery, going forward, even HMEL and our Rajasthan refinery, so gas will be moving from there only. Because from Chhara, we are connected to the national grid, it will go from there itself to all the places. The moment Visakh is connected through pipeline, right now, that Srikakulam-Visakhapatnam pipeline is half made and yet to be completed. The moment that also gets completed, even Visakh can be given some, so that can go from here. So if I see my in-house consumption itself is more than 1.5-1.7 million metric ton amongst these three units. Plus, I have my own GAs where I can sell, plus now LNG trucking terminal is picking up gradually. So we are already set up for LNG outlets. We have plans to scale up that facility also. A lot of new demand is coming up on an LNG trucking also. We see there's a lot of potential as regards LNG is concerned, and definitely, the capacity utilization will also keep on improving as we go ahead. Thank you, sir, for this clarification. I'll get back in the queue. Thank you. Thank you. The next question is from the line of S. Ramesh from Nirmal Bang Equities. Please go ahead. Thank you, and good evening. So in refining, what do you expect to change that will, you know, get the industry going back to normal GRMs? Do you see capacity closures, or are you waiting for a demand for petrol and diesel to improve over time? What are the variables you would expect to change that will see some visible improvement in GRMs going forward? Compared to the August and September, we are already seeing an uptick as regards the GRM performance. The Singapore GRM, if I use the benchmark Singapore GRM, they had gone down to $3.2 a barrel. Today's morning number, if you see, it has already reached $4.7 a barrel. Now, with I'm sure with winter season picking up and all, China demand and all, those are the factors which will scale it up. The GRMs are likely to improve only. Yeah, so I understand the short-term movement. What I am trying to get at in terms of the structural, you know, outlook for refining as a business, because there's a lot of excess capacity, there is a weak demand, so in terms of, you know, demand and supply, do you see supply, reduction or capacity closures, happening in the next one, two years, which will give some, you know, structural improvement in the outlook for GRMs? Yeah, yeah, that would continue to happen. Even now it is happening, whereby few of the inefficient refineries, they close down. And, like, but fortunately for us, we have recently revamped our own refineries, or the Rajasthan refinery, which is coming up, is going to be a new refinery, most energy efficient refineries and all. So all those people who have old refineries or inefficient refineries, definitely there is a case for them to shut down, and for us, it becomes an opportunity in that way. Okay. Now, on the City Gas distribution business and LNG, can you share some numbers in terms of, when you see the commercial contribution from your standalone GAs in your P&L, and what is the kind of volume and, say, top line and EBITDA we can look at per cubic meter or whatever you can share, say, over the next two years in CGD? See, even today, we are doing around 0.4-0.5 million metric ton of natural gas and LNG. We even today doing that. And the same, once our terminal is commissioned, we will start bringing our own LNG cargos, and we have planned to scale it up to 2.5 million in the next two years. Yeah, based on LNG. On the City Gas distribution volume, can you give some color in terms of the progress on the network expansion, the CapEx and the volumes you expect to do? And some, you know, indicator in terms of how much it can add to your profitability on a standalone basis. Yeah. Every year we are doing a CapEx of around almost INR 1,800 crore-INR 2,000+ crore in the CGD space. And we have already the network which we have put almost 100-odd, more than 100 and 130-odd CNG stations in where we have our own, in our own GAs, we have already started getting the revenue from them. While they are they are not huge numbers, but they have already started contributing to our bottom line. So just, one last thought on that. So if you take a three to five-year view, once, you know, you have a significant number of CGD GAs, what is the internal business plan, you know, throwing up in terms of volumes and revenue and EBITDA, you know, to get an estimate? EBITDA, we aim around INR 1,000 crore from this business- More far-- Next five years. Okay, thanks a lot, and wish you a Happy Diwali. Thank you very much. Thank you. Thank you. Thank you. The next question is from the line of Mayank Maheshwari from Morgan Stanley. Please go ahead. Thank you for the call, sir. The first question was more on the operational side. In terms of the Vizag, I think it got pushed about by a quarter or so in terms of the startup. Do you see any other challenges in terms of further ramp up on the Vizag side, or you think you'll be able to kind of deliver full volumes on the upgrade, by the June quarter fully? So Vizag, if you see in the latest quarter, we have already done 3.8 million metric ton, which is equivalent to the additional capacity what we have installed. So the full volume is already realized, and with the completion of bottoms upgradation, even the value realization will be there. So bottoms upgradation, we should be able to kind of see the full impact by March quarter, or it more looks like a June quarter thing? It should happen in the March quarter only. Okay, and so the second thing was in terms of the Rajasthan refinery. What would be the net debt sitting on the books at Rajasthan right now? It would be around INR 35,000 crore-INR 37,000 crore. Okay, got it. And so the last thing was more related to the marketing side of the business. You have obviously done very well. I think you have kind of got some market share on the diesel side. Like, can you just kind of tell us about how you are doing some of these market share gains? And is there more scope for you to kind of grow market share in some of these spaces? Yeah, that's always our resolve, to gain more market share. And, if you see consistently past four quarters, we have been gaining in terms of market share as well. Not only in the MS and HSD space, but also in our direct sales and the lubricant space also. Even LPG and ATF, if you see, we are having good volumes and we share the market share growth and business line. Sir, just on this marketing point, sir, industrial side, how are you seeing competition? Like, can you give us a bit of a sense subjectively as well, how is competition doing, how margins doing on the industrial side? Industrial has always been quite competitive, both for diesel, bitumen, and all. As regard the competition is concerned, yes, in the industrial side, we have a market share of around 13% in that space. IOC is the major one, around almost 70%. So that give us an opportunity to increase our market share there. So that is one area where we are focusing, as to how we can increase our penetration into bitumen, then HSD, as well as the specialty products of Hexane, MTO, and others. Okay, sir. Perfect. Clear. Thank you. Thank you. The next question is from the line of Puneet Gulati from HSBC. Please go ahead. Yeah, thank you so much. And my first question is on, you know, what is the LPG price that you need to reach zero underrecovery? It should be more, increased by almost INR 200 per cylinder. INR 200 per cylinder. In terms of Russian crude, what is the discount you are enjoying currently? It varies every month. Yeah, on average, for example, last quarter. Pardon? Last quarter, what would it have been on an average, or a range, if you can give? It's around 170-180 rupees. Sorry? Around INR 170-INR 180 per cylinder. No, no. On the Russian crude, I'm asking. The discount on Russian. The discount has come down significantly, but it's still cheaper than the other two, so yeah. Any range that you can share in terms of discount, dollar per barrel? No, no, I cannot. Okay. And you talked about INR 4,500 crore as incremental profit from Vizag. What is the underlying GRM you assumed for that? Yeah. Around $6-$8 a barrel. $6-$8. It will increase by $2-$3. And that's your GRM, not the Singapore benchmark GRM? Yes, yes. We have worked on our GRM. $6-$8, and then $2 incremental for our refinery upgradation part. Yes. Lastly, if you can talk about any cost escalations you are seeing on the Rajasthan Refinery side and the Vizag project side. Revised cost numbers. The revised number for Rajasthan is INR 73,000 crore, and that is, since it's an EPC contract, most of the... I gave you the number, the total commitment is INR 70,872 crore as on date. Okay, and Vizag? Visakh, INR 30,000 crore is the total project cost. Okay. And no change. Because now you should have a concrete view of this cost, right? Yeah, this is final, right? This is the final cost. Okay, that's great. Thank you so much, and all the best. Thank you. The next question is from the line of Vishnu Kumar from Avendus Spark. Please go ahead. Sir, thanks for your time. On the incremental GRM that you mentioned, so the $6-$8, this is an absolute or like we should consider three plus four, which means, it ranges about $10-$12? No, no. The question there, what was asked is, what is the mid-cycle GRMs you are considering? So there I said, we consider around $6, $6-$8 a barrel. And post RUF, we consider an incremental of $2-$3 a barrel. Got it. Sir, once we have the bottom upgradation completely done, can we increase the Russian intake of crude in Vizag, and is it possible? If possible, how much can we get to? Yeah, already at around 40% we are there. Depending on the opportunity, it can go by more than 10%-15%. On a blend, we already reached 40%, maybe we can go to 50%, is what you're saying? Yeah, right. On Vizag. Right. Understood. Sir, in marketing business, if you could just help us understand what would be the per liter diesel and petrol margin this quarter, and also, if possible, for the last two quarters? I can only give you the entire marketing margins, not product-wise price. Not clear. Okay, sir. Thank you. Thank you. The next question is from the line of Rituparna Ghosh from Argus Media. Please go ahead. Sir, thank you for taking the call. My question is regarding what sort of long-term tenders you are seeing in terms of Chhara LNG terminal? Can you just repeat your question, please? Yes. What sort of long-term LNG contracts are you seeing from Chhara LNG Terminal? And also- Sourcing or. Sourcing, yes, sir. Sourcing. Yeah, we'll be tying up for our requirements, because this terminal is a 5 million metric ton terminal. Like, if I told you that we have a plan to reach 2.5 million metric ton in the next two years, so... And I need to source for contract that much quantity, only then I can do that. So we'll be gradually phasing our procurement plans in line with our business plan to increase the LNG volumes. Okay, sir. Is the line by which you will be closing, the deals, or what sort of response are you getting from the global market in terms of the sourcing? We are already in market as regards long-term sourcing is concerned, and the response has been quite good. Okay. And sir, second question is regarding the building of breakwaters facility at the terminal. How far has the work been reached? Because the LNG terminal, the breakwater, which is required, is around 1,900 m. Now, out of that 1,900 m, 1,050 m have already been done, and the balance also, it has reached four meters below the six-meter water level. Up to that place, it has been done. Now, with the fair weather season starting effective October, the work will shortly start over there for completing the balance part. We are hopeful that, in this fair weather season, the same should be completed. You're hopeful, sorry, sir, you're hopeful to complete the work by this fiscal year? In this fair weather season. Ah, in this fair weather season. And sir, lastly, to confirm what you already mentioned, you will be getting the commissioning cargo, December and January. Correct, sir? Yeah, December or January, we will be getting the cargo. Perfect, sir. Thank you so much. Thank you. The next question is from the line of Shivansh Sood from Desvelado Advisory. Please go ahead. Hello. Hi. Yeah, am I audible? Yes. So, yeah, what... the question was like, with the changing geopolitical dynamics in Russia, so do you think the discount factor you're getting from Russia is going to increase or decrease in the coming near future? See, one thing is there. I don't buy Russian crude just because it is Russian crude. I buy because it makes value in my system. So long as the Russian crude makes value in our system, and it is better than processing other crude, we will be processing the Russian crude. So depending upon how the environment weighs or what is the level of discount and all, the same would be analyzed on a case-to-case basis, and accordingly, the processing will be done. Okay, thank you. Thank you. The next question is from the line of Gagan Dixit from Elara Securities. Please go ahead. Thanks for taking my question, sir. Sir, there's the one month back news that is, your parent company, ONGC, is planning the 12 million ton refinery that in UP, Prayagraj. So is there any possibility that this, HPCL will also be involved in the later stages from it? Because the parent company is... You should ask this question to the parent company, because I, I'm not aware of it. Okay. Yeah, that, that's for me. Thank you. The next question is from the line of S. Ramesh from Nirmal Bang Equities. Please go ahead. Thank you very much for the follow-up. So you have the renewable subsidiary. So just like NTPC is planning to do a float, when do you think you can reach a commercial scale to think of a listing like NTPC? Any thoughts on that? Maybe, maximum two years, we should be reaching that point. Okay, and any numbers you can share in terms of what is the scale, in terms of megawatts of power, some sense in terms of investment? Can you share some numbers for the next two years? Right now, we are doing around 200+ MW of renewable there. We have plans to set up more CBG plants also in under that umbrella. And maybe by end of the year, we may tie up another 200 odd MW, and next two years, we want to be touching around 2.5 GW as regards. What will be the size of the balance sheet or investment over the next two years? It will be around INR 15,000 crore-INR 20,000 crore is what we have anticipated. On the current- The renewables as well as the biofuel leg. Okay. So on MRPL, there has been a lot of back and forth on the merger proposal. Given the kind of challenges pure refiners are facing, do you think you will again take that issue? Is there any progress likely on the MRPL merger? Currently, there is no such discussion. As and when it comes, we'll definitely review and proceed further. Okay. Thank you very much. Thank you. The next question is from the line of Vimal Sampat, an individual investor. Please go ahead. Yeah, good evening. My question is pertaining to this lubricant business. By when do you think we will be able to demerge? The moment we get the approval, it may take another six to eight months after that for the entire process to complete. Okay. And, now, yeah, we are planning to manufacture some products for Chevron. Can you please give some more clarity on that? We are already manufacturing the same in our plants. Okay, so is this a kind of technical tie-up or only job work we are doing? What is it? It is both. Okay. And then we will marketing jointly, or they will do it in their name only or how, or through our network we will do it? They are directly marketing, but they can use our network also, yeah. Okay. And, second thing now, in next two, three years, with our lubricant business and, green business, all will be de-merged. So I mean, and, our refineries also, we have joint ventures, so we will be a very large conglomerate. Yeah. I mean, what? How are you looking at it? I mean, looking at. HPRGE is already a separate company. It is not de-merged. It is already a separate company. Okay. Then we have the gas, HP LNG, that is a separate company. Okay. Right now we are talking about lubricants only. Only lubricants. And this, because gas also will be very significant contributor to us. Yes. So in future you may de-merge gas also? Gas is a separate company. Okay, gas is totally. LNG terminal is a separate company. No, I'm talking about this CGD and this biogas. What CBG, what you are going to do? We will evaluate that as and when it's once GST and all is implemented. We will see at that point. Okay. That's all. Thank you. Thank you. The next question is from the line of Umar Farooq from CRISIL. Please go ahead. Hello. So, thanks for the opening of the question. So, the question is regarding, as we have seen a drop in crude oil prices, so what are we expecting for the upcoming quarter to be like in regards with the marketing margins? If you can shed some light on that. Can you just repeat the question, please, a bit louder? With the crude oil prices declining, and if you expect crude oil prices to remain, as you have said, up to around $72-$78 per barrel, what are we expecting for quarter three of this fiscal regarding the marketing margins? See that we gave you a number, no, on the normative, in case we get our normative margins and all, the numbers where we'll be. In the initial questions, we had covered that. Okay. And in case the prices of the crude are going to be around the level at which they are, the-- in such a case, there will be no incident of any inventory loss or gain. Understood. So, my second question would be as we, the center has been, you know, pushing so much on ethanol blending to reach 20% by either 2025, 2026. The ethanol production capacity has also increased to 1,623 liters, as Chini Mandi has recently reported. So, by when can we expect ethanol blending to, you know, reach 20% targeted blending? Is it possible that we achieve it by next fiscal, or do we have to wait further? No, even today, the ethanol blending is almost 15.9%, which is being done. What has been said is, by 2025-2026, the Ethanol Supply Year, ESY, the 20% target is to be achieved, and it will be done by that time. Today, there is no problem as regard availability of ethanol in this country. Gradually, this percentage, you will see that it will keep on increasing, and the target of 20% in ESY 2025-26 will be achieved. Okay. So, I had this issue, question because very recently, ethanol producers have complained, have raised issues as oil firms are not procuring enough ethanol. So that was leading to excess supply in the market. So was there any problem or are we going to have any issues in regards to procuring ethanol? Maybe if you procure more from producers, that 15% what we are at now could be 16% or 17%, if, if- Yeah, the more- But- If the availability is higher, we'll go for higher percentage. Okay. Thanks. That's all for me, and I wish everyone a happy Diwali. Thank you. Thank you. you. The next question is from the line of Neil, an individual investor. Please go ahead. Hi. Hello. Hi, sir, thank you for the opportunity. My question was, the $6-$8 GRM that you mentioned, mid-cycle GRM, so is this for the company or is this in reference to the Singapore GRM? Company. Okay. And this leads to... You are saying that, at this level, it leads to a PAT addition of INR 4,500 crore in Visakh for 15 million metric tons of capacity, right? I referred with respect to the pre-expansion and the mid-pre investment period. So this is an addition of the total? This is not addition. This is before, when the refinery was at 8.33, by doing all these investments, it would have resulted in an increase of INR 4,500 crore. That's- Right. Right. And my second question is, regarding HRRL. So, in the presentation, we had mentioned a $20 mid-cycle blended GRM. So is that still valid or like what do you expect the blended GRM to be for HRRL? See, those are the numbers at which the financial appraisals have been done. Right. If you calculate it today, maybe the number would be different, but these numbers will keep on changing. This project, which is coming up, is going to come up for next 20-25 years. So things will keep on chanTging over a period of time. At a particular moment of time, you will say you will see that sometimes it will be better or sometimes it will be, it will be less. But over a period of time, this is the number which the refinery would be realized. If you take a case, last year there was a period when the GRMs used to be in double digits. It used to be 13-14 on MS HSD processing only. But today, the GRMs are lower. So these things, these cycles will keep on coming and going, but when you evaluate a project, you evaluate considering a particular level or particular period, what the GRMs are likely to be. So the numbers which we have said we have considered for HRRL is the number which you are referring to. Right. So for INR 8,000 crore EBITDA, we would require something like, what, $12 per, $12 GRM from HRRL? I don't have the numbers right now, but I will share it separately. Sure. Thank you. Thank you for the opportunity. Thank you. Thank you. As there are no further questions, I would now like to hand the conference over to Mr. Varatharajan Sivasankaran for closing comments. Thank you, Nikita. Sir, if you have any closing comments to make, please. No. As we have already said what we thought was the relevant in this. As this quarter is concerned, would only take this opportunity on my personal behalf and on behalf of our Director of Refineries, Mr. Vinod, and all our HPCL staff and employees, we wish each and every participant a very happy Diwali, and to them as well as to you, Varatha, and all the best to you all. Thank you. Thanks a lot, sir. I wish to thank all the participants and the management for taking time out and discussing this in great detail. Wish you all a happy Diwali. Have a nice day. On behalf of Antique Stock Broking, that concludes this conference. Thank you for joining us, and you may now disconnect your lines.