Ladies and gentlemen, good day and welcome to the Hindustan Petroleum Corporation Limited Q3 FY 2025 Results Conference Call, hosted by Antique Stock Broking Limited. As a reminder, all participants' 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 phone. Please note that this conference is being recorded. I now hand the conference over to Mr. Varatharajan Sivasankaran from Antique Stock Broking Limited. Thank you, and over to you, sir. Thank you, Sejal. A very good morning to all the participants and the management of HPCL. We have with us Mr. Rajneesh Narang, Director (Finance) and holding additional charge of CMD; Mr. S. Bharathan, Director (Refineries); and Mr. K. Vinod, Executive Director, Corporate Finance and CFO. Once again, extending a very warm welcome to all the participants and the management, I would like to hand over the floor to the HPCL management for the opening remarks. Good morning, everyone. I'm Rajneesh Narang, Director of Finance with Additional Charges CMD HPCL. Yesterday, we had our board meeting for the quarter three. It's a matter of pride for us to say that we had an exceptional Q3 quarter. Now, during this quarter, we had a profit after tax of INR 3,023 crores, versus INR 29 crores in the Q3 of financial year 2024. The improved performance is attributable to the robust physical performance and operational efficiencies in both our refinery and the marketing division, coupled with the improved margins which we had. The total income, the standalone revenue from operations, is INR 118,936 crores, versus INR 118,443 crores during the third quarter of financial year 2024. Average GRM during the third quarter was $6.01 per barrel, versus $8.49 per barrel during the third quarter of the previous financial year. Now, during this period, the Singapore GRMs were around $5 a barrel. And since Singapore GRMs do not factor in the fuel and loss and the inventory losses and gains, if I consider that aspect, the core GRM for the HPCL is $6.89 per barrel, versus the $5 of Singapore. During this period, HPCL refineries recorded its highest-ever crude throughput of 18.53 million metric tons, operating at 106% of the installed capacity. So virtually, if you see, there is an increase of 12.4% over the throughput of 16.49 million metric tons in the corresponding previous year. If we see the Q3 performance of the refineries, the crude throughput was 6.47 million metric tons, operating at 111% of the installed capacity, resulting in an increase of 21.2% over the throughput of 5.34 million metric tons during the third quarter of financial year 2024. Now, if we see today, effective January, so we have started operating the Visakh refinery at the full capacity of 15 million metric tons. Now, during this period, April-December, HPCL recorded the highest-ever sales volume of 37.12 million metric tons, registering a growth of 7.6% as against 34.49 million metric tons during the corresponding previous year. In terms of our quarterly sales volume, it is 12.87 million metric tons, registering a growth of 8.2% as against 11.9 million metric tons in the corresponding quarter of last year. If we see the performance of HPCL on the domestic front, the sales volume growth was 8.2% during the quarter as against the industry growth of 6.3%. So we have been consistently growing above the industry. And the growth is 6.5% during April-December 2024 as against industry growth of 4.8%. In fact, HPCL has recorded a market share gain of 0.36% during the third quarter of financial year 2024. Now, if we see the growth in terms of the motor fuels, that is MS and HSD, in the third quarter, we sold 7.85 million metric tons, a growth of 6.3% over the corresponding quarter. And in case of LPG, the company achieved a sales volume of 2.31 million metric tons, again a growth of 4.9%. The industrial products, that is the direct sales where we sell the product to our industrial customers and all, the sales volume was 1.25 million metric tons during the quarter, a growth of almost 25% over the corresponding period last year. Aviation continues to show robust performance with a growth of 26% over the third quarter of financial 2024. The sales volume of 285 TMT during this quarter. We expect that in the ATF in this current financial year, we'll be crossing the one million metric ton mark for the first. The HPCL Lubricant segment, again, sales volume was 178 TMT, a growth of 11.5% over the corresponding quarter. To ensure that the product is made available at all our selling points and the locations, the pipeline's throughput has also been maximized to 6.93 million metric tons, a growth of 3.3% over the last year. In terms of our CapEx expenditures during this third quarter, we have spent almost INR 2,900 crores. Cumulatively, for the period April to December, around INR 9,500 crores have been spent. In the month of January, we have commissioned our 5 million metric ton LNG regasification plant when the cargo was downloaded. It was downloaded at the tanks over there, and the commercial operations will shortly be started. Now this unit is being operated under our wholly owned subsidiary, HPCL LNG Limited. We had, in this quarter, the previous quarter, that is in the Q3, taken the board approval for a new project for Mumbai Refinery, that is the lube modernization and the bottoms upgradation project. The estimated cost is almost around INR 4,700 crores, and the project is scheduled to be completed by March 28. The project would enhance the base oil production of the refinery from 475 KTPA to 765 KTPA, with production of superior-grade base oils of Group II and Group III. In addition, it will also increase the capacity of bitumen by approximately 487 KTPA per annum, with upgradation of fuel oil to bitumen. Currently, the fuel oil is getting exported, and as such, we do not get a better realization. But with this conversion to bitumen, we'll be able to realize better, and as such, this will result in not only the improvement of distillate yield for the Mumbai Refinery, but would also add good margins to the refinery. During this third quarter, Mumbai Refinery commissioned the VGO Hydrotreating and DHT. This will increase the MS production by almost 100 TMT per annum. As regards our nine million metric ton grassroots refinery in Barmer, the same is progressing in full swing. As on 31st December 2024, the total commitments on the project are INR 71,814 crores, and the actual capital expenditure, which has been done, is approximately INR 53,000 crores. The refinery and petrochemical complex is expected to be progressively commissioned during the current calendar year. We would first be commissioning the refinery unit, and we are targeting that by March 25, we'll be doing the mechanical completion. After the next quarter, the unit would be commissioned. Followed with that, the petrochem unit would be commissioned. As regards our 3.55 million metric tonnes per annum residue upgradation unit at Visakh Refinery, the mechanical completion, the same, the unit has been mechanically completed, and currently, pre-commissioning activities are underway. The OISD and PESO approvals will be coming, and thereafter, the hydrocarbon would be taken. In fact, OISD will be visiting the facility in the next week. This is the first unit in the world using LC-MAX technology, which will enable highest conversion of bottoms, thereby significantly improving the GRMs for the refinery on the full capacity. Although this capacity of this unit is 3.55 MMTA per annum, we'll be able to get a better distillate yield on the entire 15 million metric tonnes capacity of the refinery. As such, there would be significant margin accretion to HPCL on account of the commissioning of this facility. During this quarter, we commissioned around 450 retail outlets, taking the total number of outlets to 22,953. The company also commissioned six LPG distributorships, taking the total number to 6,370. We also commenced PNG sales in our CGDs in Darjeeling, Jalpaiguri, and Uttar Dinajpur GAs, and commercial PNG sales in Shahjahanpur, Badaun GA. Thus strengthening our presence in the eastern part of the country. During the quarter, the HP Green R&D Center entered into an MOU with EIL as an exclusive technology and engineering partner for engineering, marketing, and commercialization of the HP-PSA technology, which was indigenously developed at our R&D Center. This quarter, the R&D Center has filed 14 patents, taking the total patent filed to 620, out of which 236 patents have been granted till 31st December. As part of our value unlocking initiative being undertaken for the lubricant business, benefits for the rollout of supply chain, cost optimization, product mix spread, and customer engagement initiatives have started accruing. Simultaneously, approval for the carve-out of the business continues to be actively pursued with the appropriate authority. We are already seeking approval from the government for carve-out, and as of date, we are yet to get the approvals. But the moment we get it, it will take another nine months for us to do the carve-out. As regards the non-fuel business of the company and providing value-added services to the customers, we have added three HaPpy Shops, taking the total number of HaPpy Shops nationwide to around 482 numbers. This segment, that is the non-fuel retail business, non-fuel business, is under extreme focus for the company, and we intend to make more investments in this and try to capitalize on the retail space in terms of higher revenue from this segment. During this quarter, Visakh Refinery commissioned the Wet Air Oxidation Unit, which is an advanced low-pressure technology for treatment of spent caustic streams. In addition, environmental benefits would also accrue on account of this. Our wholly owned green subsidiary, HP RGE, has signed MOUs with the Government of Rajasthan for setting up solar and wind hybrid projects. We have sought around 2,000-3,000 acres of land from the government for setting up these new green renewables, so the solar and hybrid projects over there. Similar MOUs have been signed with the Government of Bihar also. Further, as regards the green third-party concerned, we have issued 12 LOIs for CBG plants, taking the total number of active LOIs to 141, with total CBG production capacity to 878 TMT per annum. In terms of the ethanol blending activities, we have done 16.2% during the quarter and blended off approximately 57 crore liters in MS, and we have commissioned additional 50 CNG facilities in this quarter, taking the total number of retail outlets with CNG facilities to 1,850, and in terms of EV charging, we have crossed the 5,000 mark of EV facilities at our outlets, so this is what I wanted to share before I can take up the questions. Now, the forum is open for any questions on our performance. Thank you. Thank you very much. We will now begin the question and answer session. Anyone who wishes to ask a question may press star and one on their touchtone telephone. If you wish to remove yourself from the question queue, you may press star and two. Participants are requested to use handsets while asking 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. Thank you for the opportunity. Good morning. I have three questions. Number one, you mentioned about the refinery part of the Rajasthan Barmer refinery getting completed by March and maybe commissioning by June. In how many months can we expect the petrochemical portion to be commissioned? Petrochem would take maybe by September, we'll be able to do the mechanical completion, followed by that the commissioning would happen. So sir, is it safe to say FY 2027, we should be able to see year one of complete operations of the Barmer refinery? Yes, FY 2026, FY 2027 definitely. But we are hoping that December 2025, we'll be able to commission. So the first quarter, maybe some stabilization issues would be there, but definitely FY 2026, FY 2027 would give the full benefit. Right. Got it. So the second question was, in this quarter, how much of our crude came from Russia for discount? And what is our contract situation with respect to Q4? Have we tied up some volumes for January and February? Or it's completely open as of now? So how are we looking to mitigate the disruption to whatever extent it happens of Russian crude? We are, on a monthly basis, consuming almost 35%-40% of Russian crude. We have already tied up for the same rather, our entire crude requirement up to March has already been tied up. That includes some cargoes from Russian crude also. I don't consider this as a disruption because it's not that perennially we have been only using Russian crude. Prior to that also, we were running, operating the refineries. Only thing is that the Russian crude, after the discount had come, it was adding more value to process the same. So we were using it. So enough of crude is available. There is no dearth as regards the crude availability is concerned. With the commissioning of our Visakh Refinery, with the RUF and all coming in, the capability to process the heavier crude will further increase. Rather, we can expand the basket of crude. Today also, we are getting the crude from almost 40 odd countries. So, there's no issue as regards the availability of crude is concerned. Crude is sufficiently available, both heavy crude as well as the other crude, and we don't foresee any disruption as regards the crude procurement. I understand. My point was more about disruption. What I meant was that obviously on the cost side, it would have an implication whether small and big something remains to be seen, but that discount will obviously not be there, so that was my question. I understood your point, so I think it is too premature to say that the Russian crude will not come at all. Yes, with these decisions, the U.S. sanctions and all, the immediate reaction is that the crude may not come and all, but we'll have to wait and see as to how the market unfolds, how the supply chain on this front happens. And accordingly, then maybe it would be better to conclude rather than jump to a conclusion that the Russian crude will not come at all. Let us wait and see as to how things unfold. Sure. One last question, if I may, with respect to the LNG terminal at Shahjahanpur, of course, our internal requirements might be there, which we will use this terminal. But other than that, have we signed any long-term offtake contract from this terminal? We are progressing as regards signing of the long-term contract is concerned. It will maybe concluded in the very near future. Yes, till the time we don't tie it up, we'll be getting the cargo on a spot basis and meet the requirement. And maybe we may pool it with our domestic gas and try to sell it in the market. Already, there are some potential parties who have already approached us for the capacity booking. So this terminal is going to be a tolling model. So whether we bring our own cargo or anyone else can bring and also store it over there. So this is going to operate on a tolling basis. In terms of our requirement, we will be sourcing for HPCL own captive use, plus for Rajasthan Refinery, and also for HMEL. So if I look at it, maybe in the near future, we may have our own captive requirement of 1.5-1.75 million metric tons, plus the opportunities in the market. Understood, sir. That's extremely helpful. I'll come back if I have more questions. Thank you very much. All the best. Thank you. The next question is from the line of Yogesh Patil from Dolat Capital. Please go ahead. Thanks for taking my question, sir. Sir, your debt is declined by INR 12,000 crore approximately compared to the second quarter FY 2025. What was the major cash flow which helped you to repay the debt? Is there any adjustment? There's no adjustment. It is better operational performance, which is getting reflected in the results also. And one area is just, yes, around INR 2,000 crore it has come down because the oil bonds had matured. So that was used for liquidating the loan. Okay. And sir, pertaining to the same, in the last quarter guidance for the Visakh Refinery unit, you said that INR 11,000 crore is yet to be capitalize, which is expected in fourth quarter FY25. Post-commissioning of this Visakh at your facility, will you consider it, and will it increase the debt again? Is that a correct understanding? No, no, no. It will see. Just amount, when I said we'll be capitalizing, means that amount has already been incurred. Now, as regards the total capital expenditure is concerned, more than 97% or 98% of the expenditure in the Visakh Refinery has already been done. It's only when we say capitalize, means we'll be transferring it from work in progress to the asset. Okay. And sir, is there any oil product inventory losses during the quarter? Could you please share the number with us? And how many days of oil product inventory generally you maintain? See, if you see during the period, in Q2, the Brent Crude was averaged around $80 a barrel, whereas in the Q3, the average crude was around $75 a barrel. Now, if you look at it, the prices had softened on account of which we had inventory losses. During this quarter, in refinery, we had an inventory loss of INR 355 crores. In marketing, around INR 460 crores was the inventory loss. Cumulatively, for the period April-December, in refinery, it is INR 1,100 crores. In case of marketing, it is INR 1,450 crores. What was the amount for quarter three in case of the marketing segment inventory loss? INR 460 crores. Thanks. Thanks a lot, sir. In terms of number of days of inventory, the crude, we have around 15 to 20 days of inventory. In case of finished goods, it is around 25 to 30 days. Thanks a lot, sir. It was really helpful. Thank you. The next question is from the line of Sabri Hazarika from Emkay Global Financial Services. Please go ahead. Yeah. Good morning, sir. A few questions. Firstly, so now, what kind of GRMs are you targeting for next year on the standalone business, Mumbai and Visakh combined? See, if you look at the forwards of Singapore up to July and all, the GRMs are likely to be in the range of $5-$6 a barrel. So normally, we make higher than the Singapore GRMs. So that trend would continue. And with commissioning of the Residue Upgradation Unit at Visakh Refinery, we'll be adding $2-$3 per barrel more at the Visakh Refinery. So that will be an incremental revenue. Okay. And second question is on HMEL. So can you share with us the profitability figures and the GRM for Q3 in particular? I saw the nine-month GRM in the presentation, but for Q3, how much it would be? Q3 is around $9 a barrel over there, GRM. So this includes the petchem part also or it's just? No, no. This is the refinery part. And what was the profitability for Q3? There was a loss as regards the integrated operation is concerned. The loss was INR 709 crore. INR 709 crore for the quarter. Yeah, INR 700 crores is the loss. Primarily, the loss is in the petchem part. And when do you expect any sort of turnaround or profitability on this as a combined unit? No. See, in fact, the polymer prices are subdued. We hope that there will be a reverse trend on the same. And the moment that happens, maybe it will start operating or it should start reflecting in the result. The refining part is absolutely no issue. Only the petchem, because of the subdued prices, is what is hitting the. So it's operating normally as a whole. You were just saying it's because of the polymer prices, only the losses are there. Yeah. As regards the operating part is concerned, it is operating beyond 90%. All right, sir. And in terms of the EBITDA, EBITDA is positive for the refinery. There is an operating profit, but the interest and depreciation is what is pulling it. And last question. So what is your overall view on LPG subsidy? And are you expecting the same? Have you got anything? I mean, have you pushed for it recently? See, the total under recovery for us on LPG account as on this Q3 quarter is almost INR 7,600 crores, out of which INR 3,100 crores is in the Q3 itself. We have also read in media that the government is likely to consider the same in the budget. Maybe next week, we'll come to know as to how much subsidy is being allocated on that count. And we are hopeful, definitely, the government will consider it, and we'll be able to realize it in this financial year. Okay. Fair enough. Thank you so much and all the best, sir. Thank you. The next question is from the line of S. Ramesh from Nirmal Bang Equities. Please go ahead. Thank you and good morning. So if you look at your refining performance, can you help us understand how you are managing to improve the refining margins in Q2? And how do you see the current spreads? Because if you see the global spreads, they are a little bit weak, and retail margins are under pressure. So how do you see the performance in the current quarter in terms of refining and marketing? See, if you see the margin is concerned, when I in my initial mention, I made a reference that it is not only the margins, better margins, but also the operating performance, which has brought us the incremental margin. Now, if you see both our refineries are operating at Visakh and Mumbai operated at more than 100% of the capacity. Even if you see the fuel and loss has been significantly controlled, the fuel and loss was almost 6%-6.6% in Mumbai refinery, and in case of Visakh, it is 7%. Both the operational availability at these refineries has significantly improved, and this refinery is being run more than the nameplate capacity on account of which we are getting higher yields as well as the products. As regards the GRMs are concerned, the GRMs have been like Singapore GRMs benchmarked. I guess that it is around $5 a barrel. So that same trend is likely to continue in the near future as per the forwards which are available. So we think the same would be continuing. Yes, if you see right now, there has been softening as regards the MS gasoline cracks are concerned in Singapore. But the FO cracks, the negative FO cracks have strengthened. So that is a plus factor. But in the near future, if we look at the next two quarters, the GRMs as were there in the Q3 would continue is what is the prediction. Okay. So now, if you look at the impact of Visakhapatnam commercialization in terms of the interest and depreciation based on the nine-month numbers, what will be the incremental impact of interest and depreciation, say, from next year for HPCL standalone? It will go up by another INR 500-600 crores. Interest and depreciation together? I'm talking interest will remain unless I further reduce the borrowing. And if I continue to make good margins, the borrowings will only come down. So borrowings have already got factored as regards our current level is concerned. Only to the extent of what I'm capitalizing, that would come in the P&L that the total what I've incurred is around INR 2,600 crores in P&L. And around INR 600 crores-INR 700 crores is there in getting capitalized. So that will move to the P&L. So the additional interest impact would be around INR 600 crores-INR 700 crores. And depreciation would be around INR 600 crores. Okay. So when HMEL, can you help us understand the depreciation interest year to date? If you said there is a positive EBITDA and the loss because of that, if you can give some numbers, we'll be grateful. I will share it with you separately, okay? Okay. So if you look at the refining capacity globally, is there any number you can share in terms of how much you expect in terms of capacity closures to the extent that that may help the underlying spreads? What is the sense you get on that? Well, see, in the near term, normally in the month of January, February, there are a lot of planned shutdowns which are taken. So I'm only hoping that the refining margins would only improve because there would be a bit of product shortages during this period. So the margins are likely to improve only. I don't foresee a continued declining trend as regards margins are concerned. And the last thought on the LNG subsidiary, have you started commercial operation in Q2? And is there any expectation of loss in the next one or two quarters before you are able to achieve breakeven? You are talking about which company? HPCL LNG subsidiary. Yeah. Now we'll be starting the commercial operation. So initially, yes, definitely, there would be some losses, but that will be made up once we achieve the capacity utilization. And when would that be? We are hoping maybe in one year or two years, we'll be able to breakeven as regards the operation. So if I may squeeze in one more thought, in CGD, what is your thought in terms of ramping up and achieving EBITDA positive standalone units? We are already EBITDA positive as regards our standalone. In Jind, Sonipat, and all. We are positive as regards our EBITDA mixed units. Okay. Thank you very much and all the best. Thank you. The next question is from the line of Sumeet Rohra from Smartsun Capital Private Limited. Please go ahead. Hi, Sir. Very good morning to the entire team at HPCL. Sorry to interrupt, Sir. Firstly, I would request you to please use your handset. Your voice is not very clear. Yeah, sure. Yeah. Hi, Sir. Firstly, I mean, a very good morning to you and the entire team at HPCL. You have done extremely splendid financial performance in terms of core metrics. So, Sir, actually, I was just looking at it that as you highlighted that the LPG under recovery is about INR 7,600 crore, which effectively is not our domain, which is the government of India. And in spite of that, you've reported INR 4,100 crore. So, Sir, effectively, if I compare year-on-year on the nine months of 31/12/2023, you are exactly at the same metrics, which is INR 11,800 crore, which is, Sir, highly commendable in such a challenging environment. But now, Sir, my question to you is more as an investor. So, Sir, if you see, I mean, adjusting for the LPG, which again is not HPCL's problem, you have done an INR 55 crore EPS. And, Sir, assuming that crude continues to remain where it is and with Mr. Trump now talking about Saudi to lower oil prices, so effectively, Brent would be somewhere around here or maybe lower by $5. So effectively, Sir, your core operations are doing extremely well. And you would probably end the year with a similar number like last year, which is about INR 14,000 crore-INR 15,000 crore, which is commendable. Also, Sir, in terms of IC, your throughput is up by about 12%-12.5%. And your market sales are also up about 9%-10%. Now, Sir, this is in spite of an economy which is challenging, and you see today various sectors are posting degrowth. So it is extremely exciting that you are doing so well in an environment which is as tough as it is. But, Sir, now my question is more from an investor point of view. The thing is that today, in spite of you doing so well, it doesn't deserve the kind of valuation which today HPCL commands, right? Because, I mean, if you end up with a INR 75 crore EPS for the year, I mean, a high-quality stock which has got an ROE of 25% surely does not deserve to be trading at five times multiple, right, in spite of having a lubricant, which is basically three times the size of Castrol. So effectively, Sir, our lubricant itself would be about INR 30,000 crore-INR 35,000 crore on a bare minimum. So, Sir, if some measures could be taken to expedite the value unlocking, that would go a long way in building the value for this glorious entity which you have. Now, Sir, my question to you is basically on the financial metrics, which are as strong as they are. So, Sir, my sense is that the $5 billion EBITDA and the INR 16,000 crore-INR 18,000 crore PAT which you were expecting in FY2028 could actually come as soon as next financial year, right? Because, I mean, I clearly see that your Visakh refinery, which you explained, the residue upgradation project, is also now going to commission very soon. So, Sir, can you explain? So that will basically improve GRMs by $3-$4 on the entire 15-16 million metric ton, right? So that will actually improve the financial metrics in a big way, right, Sir? Am I correct on that? Yes, you are right. And simultaneously, we are also working on de-bottlenecking Visakh refinery, and maybe the capacity will go up to 17 million metric tons. So that deeper, I think Director Refinery is here. He can add something on that. Yeah. Once we have already established most of the units under this modernization project, now we are looking at better utilizing the capacities, so definitely, in the coming years, we'll be crossing 17 million metric tons along with all the other value-added products. Sure, Sir. And, Sir, just I mean, one small, I mean, point I have is that, Sir, now with our peak debt, which is now gone, and you'll be throwing out cash like water, I would, Sir, seriously request you that at some point of time, you should consider a limited buyback because, I mean, HPCL has been the only company in PSUs to do a buyback from market. So I would really request you to please consider the same because clearly this company does not deserve the valuation which it is getting today, Sir. So that's something I would really request you to please consider. Yeah. Definitely, we'll evaluate the same. And let us hope that what you have stated and what we envisage, we consistently deliver on that. And definitely, we'll review all what you have suggested. Thank you. Thank you very much, Sir. Thank you. The next question is from the line of Kirtan Mehta from Baroda BNP Paribas Mutual Fund. Please go ahead. Mr. Kirtan, I would request you to unmute your line and speak, please. Thank you, Sir, for the opportunity. A couple of questions from my side. On the HMEL, what would be the breakeven spread needed on polymer for the operations to return to the profit? Would you be able to give us some color? See, a margin of $150-$170 per metric ton is what would enable HMEL to be breakeven. And what would be the current margin level against this? They are getting around 70 to 80. Today, the prices are quite very muted, very soft, and the entire sector is struggling on this account. Let's see. There are two things. One is from as regards the operations at the HMEL is concerned, their facilities are fully stabilized. They are operating at more than 90%-95% of the capacity. The pricing front, they are approaching the government also as to look at whether they can put in some tariffs so that the product does not come in. So on various avenues, attempts are being made as to how we can improve this entire petroleum industry, the entire sector. The HMEL refinery with the Chhara LNG terminal, will we be able to start picking up gas if the pipeline completes? Yeah, yeah. Our Chhara terminal is connected to the national grid. That is not going to be an issue at all. HMEL pipeline is connected to the Mehsana- Bathinda pipeline where last leg of a few kilometers were left. So is that leg also complete for HMEL to receive the gas? Yeah. To my knowledge, GIGL or GITL has already connected there. HMEL is continuously consuming gas for more than one and a half years now. Right. And second question was on the Barmer refinery. You mentioned about the CapEx commitment of INR 71,000 crore. What is your comfort on sort of managing the CapEx within the targeted budget, or is there a possibility of any CapEx escalation? As of now, we said that the commitment, what we have made, is around INR 71,800 crores. So most of the EPC contracts and all those have already been done. So those things have already got factored as regards the commitment is concerned. So what would be only the soft cost or the IDC, which will be coming here. With the commissioning in this current calendar year being planned, we'll have to work out as to what would be the exact details, but nothing significant is likely to. In terms of the project contingencies, what level of contingencies would be available to take care of any potential escalation? That's what I stated, that all EPC contracts and all have already been placed, and most of them have reached the stage of 95%, 97%. There are four units which have already got commissioned. Now, at this stage, I think contingencies are not an element to be given too much of weightage because the unit has reached a significant advancement as regards their execution is concerned. Right, Sir. Thanks for this clarification. Thank you. The next question is from the line of Amit Murarka from Axis Capital. Please go ahead. Yeah. Hi. Good morning. Thanks for the opportunity. So the first question was on the refinery. So you said that you're looking at completion by the end of this year. So the debt is currently not getting consolidated, I think, because of JV structure, as you had mentioned earlier. So once it gets commissioned, do you start including the debt in your consolidated books, or will it stay outside the books? No, it will not be consolidated because as per IndAS requirements, we will not be consolidating the same. But for the sake of investors or anyone in the requirement, we will definitely share those details. Not an issue. Even today, the debt is almost INR 34,000 crores in HRRL books. Got it. So even post-commissioning, you will not be consolidated. It will just be associate income or loss whatever. We're doing the line-by-line consolidation because the terms of the JV agreement and all, we have got it analyzed as per that, strictly in line with Ind AS requirements. We will not be consolidating, but we'll be putting only a line entry for the profit consolidation. But any details which are required, that will definitely be shared. Not an issue. And is there any underwriting from you for that debt? No. There's no underwriting. Both the promoter, that is, Government of Rajasthan and HPCL, have given the sponsor support undertaking. Both of them have given it for their respective shares. We hold around 74%, and the Government of Rajasthan holds 26%. Understood. Understood. And also on the CapEx plan, so could you kind of give at least some understanding about next year's CapEx outlook? See, this year, we may be ending with a CapEx of, say, INR 13,000 crores-INR 15,000 crores. And the same trend would continue for the next few years. Sure. Sure. That's all. Thank you. Thank you. The next question is from the line of Somaiah from Avendus Spark. Please go ahead. Thanks for the opportunity, Sir. I have a few questions. Sir, first, can you give some color on the Visakh bottoms upgradation project? So in terms of the input and output, and what are the kind of spreads that we are seeing between both the products when we say a net impact of $3-$4 GRM? Yeah. This particular unit is designed for almost 93% conversion into distillates. And as already told by Chairman, the dollar per barrel on full throughput of the refinery will be $3-$4. Fuel oil will be fully eliminated. And the output would be bitumen? The output of the plant is mainly diesel, naphtha, and gas oil for secondary cracking. Got it, Sir. Sir, and let's say between the spreads that you see between, let's say, FO to bitumen today, where are the spreads like? FO to bitumen spread. 10,000? Yes. It's around INR 10,000 crore per metric ton. Got it, Sir. Sir, and also, when you said CapEx, around INR 13,000 crore-INR 15,000 crore kind of a run rate. So now you have announced this INR 4,700 crore. So this is included within that, the modernization project? Yes, yes. It is. We have also started the Visakh-Raipur pipeline. And shortly, we'll also be doing the COT at the Mumbai refinery. So we have various other projects also up our sleeve. So those also would be once we take the board approval, we'll be sharing with you all. There are one or two more pipelines which are being planned for LPG. Sir, any split, if you can give, between refining, marketing, CGD within this INR 14,000 crores per annum CapEx? So we'll be doing around INR 3,000 crores-INR 4,000 crores in the refining segment. And in terms of marketing, we do around INR 6,000 crores-INR 8,000 crores. And the balance is the equity contribution which we give in our various JV subsidiaries, that is, HRRL, HPCL LNG, and others. And even HP RGE, where we are doing a lot of renewable projects. So broad split is refineries, marketing, and the corporate, that is, the contribution to the JV subsidiaries. Got it, Sir. Sir, Barmer, how much of equity contribution is still pending from our side? We have given almost INR 13,000 crores. And the total contribution from our end is around INR 18,000 crores. Understood, Sir. Sir, also, when you said Chhara, that 1.5 MMT of gas demand for internal consumption, so is there something that we are currently drawing from someone else and that gets diverted, or it's entirely fresh demand once Chhara comes online? Today, we are using gas in a limited way in our Mumbai refinery. So that we are sourcing it from we are purchasing and using the gas. At Visakh refinery, the Srikakulam Visakhapatnam pipeline, that has to be completed. In fact, the EIL is already on. That was being executed by APGDC, but they have now PNGRB is advertised again for completing the pipeline. Some 20km-30 km is left out. Otherwise, the refinery, as part of our VRMP, we have already made it compliant for using natural gas. Rajasthan refinery will be fully compliant, and HMEL is already using gas. All these four units or refineries will be switching to gas. And that would be one major anchor for us as regards the gas is concerned. Plus, once we tie up with the for our long-term gas, we'll be also aggressively marketing the gas. And also for the various GAs which we are operating, we are operating in almost 25 GAs in 14 state s. So we'll be also using our own gas since it is connected already to the grid. Got it, Sir. Sir, any break-even utilization that we have for Chhara that we're looking for? At 30%, we achieve the break-even at 25%-30%. Okay. One bookkeeping question. If you can give the net debt number at a standalone entity and also at HMEL, Barmer, you said it's around INR 34,000 crores. INR 34,000 crores. At HPCL level, INR 34,000 crores. Huh? INR 34,020 crores total. INR 54,020 crores is the total debt. The long-term debt is INR 44,000 crores, and short-term is around INR 10,000 crores. I mean, is the net debt number, Sir, or is it gross? It is the net debt total. Okay, Sir. And also at HMEL? HMEL is around INR 33,000 crore, INR 34,000 crore. Sure. Thank you, Sir. This is very helpful. Thank you. Ladies and gentlemen, due to time constraint, we will take that as the last question. I would now like to hand the conference over to Mr. Varatharajan for closing comments. Thank you, Sejal. I'd like to give the floor to Mr. Rajneesh if he has any closing comments. Thank you for the various questions. We'll continue to put in our efforts to replicate the performance, both in terms of operational and the financial parameters. Yes, I can only say that you have been supporting us all along. Our CapEx plans, which we had unfolded a few years back, they are now almost on the verge of getting completed. Maybe this year is going to be the one where we will start realizing the incremental benefits out of these. So better times are there ahead of us. So thank you for all your support and God bless you all. Thank you. Thank you, Sir. I wish to thank the management as well as all the participants for taking time out to have this discussion. Wishing you all the best, Sir. And thanks, all the participants. Have a nice day. Thank you. On behalf of Antique Stock Broking Limited, that concludes this conference. Thank you for joining us, and you may now disconnect your lines.