Bharat Petroleum Corporation Limited ($BPCL)

Ladies and gentlemen, good day, and welcome to Bharat Petroleum Corporation Limited Q4 FY '26 Earnings Conference Call hosted by Antique Stockbroking Limited. [Operator Instructions] Please note that this conference is being recorded. I now hand the conference over to Mr. Varatharajan Sivasankaran from Antique Stockbroking Limited. Thank you, and over to you, sir.

Thank you, Michelle, and very good morning, everyone. It's my pleasure to welcome all the participants on this call as well as the BPCL senior management for the fourth quarter FY '26 BPCL Results Conference Call. With us we have Mr. V.R.K Gupta, Director Finance; Mr. Pankaj Kumar, ED, Corporate Finance; Mr. Ashish Goel, CGM Corporate Treasury; Ms. Alasalakar,GM Finance; Mr. Balagirish, Senior Manager, Finance. I request Mr. Gupta to deliver his opening remarks.

Before we join the call with Gupta, sir, let me just briefly start with the statement. Thank you, Mr. Varatharajan. Good morning. On behalf of the BPCL team, I welcome you all to the post Q4 results con call. Before we begin, I would like to mention that some of the statements that we will be making in today's call are based on our assessment of the matter, and we believe that these statements are reasonable. However, their nature involves a number of risks and uncertainties that may lead to different results. Since this is a quarterly result review, please restrict your questions to the Q4 results I now request our Director of Finance, Mr. V.R.K. Gupta, who is leading the BPCL team for this call to make his opening remarks. Thank you, and over to you, sir.

Good morning, everyone, and thank you for joining the call today. I hope you have had an opportunity to review our results and earnings release uploaded on the exchanges. As you are all aware, we are meeting in turbulent times amid ongoing tension in West Asia, driving both global and domestic economies through an uncertain phase. There has been major disruption in the global energy supply chains with impact seen across all sectors and geographical segments. Crude and product prices, which remained broadly range bound for much of FY '25, '26, witnessed a heightened volatility towards the end of the year and disruptions to flow through the state of ours. ForEx fluctuations and geopolitical developments continue to remain the key drivers for energy markets. Against this backdrop, we have continued to demonstrate operational resilience across our refining, marketing and infrastructure businesses while remaining firmly committed to supporting India's energy security objectives and ensuring uninterrupted fuel availability across the country. Although we witnessed short-term spikes in demand due to panic reactions, resulting in initial disturbances in market supply. We have been managing the situation to ensure sufficient supply security include coordination with OMCs under the able guidance of MoPNG. I'm happy to share with you that despite mounting challenges amidst the ongoing crisis, we have ensured smooth supply of all essential petroleum products, MSHD and LPG across the country. While our financials for FY '25-'26 have been strong since the large impact of the war is not fully realized in Q4 due to timing differences. Q1 '26-'27 is going to be a challenging period. Let me now take you through the operational and financial highlights for the quarter and the year. Refinery, even during the recent war situation, we continue to maintain crude supply security through flexibility in crude sourcing by diversifying procurement strategy and the ability to process multiple crudes across geographies. We have increased our procurement from 25% in Q3 to 31% in Q4, and it continued to increase fill up our supply gaps in the light of the situation. Further, we have diversified to 8 new grads approved during the year, covering 4 geographical regions. I would also like to assure stakeholders that crude supplies have been secured through July 2026. Our refining business delivered a resilient operational performance during the quarter, supported by optimized crude sourcing, robots, refinery operations and disciplined execution. During the year, our refinery spread at 116% of utility with refinery throughput 41.15 MMT, which is highest ever and declared yield of 84.54%, reflecting the strength and complexity of our refining portfolio. Our gross refinery margin for the year 2025-'26 stood at USD 11.7 per barrel. On the marketing side, our business continued to maintain healthy momentum driven by steady demand growth across retail and commercial fuels. During the year, our overall domestic sales volume stood at 54.18 million metric tonnes at an overall growth of 3.5% with petrol sales growing by 5.7% and diesel by 1% and ATF is 11.4% has continued to maintain leadership in true retail outage among PSPS with average throughput of INR 143 per month in Q4 25/26 strengthened by Mark strategic cutting access strong highway projects and continued focus on customer experience and retail productivity. In the retail segment, we continue to expand our customer and infrastructure footprint during the year. BPCL commissioned 1,691 new retail outlet during this year, taking the overall retail network to 25,323 outlets. Our EV charging network expanded to 6,823 stations, while the CNG network increased to 2,650 stations achieving network leadership in CNG among PSUs. Digital customer engagement initiatives, including the Octane Cloud and continue to witness strong customer adoption and engagement. Further, in our LTL businesses like Apna Ghar, Bcfe, in ended stores, we continue to spend the nonfuel offering through the expansion of convenience and customer focus formats across our network. The latest April retail market share, we have received MS at 3.02% and 29.61% in retail segment and the LP segment as of March 2026, the cumulative negative buffer towards LPG compensation stood at INR 12,319 crores. This is after accountng for the 5 installments received from Government of India from November 2025, again at the announced compensation of INR 7.94 crores. Our gas business continued to deliver strong growth momentum during the year. The annual sales volume stood at 2.29 MMT, registering a growth of 26.5% year-on-year. The CNG G segment in our PS recorded sales volume of 248 MMT, reflecting a robust growth of 62.1%. The business also achieved 100% utilization of the regasification capacity, booking with LNG, 4% inception of LNG imports by BPCL. Let me now update you on the progress of our strategic growth projects and long-term value creation initiatives. The solvent project at Mumbra, with an annual capacity of 200 TMT was commissioned during Q4 FY '25-'26. This first-of-its-kind of Make in India initiative is an import substitution and strengthens our presence in the new speciaty product segment. The Hyderabad pipeline a 425-kilometer, 2.6 MMTPA multiproduct pipeline was commissioned in Q4 FY '25-'26. The project strengthens efficiency and provide critical evacuation infrastructure for the upcoming project, whilst reflecting on our broader focus on logistic infrastructure. Further, during the year, we commissioned 2 retail depots, 2 LPG bottling plants, 3 aviation fueling stations and 2 gas pipeline to strengthen supply and distribution capabilities. In addition, projects at the and Mumbai pipelines are under implementation to further strengthen supply chain resilience and network connectivity. We successfully commissioned 1G and 2G ethanol plant of 100 per day capacity, each at Barg in Odisha in October 2025 and March '26, respectively. The project is aligned with the national policy on biofuels aimed at enhancing energy security, reducing crude oil imports and promoting cleaner and green fuels. As part of our project aspire growth agenda, I would like to provide a brief update on our key strategic projects. The Bina petrochemical and refined expansion project has accrued 23% progress against a planned schedule of 32 with INR 4,700 crores incurred and INR 25,400 crores already committed. The schedule variance is primarily due to geopolitical developments and associated supply chain challenges affecting the manufacturing and delivery. However, critical long-lead items remain on track, and all major packages have been awarded by February 2026. Additionally, recent Middle East conflicts have impacted supply pricing and execution time lines. we are actively monitoring the situation and implementing mitigation measures to minimize the impact on overall time lines. Of the Andhra Pradesh refinery cum petrochemical project, which is proposed to be a 9 million metric tonne per annum refinery and petrochemical complex, key proprietary activities are progressing as planned. Environmental and technical studies have been completed, while detailed engineering and financial appraisal activities are currently underway. This project is supported by strong incentive from the Government of Andhra Pradesh. Other major projects, including the PRFCC project at Mumbra refinery, the polypropylene project at Kochi and the POL and LBS in are also progressing steadily in line with the planned commissioning time lines. In the upstream segment, I'm happy to hear the following updates. Under Mozambique Black, on 7th of November 2025, the operator informed government of Mozambique, that force majeure has been resolved. The work has resumed in full swing and the first LNG cargo is expected by mid-2028, presently around 6,000 manpower is in the site and around 42% project schedules have been completed. Further, on the BMC Brazil project, the FPS tender has been fined and to be awarded shortly. And work has commissioned for development and first gas is expected by 2031 and '32. The FID has been approved by the operator, although also through our SPV Urja Limited, the discovery in unconventional has been made in the UAE. BPCL also witnessed the oil discovery during testing up the exploration well X7902yeS in the onshore block 1. Such positive developments are very encouraging and certainly a significant achievement for BPCL as an international operator. On the green energy front, we are advancing the renewable push with 251 megawatts installed capacity and additional wind and solar projects under execution for 100 megawatts. The overall capital outlay for the projects and renewables each INR 1,570 crores. On an overall basis, we incurred a CapEx of INR 20,400 crores. The CapEx target for FY '26-'27 is INR 25,000 crores. Our capital allocation approach remains under a prudent and disciplined manner with continued focus on project execution, balance sheet strength and sustainable returns. Let me now guide through the financial highlights for the quarter. The revenue from operations INR 134,896 crores, the stand-alone profit after tax at INR 3,191 crores and the consolidated profit after tax was INR 5,625 crores. Our stand-alone net worth as on 31st March 2026, INR 95,233 crores, earning per share for the quarter is INR 7.47 per share. As of March '26, the debt equity at stand-alone gross borrowings leverage 0.11. Overall stand-alone gross borrowings is INR 480 crores, and we have current investments including the IL bonds of over INR 18,465 crores, placing us at a net surplus on a stand-alone basis. At group level, debt-equity 0.43 with gross borrowings of INR 43,482 crores. Net equity ratio net of current investments at group level is 0.25. Given prevailing uncertainties in global energy markets, we will refrain from providing forward-looking guidance at this stage. With this, I conclude my opening remarks and would now be happy to take your questions. Thank you.

[Operator Instructions] The first question is from the line of Probal Sen from ICICI Securities.

First of all, congratulations on a great set of numbers. A couple of questions around the performance. One, if we look at the derived refinery margin for the fourth quarter, is it fair to say that there has been some inventory positive impact in the refining numbers for this quarter, given the timing difference between stocks used and the way prices have behaved? Direction will be at least, can we assume that there has been a significant inventory impact in this quarter?

Generally, we don't calculate refinery inventory gain losses because our average inventory is less than the cycle - purchase cycle. But when price fluctuations are -- new price fluctuation movements have happened that particular point of period, definitely, there will be some gain. But we can't exactly give any guidance of what would be the inventory gains. But definitely, inventory gains will help in defining margins in Q4.

Sure sir. That's useful, sir. The second question is with respect to the supply mix. You already alluded to the rising share of Russian crude in our overall supply, and that has helped us offset the shortage from the. Can we get a sense a little bit more granular sense of what kind of supply sources are now there in terms of crude that we have tied up till July, as you mentioned, other than Russia, at of the other destination?

We have WTA 1 destination. We have tried Venezuelan crude we have tried. And even Middle East in spot grids also available like Marban and other things, market-made, these are all available. There, we have tested -- last year, at least 4 grades we have tested, Venezuela, Brazil and Angola. And in sport, many of the grades are available. But major source is coming from Russian only. Even for until July '26, 3 numbers, the major sources are on spot is Russia. But term, we have -- beginning of the year may we have allocated for term around 55% of our requirement. But we are not getting the full term, maybe around 45% to 46% of our term requirements we are getting, even there are constraints in the Straight of Hormuz, but we are getting around 45% to 46% of term we are getting. Around 10% shortage, the 10% shortage, we are moving to part. Otherwise, in the beginning of the year, we have planned for 45% for spot, now it is hovering at 50% spot.

That's very useful. Sir, if I can ask a small follow-up. We know that the crude assay or the API and other nature of WTI in Venezuela is different. So assuming that we have to rely more on those sources, will it have an impact on our distillate yield going forward if the gulf crudes actually reduce even more?

No, definitely distillate yield will change. But at the same time, it will have a commercial benefit also. So net-net, we see what is the CAV value addition at refinery. And what is our product demand. Accordingly, we balance it out over to the product based on the product demand, what is the crude requirements and what is the profitability we can optimize. But we cannot take directly Venezuelan crude directly with the brand only we can take. So accordingly, we are planning small cargo sizes we can take and blend it with other grades, and we take it to the refinery.

Right, sir. One last question. In terms of the CapEx, you already mentioned the overall number of INR 25,000 crores. Can we get a little bit more breakup in terms of segments or key projects that are there in FY '27?

Our major projects are mainly Bina Petrochemical projects, okay? That is for Bina, we are allocating for '26, '27. Refinery plus petrochemicals, we have allocated around INR 11,000 crores. Out of which 2 major projects -- 3 major projects: polypropylene at Kochi, Mumbai and Bina. But these 2 projects and rigor CapEx for refinery INR 11,000 crore. And the marketing initiatives, our new retail outlet expansion and our infrastructure expansion and whatever supply logistics side expansion, we have allocated around 10% of INR 1 crores. And BPRL, we have planned around INR 2,250 crores crores of equity infursion for the ongoing projects. And the CGD network has a continuous expansion of our CGD network, we have allocated around INR 2,900 crores. Overall together, it is INR 25, 000 capital location for '26-'27.

The next question is from the line of Vivekanand S. from AMBIT Capital.

Two questions. The first one is on the impairment that you booked this quarter. Now in your opening comments, you have mentioned that the reduction in Mozambique, the construction activity is underway and you expect first LNG From Mozambique in 2028, mid of that. So why did you take an impairment even after the construction started in Mozambique or restarted in Mozambique? That's question one. The second one is the retail fuel operations. Do you see the current environment as conducive for yourselves to gain market share given that some of the private players, which we are looking to expand, maybe now they rethink due to the uncertainty in the marketing side?

Come to the first question, the impairment in our upstream venture is meant for Brazil venture not for Mozambique. Mozambique, there is no incremental impairment during this year because work is going on as per the schedules and 42 percentage of good progress has happened, it is not warranted at this point of time any impairment for Mozambique project. The major impairment is for the Brazil project. In fact, actually, the FPS for tender, how much it took for 3 years to find a PSIV tender. That was the reason the budget competencies have been further extended to 2031-'32. The oil will come in '31 and gas will come at no '31-32 financial year. Initially, we thought Brazil, the gas and oil will come around '28-'29 financial year since the project has been delayed by around 1.5 to 2 years. So when you respond the future estimated cash versus the current value, it is warranted for impairment. Assuming all other parameters are at the same assumptions. But since project delay is happening in Brazil, that was the reason there is a need for impairment. And secondly, your retail segment based on the current context, whether increasing the market share is good or not. Generally, we don't see a temporary basis increase of the market share because at some point of time, whether retail customers, they may come here and other thing. But otherwise, as a long-term strategy, always we -- our endeavor is to improve our market share. So these are all temporary time period, we have to face the challenges. But otherwise, our market share initiatives are only for long term. Sometimes, yes, based on the current market conditions, so can go up, but our endeavor to sector the market share even on a long-term basis.

Great. Just one follow-up. As far as the carrying value of BPRL goes, now it's around INR 4,100 crores. So is there any broad breakup that you can share of the split of this in value of INR 4,100 crores across these key assets.

That we will share it separately. Main what I'm saying, the impairment is coming during this year, mainly for the Brazil block. Entire amount, whatever impairment INR 4,300 crores is only for the Brazil block. All other assets are there is no incremental impairment.

[Operator Instructions] We'll take the next question from the line of Mayank Maheshwari from Morgan Stanley.

My first question was a bit on marketing again. I think you have seen almost pretty much a year of relative market share loss compared to the other peers. Any things that you kind of can suggest, which will help you kind of reverse that? Obviously, right now, it's less conducive, but like over a more medium what is BPCL doing around that?

No, our object is there should not be any disruptions in the supply chain. That is the first objective. So we have to continue to supply to the market and no customer on account of nonavailability of the fuel. In terms of market expansion and market share expansion, it's a continuous strategy. Our endeavor is to take, I think 32% is detailed segment market share over a period of time. That was the region many initiatives we have taken at the retail field. One is through expansion, network expansion is one strategy we have adopted and bringing more and more initiatives to give more convenience to the customers. So these 2 initiatives our long-term strategy to take up more market share at least in retail, 32% in a couple of years.

Got it, sir. And I think the second question was more related to the upstream side. In terms of total investment upstream, your share across all the portfolios and now that you have got some good discoveries as well. Over the next 5 years, like how is BPCL thinking in terms of capital allocation to upstream as a part of total CapEx?

Yes. We have 3 major projects in our hand. Already discovered, where exploration stage is completed. Now it is either the development stage has started and some work is completed. Let me explain one by one of these projects. One is the Mozambique. That is our flagship project. We're having a reserve stage of around 70 Tcf as I said. The first phase is the development is happening only for 13 Tcf. So out of which our stake is 10%, already 42% is completed. And there is a few potential of future expansions. Once this particular stage is completed, whatever the cash flow comes, the first phase is mostly it is project finance, there is no equity commitment from our share from Mozambique, whatever we have committed and invested that is okay and future any investment as from mainly for the project financing. So there is no future capital coming from BPCL side through equity. And the subsequent stages definitely what our cash flow comes from the first phase automatically, the cash flow is reinvested in the subsequent phases. So that is broadly award. Come to the Brazil, Brazil, the total project CapEx size is around $6.4 billion. So our share out is around 40% mean $2.8 billion. So maybe future our capital contribution will be around $1.2 billion. We have to invest over a period of 3 to 4 years. And this is only in the field only one development. And there is a potential of another development in the same field till the exploration and drilling had to happen. But we are -- at least the initial estimations we are feeling the similar size of projects are available in another field also. So there is a good potential. But at this point of time, we cannot comment on that on whatever has said. But what our existing field in Brazil, the daily product crude, we are expecting around 88,000 barrels per day out of which 40 percentage is through our joint venture IBV. And this is a good equity are. The rights are equity, we can bring in India in case one here or we can market our crude rates wherever we want based on the commercial position at that point of time, that is a Brazil. And the third one is lower through lower in UAE already producing block. It is giving good volume because India consortium having around 10% of the stake in that. And another discovery just now we have completed during FY '25-'26, now it will go for the development plan and the activities we will pay. The initial estimation, so we are hopeful we have a good amount of reserves there and the amount of attractable reservers. So once that plan is ready, then we will communicate to you. And beyond that, we have certain producing blocks in India, but very small in size. Our plan is at least with a long-term strategy, we are looking at it at least 6.5 to 7 million metric tonne of crude capacity we should have in our group balance sheet. That is our short-term target. So with these projects, we are hopeful we will reach that level.

The next question is from the line of Nitin Tiwari from PhillipCapital India. .

My question is with respect to your key CapEx projects that you're undertaking. So If you call our benefit summarize what is the planned CapEx for the 3 projects you were currently running, which is in Mumbai, Kochi and Bina refinery? And is there any relook at that amount given the sharp depreciation in INR, that is my first question. Related to that is given that this year, the pacing fair amount of challenge in terms of our operating cash flow. So is there any -- relook at any of the programs? And continuing on that, how do we see our debt to equity ratio changing? I mean on the perspective on current operating cash flows that we are going to generate given the scenario we are in and the CapEx we have in front of us. So that would be my first question. .

Let me explain our 3 major flagship projects. One is Bina Petrochemical Complex. The total project cost is around INR 49,800 crores. Out of which only, the foreign component -- foreign component will be around INR 6,500 crores. So even if there is any new foreign fluctuation, the impact on the foreign component is limited. Maybe even a 10% depreciation, the initial estimate of INR 6,500, INR 6, 000 crores, INR 7,000 crores on account of foreign exchange fluctuation on that component it happened, But all other component, the project cost is INR denominated and around INR 25,000 crores tenders have been awarded on fixed-price contract, so that there won't be any price impact on that what already awarded projects. Maybe around 20% to 25% of we are yet to award. There may be a small impact, but we are hopeful whatever approved project cut within plus or minus 10% have approved. We're hopeful within that limit, we will be in a position to complete. But let us see next 1 or 2 years, how the things will happen with what will be the inflation and other things, we have to wait and see. But at this point of time, if you ask what our approved number within plus or minus 10%, we will be in a position to complete the project for Bina. Come to polypropylene at Kochi refinery, almost 85%, 90% of the projects have been awarded. There is a -- we have initially approved at INR 5,000 crores plus or minus 10% based on the current estimation, we will be in a position to complete the project at that level. So there won't be any price escalations. And the third project is associate Mumbai refinery. Lastly, only, we have approved. The work has just started. The licenses selection and going on. At this point of time, we are not foreseeing any major cost escalation at this point of time. Maybe once we reach to the next to 30%, 40% progress if we see, then we will come to know whether is there any price escalation indicates are not there. These 3 are our major projects in India. And all other CapEx allocations, these are our short-term projects, maybe 1 year or 2 years, these projects can be completed either pipeline or infrastructure, depots and other things. We don't foresee any major price escalations, only even the steel and material prices goes up, the component is small, we are hopeful as far as the original estimated numbers, if we say plus minus 10%, we'll be in opposition to complete. And more other upstream side, whatever projects already we have explained, Brazil that part, we have approved at our board level subject to the government approvals and Mozambique also, we have approved at Board level and 42% project has been completed. We are hopeful within the approved project cost, that project also can completed. So this is overall our project side and the price impact on the project side. Second, when it comes to when you say the balance sheet, how do we manage the cash flow and other things, we have a very strong balance sheet, even March '26, if you see, we have a CapEx of around INR 20,000 crores. We spent last year. Still, we could maintain our debt to equity 0.11 and stand-alone and 0.25 at consolidated after netting up our investments. This year also, we are expecting INR 20,000 crores of CapEx, and we may cross INR 25,000 crores, maybe '26, '27 at the end of the year, if things are going smoothly. Even with this also, we are not forcing any big jump up debt equity provided once the crudes. So how things will move in the next couple of months, not sure, but we are hoping whatever challenges today, we are facing only short-term, but once things will settle once the war and the blockade is removed at the Straight of Hormuz, the supply becomes normalized, then we are hopeful by at least July as the price stability will come and normality can come back. So we're not foreseeing any big stress on our balance sheet. Maybe yes, short term, there may be a stress out because the cash flow is much happen. So we have to take second borrowings during this period. But end of the year, hopeful, let us assume wait and see how these things will move. On long-term debt equity, we are projecting by all CapEx, we are not expecting the debt to equity will go up beyond 1:1 at group level. That is our expectation. Once the projects are completed, then definitely, the new cash flows will come from the new projects, then maybe another couple of years, that debt equity can come back to a normal level. Always we see debt equity should not cross at 1:1 at peak level. And generally, we are comfortable to maintain at 0.3, 0.4 level debt equity.

Sir, my second question is also related to the first one. So as you pointed out, we do have a supply the challenge because of the disruptions in Middle East. But at the same time, we also have like cash flow challenges stemming from the pricing that we have over here. So I mean in that backdrop, I mean, this is more of a hypothetical question. Is there any thought among to switch back to a regulated regime at least in the regulatory regime, we used to get back are like under recoveries that was there in petrol and diesel. At this moment, while technically, the products are deflated, but at the same time, there are severe under-recoveries as far as our go, but there is no road map for recovery of those under recoveries. So any thoughts on that, sir?

Let me explain. You know LPG already regulated products. Whatever under export and LPG, definitely, we are hopeful some part of come from Government of India like earlier government always supports for LPG. In terms of other products, we feel it is a short challenge. It's not a permanent challenge. So we have seen the situation even earlier also, even in Russia, Ukraine war, we have seen. So we feel it is a short-term challenge, definitely, we'll come back to the normal scenario. We can see.

We'll take the next question from the line of from DSP.

Many congratulations on a good set of results. I just have 1 question. So on the marketing front, majorly on fuel availability side, we have been doing that there have been some shortages or some change into the working capital structure for the dealers. So I just wanted to check from you as to if there are any changes that you have made? Or you are voting any shortages in some highways or few far-fetched forms? Any clarity on that would help a lot. Yes.

There is no shortage of fuels. Even if we see our refineries the operations are continuing at 118% of refinery capacity utilization. That means crude is available, crude is contently coming here, our refineries are operating very well. Even in the sales also, when you see the sales last year, almost 3.6% growth, it is much higher than normal expected growth of 2.5%. So whatever market demand is there, we are continuously capturing the needs. And second, some credit in terms of the credit, our policy till we are continuing extending the credit to the dealers. So there is stoppage to the dealer. Whatever credit policy based on the requirement, some controls and other things, we extend the credit. But the only thing in case if the money doesn't come back in time, if there are any defaults with the customers, then definitely, there will be some restrictions on extending the credit. Use the credit, but within 3 days or 4 days once they collect the cash, they have to pay back to the company. So if there is any defaults, then those customers, we put a control.

We'll take the next question from the line of Sabri Hazarika from Emkay Global Financial Services.

So 2 questions. Firstly, so there has been a press note press article where it has been mentioned that I think it's quoting the management saying that current Russian crude share for BPCL is around 40%, 45%, the discounts are also at $6 to $8 per barrel versus $12, $13 per barrel. So do you confirm this?

One is percentage, yes, definitely recent period, the Russian cargo percentage has gone up. last year, Q4, it was 31%. But whereas the current period because most of the supply on spot basis, only Russian grids are available and more. So Russian product offtake is, and I said around 40%, 41% in the recent time, we have taken. In terms of the discounts and premiums, daily it changes. So last year, it was in a discounted scenario, Russian crude. This year, that is a premium scenario. So it depends. Demand-supply situation are what are the sanctions on Russian cargoes. If there is no sanctions, it's a free market. There are sanctions, then tight markets. So it depends on the market trends. So I cannot say it is available at discount, and this will vary. Discount at least presently, it is not available at discount, at least I can say that.

Okay. Got it. And secondly, regarding your inventory position right now, so how much crude stocks LPG stocks, product stocks are there at the moment for the company. .

Generally, we keep crude stock is around 25 to 27 days, maybe sometimes 1 or 2 days higher higher we are preferring and keeping higher inventory levels, maybe 26 that crude increase 27 days. Last year, it was 26, maybe some point of time, 1 or 2 days additional cargoes in case if we take it, maybe 29 days. But otherwise, we can keep this level only. We cannot keep beyond 35 because we don't have storage also.

In product and LPG?

Product number of days, last year, MARCH '25, it is 25 days. This year, March '26, it is 24 days, more or less similar range we keep it.

Okay. And LPG?

LPG changes. So today, if we get 1 cargo, then number of base capital will be higher. So maybe 3 or 4 days, maybe the cargo is consumer, the number of days comes. So it is challenging. So we are getting the LPG. We are capturing the needs. So generally, we are comfortable at this point of time to keep around 15 to 20 days coverage, but sometimes it may be lesser than 15 days coverage. Sometimes if we get good cargoes, then it will be.

We take next question from the line of Vinit Banka from Nomura.

Firstly, on from what I read from the media report, the Russian crude sanctions will expire by mid-June. It has been extended by 1 month. So -- and you said that you have booked your supplies in July and most of it will be coming from Russia. So is there a risk of shortfall given that there is a possibility that these sanctions will not be extended?

Let me explain. Russian crude is not sanctioned any time. Well, entities have been sanctioned, okay? Whereas Iran crude is sanctioned. So once crude is not sanctioned, you have right to buy from nonsanctioned entities. Even before the war also, we need to continue to buy Russian crude from the non-sanctioned entities. There may be supply from the non-sanctioned entities. So waiver -- during the waiver period, you can buy Russian crude from any party. During lapse of the waiver period, you can buy only from the non-signed entities. So always, we keep that controls, whatever Russian crude we buy, always it is from the non-sanctioned entities. It is the cargo vessel owner, our port or the supplier, those party should be non-sanctioned entities.

Okay. Second question on LPG under the rebook. From what I understand from HP and IOCL that under recovery currently is around INR 670, INR 680 per cylinder. And if you look at the Saudi CP price, it has gone up to like $800 per tonne. And if you try to plug in this the number which we arrived at is much lower than INR 680. So what exactly changed in the calculation? Is there higher spot premium over the Saudi CP because the sourcing mix has also changed from cut like U.S., Venezuela also again, some higher logistic costs as well.

You're rightly said. These 2 are the additional components. One is the logistics cost, definitely. Free war levels are freight cost, world-scale is around 50, 55 level. Now the wall scale has gone up to 600, 700. So the peak level. This is one component, freight cost really it is increased. And the second component, when we say Saudi CP, it applies only to the TEM contract. If 10 million are available, when you go to the spot market, sometimes you have to pay a premium of $300, sometimes $200. When you take cargoes from U.S. definitely, the freight rates will be very high because the transit period itself is and flow will be almost 90 days. So when you are engaged your time set up for 90 days, definitely, the freight cost will be higher. So these are the 2 components. There are 2 components, if we add it, your actual undercut be around INR 650.

Sir, have you signed any long-term LPG contract from sort other than Middle East? And what could be the benchmark for that?

Last year, the industry has signed around 10% of requirement LPG for the U.S. supplies that the supplies have been started. The benchmark will be Saudi CP $10, $15 only. So in a particular month, maybe Saudi CP landing costs may be minus $10, sometimes it may be plus $10. It depends on the rig rate. That was the term we have signed 10%. But to start now recently, we have started taking spot also LPG spot also from U.S. supply by sending our time charter vessels there and bringing the LPG. So they are definitely the landing cost really higher as compared to the term what we have signed.

Okay, sir, last question, sir, on the refinery side, can you give some kind of number around what is the refinery margin trend that we are looking at in April, May?

No, we cannot give any guidance. April, May would be the refining market. So last year, '25, '26, we ended up 11.74. So why we cannot give this refining margin, it depends on various parameters. And every parameter changing and derivatives, okay? The crude price, the premium, the freight, the insurance, the product prices. So there is a stable environment where we can give a little bit indication okay, this would be look like. So generally, we avoid giving any guidance on what would be the indicator of GRM. Many parameters.

The next question is from the line of Yash Nandwani from IIFL. .

Sir, could you please provide some sense on the delivered crude cost currently similarly like LP that you said we understand that OMCs are paying a premium over the Brent prices along with the red freight and insurance cost. So if possible, could you share a broad range for crude premiums currently?

It all depends on which source we take crude. But individually, you can take today's date, if you want to finalize any deal, the Brent at around $110, maybe our landing will be $120 or $122. Maybe today, if you ask me, -- so everyday it changes.

And sir, my second question is related to a point raised earlier. Given the current situation, is it fair to assume that we could see some meaningful price like at periodic intervals rather than complete move back to daily price revisions? .

I cannot comment on this deal. We cannot comment.

We'll take the next question from the line of Sumit Roda from Smartsun Limited.

Firstly, sir, I mean, extremely performance for the last financial year. Now for will be very quick, quick and brief about it. So sir, I've actually seen your statement wherein you said that you don't expect any stress on the balance sheet. Now sir, I'm absolutely published on this statement, which you've made because I mean we all are aware about what kind of under-recoveries today we are facing across all the products. And sir, I mean just my question to you, honestly, is more as an investor. I that if today, bread prices can move up by 5% and will also go up at the same quantum what's actually stopping the fuel prices from moving up as you've seen internationally, all the countries in the world have raised prices. So the point I'm getting at sir, is that -- how are we seeing the situation? Or what's the inflection point where you say that this war is now well into the 85 days it's not getting resolved. We are going to align prices to market linked because, sir, today, we do 40-crore liters of fuel across all the 3 OMCs and the amount of money we are losing. So it's quite purplexing as an investor angle that. What are we thinking exactly? So can you please share some thought at least -- and especially after you said that you don't expect stress on balance sheet because obviously, your balance sheet is very strong. But obviously, things are challenging. So can you please explain a bit from an invest angle, sir?

Let me clarify, when I say there is no trust on the balance sheet. That is a status as March '26, okay? Even though there are certain under recoveries even during the month of March, but still we could withstand. Now come to the future. This particular environment, we can observe for a limited period. It continues differently, no bank. Once the cash flow mismatch happens, we can observe a 1 month or 2 months. But subsequently, if it continues, definitely, there will be some solutions so that our cash flow will continue. So our cash is required for the future CapEx requirement, so we can put our investment. If it continues for a longer period of time, definitely, there will be stress if there is no price revisions to happen. At some point of time, the price revision and the button has to be shared among all the stakeholders. That is my statement when I say. But long term, we are hopeful the prices will come back to the normal level. So at that point of time, whatever our estimated cash flows, if it continues, then there won't be any stress on the, even if we continue with the large project, there is no review of the existing project. That is what I meant. Whatever we have announced work is going on. We are not reducing that project. As you mean it will normalize after some point of time. Now how long it will continue, in case if it continues for a longer period, definitely no bank, it can take that action.

So sir, I mean, if I can just ask you on 1 thing very quickly. So sir, I mean, what we saw yesterday, I mean, our INR 0.90 hike or something. So sir, I mean, what is -- why can't we go back to a mechanism? Or what are the hurdles we are facing from going back to the daily pricing, wherein the pass-through is quite simply done on a daily basis, which was much before 2022. So can you go back to that era again?

I cannot comment anything on the price revision. It is an industry we discuss and accordingly, what is good for the companies, what is good for the country. And currently.

The next question is from the line of Somaiah V. from Avendus Spark.

So my first question is on the products outside of the auto fuels between PetCo NAFTA. If you could just help us understand, on an integrated basis, have margins improved versus pre-levels.

If we see the margins, the marketing margins are -- it depends on the import price only. There is no significant change in the marketing margins. Whatever in the earlier formula or marketing margin will continue and the product was refining margin, generally, we calculate refining margins. So overall, refining margin can we calculate that is a margin for the entire basket of reps. But marketing side, everything on import parity, all of the ports are an import parity only. Whatever, for example, marketing margins are around 4% or 5% of material price, similar level, so we continue to maintain in terms of the marketing margins.

Got it, sir. Sir, second question is if you will on loss. If you could just help us understand what is the approximate loss across refineries and if possible across Kochi, Bombay, if you can just split it.

For Q4, Kochi refinery, fund loss 3.48 per totally 8.41 , Kochi, 5.64 for Mumbai refinery and Bina is 9.01, total fuel and loss.

Sir, would we have a year back what this number would have been in case you have it handy.

I don't have. Similar 0.2, 0.3 variation.

The next question is from the line of Sucrit B. Patil from Sientra Private Limited

I have 2 questions. My first question for Mr. . From a technical standpoint, how is Bharat Petroleum optimizing its capital structure to balance growth investment in refining marketing and renewable energy with debt sustainability, especially given the capital-intensive nature of oil and gas operations, can you shed some light on this? And on how the framework has been used for cash flow for forecasting interest rate management and working capital to ensure liquidity while still maintaining the profit. First question, I have a second question.

You ask you 1 question, please cover everything. Yes. Let me broadly give a clarification on our capital allocation. Whatever projects we take, every project may not give similar returns. The object to when energy sector is growing at a 2% or 3% on annualized basis. if you want to grow as a company, then you have to diversify even within the ejector, which particular areas we have to keep the investment. Or if you want to diversify yarn, the energy sector, which setup you have to allocate. The object to how best to optimum returns we can give it to our stakeholders, that is our main objective. So even when there is a market potential for renewables, we know that renewables will give only very rate of returns of around 8% to 9% only. But at the same time, we have net zero objectives. We have to balance our portfolio, keeping capital allocation for renewables. So in terms of the returns point of view, it gives a lesser return. But objective point of view, we have to give more allocation for renewal. Accordingly, taken a target of 2 gigawatts in the immediate period for renewables. So even it is giving you a lesser return, but our endeavor, what extent a maximum we can use it within our refinery, so that the returns will be much, much higher. Go initial for purchasing power from outsourced sources, better to generate the renewable power. It needs 2 objectives, 1 net zero objective to realize giving good returns in terms of using our refinery that is a region whatever expansion we are taking for 2 gigawatt, more of the output we are using within the refinery. And second, in terms of a point of view, we have seen there is a big potential advantage if we integrate the petrochemicals with our refinery, then it can give a good value addition for the refineries. That is the reason we have taken a couple of years back, petrochemical strategy where we don't have any big presence in petrochemicals. -- then accordingly, we are allocating a good amount of capital for the gifting projects. Even tomorrow, upcoming projects. So the petrochemical intensity will be very high, so that it can meet the product demand in India because the growth is almost 5% to 7% growth petrochemicals, whereas in India -- most of the petrochemical products are import driven. So that is the reason our major capital allocation if you see it is happening in petrochemicals. The thought of major capital allocation is happening in upstream side where we've already completed the exploration activities where it is moving to development level, where we are putting up more amount of money so that we have a good clarity after coming end of the project, the cash plus will come back. And today, we have a refining capacity of around 1 million metric tonnes, whereas the feed our old feed is very less as compared to our refinery requirement. So with all these projects, we are expecting at least 6 to 7 million metric tonne now for exploration, we would have either rights on the crude oil or we should have share of profit on the crude oil. Accordingly, we are targeting around 6 million to 7 million metric tonne of crude we should have our own. That is the reason we have allocated the capital. Whatever capital allocation projects we take, definitely if it is not giving a commercial return, generally, we are very fit in terms of the capital allocation. If we are clear about the return, then only we allocate any capital, you see any of our earlier projects of IREP or any other project. So it always gives good returns. And we -- our endeavor is timely completion of the projects without any project cost, these two our objectives. So in terms of the debt equity earlier also I said, we never take extra leverage. We are comfortable debt equity at 1:1 at peak level. But subsequently, after coming the project, the debt equity should come back to the Normalized level, 0.4, 0.5. So then only we can take up that large project. And most of the projects we look at it, how fast that work can come back, what is the netback period is. As long as of the netback period is 5 to 6 years, then we are comfortable, at least 0%, 90% of my investment can come back in 4, 5 years. Then the risk levels will be lesser. So automatically, we can serve the interest in debt. So these are the broader inshore.

My second question to Goyal is looking ahead, how do you see ageroperations evolving to support Bharat Petroleum's growth what measures have been taken to return liquidity management, ForEx mitigation and funding diversification across domestic international markets?

Ashish Goyal the side. So fasten foremost, if you were to actually have a look at our borrowing structure the foreign currency loans on the balance sheet are almost very minimal. So as far as the exposure in foreign currency borrowings are concerned, at the moment at this particular juncture, it is very, very less. Of course, the treasury functions keeps on evaluating the cash flow situation on an ongoing basis as well as the projections on the basis of the volume market conditions. -- and we are taking all necessary steps to arrange for the fund at the most competitive rates. Thank you.

We'll take the next question from the line of Vinit Nomura.

Just a small follow-up on your answer to your previous question. So you said landed crude cost versus the benchmark, the difference is currently $10 to $12 per barrel. So what was this number before the war?

Before the war, I can say WTA, we take a Brent plus 5, Brent plus 4 or 5. And peak, it went up to $20 also Brent plus 20 ,Brent plus 25 certain cargos we had.

Ladies and gentlemen, that was the last question for today. I now hand the conference over to the management for closing comments. Thank you, and over to you, sir.

Thank you, everyone, for your wholehearted participation in today's con call. Looking ahead, while markets may remain volatile in the near term, BPCL integrated operating model and balance sheet position as well to navigate the evolving landscape. As we celebrate our 50th foundation year having successfully navigated multiple industry cycles, we remain confident in our long-term strategy, execution capabilities and ability to deliver value. And then with the Government of India's vision Atmanirbhar Bharat, we continue to strengthen domestic energy infrastructure and invest in future-ready energy platforms. Before I conclude, I would like to take this opportunity to thank the entire BPCL team for their unwavering commitment and collective pursuit of excellence and growth. I also extend my sincere gratitude to the Ministry of Petroleum and Natural Gas, government officials, our valued customers vendor and business partners for their continued support, trust and confidence as we move forward in managing the lives of the country. Thank you.

Thank you, members of the management. Ladies and gentlemen, on behalf of Antique Stockbroking Limited, that concludes this conference. We thank you for joining us, and you may now disconnect your lines. Thank you.