Indian Oil Corporation Limited (IOC) Earnings Call Transcript & Summary

Ladies and gentlemen, good day, and welcome to Indian Oil Corporation Limited 2Q Results Conference Call hosted by Antique Stock Broking Limited. [Operator Instructions] Please note that this conference is being recorded. I now hand the conference over to Mr. Varatharajan. Thank you, and over to you, sir.

Thank you, [ Sapthali. ] Very good afternoon, everyone. At the outset, I would like to welcome all the participants and the top management of Indian Oil Corporation to this 2Q results call. We have with us Mr. Anuj Jain, Director, Finance; Mr. Nitin Kumar, CGM, I/C (Corporate Finance & Treasury); Mr. Pramod Jain, CGM (Treasury); Mr. Prabhat Himatsingka, CGM (Finance & Treasury). I'd like to hand over the call to Mr. Anuj Jain for his opening remarks, and we'll then move on to the Q&A.

Yes. Thank you, Mr. Varatharajan. Dear investors and analysts, a very good afternoon to all of you and warm greetings for the festival season. I take this opportunity to welcome all of you to the conference call organized by us post announcement of the second quarterly results of financial year '25-'26. I thank each one of you for joining the call. I trust you have had an opportunity to review the results we have posted on our website, exchanges and updates that have been shared with most of you. In today's call, we would like to walk you through our performance for the quarter gone by, provide some insights on the broader macroeconomic context and also share with you the strategic initiatives we are pursuing to strengthen our position as India's largest energy company. Let me start with our quarterly performance. This quarter, we have registered a profit after tax of INR 7,610 crores, higher than the preceding quarter, which was INR 5,689 crores. From a half year perspective, the PAT is INR 13,299 crores as against INR 2,823 crores in H1 financial year '25. Revenue from operations during this quarter stood at INR 2,02,992 crores as against INR 2,18,608 crores in the preceding quarter of this year. The above normal rainfall in the country has impacted the sales volume for the quarter. The revenues for the corresponding quarter of FY '25 was INR 1,95,149 crores. On 8th August 2025, the union cabinet approved compensation of INR 30,000 crores to the 3 public sector OMCs for under recoveries incurred on sale of domestic LPG. As per communication received from MoPNG, IOC share in the compensation is INR 14,486 crores. The compensation amount will be disbursed in 12 monthly installments of INR 1,207 crores starting November 2025. Accordingly, revenue to the extent of accrual on a monthly basis will be recognized in the relevant periods. The strategic initiative of Project SPRINT has started showing improvements with green shoots visible in operational and financial performances. Now for the operational and financial highlights, I will request my colleague, Shri Nitin Kumar, CGM in charge, CF and Treasury, to brief you. Thank you.

Thank you, sir. Kindly note that today's discussion may include forward-looking statements, which are based on currently available information, assumptions and expectations and are subject to uncertainties that could cause actual results, performance or achievements to differ materially from those expressed or implied. Participants are advised to refer to the company's latest filings with regulatory authorities for a more detailed discussion on the risks and uncertainties. The past quarter has witnessed important developments both globally and domestically. On the global monetary front, the U.S. Fed delivered its first rate cut of 25 basis points for the year, bringing the rate down to the range of 4% to 4.25%. The Fed's updated projections signal the possibility of further reductions in 2025 underscoring a shift from a primarily inflation fighting instance to growth and labor market support. In India, the Reserve Bank of India held its policy repo rate steady at 5.5%, maintaining a neutral instance as the impact of earlier cuts continue to play out. On the growth front, IMF raised India's '25-'26 GDP growth forecast to 6.6% from 6.4%, following a strong 7.8% growth in Q1 of financial year '26. For Indian Oil, the past few months have been particularly significant. On 20th September 2025, Prime Minister, Narendra Modi inaugurated Indian Oil's acrylics and oxo-alcohol plant at Vadodara's Gujarat refinery, boosting India's drive for petrochemical self-reliance using propylene to make high-value products. We started trials of [indiscernible] CO2-PF technology at Digboi Refinery, converting waste plastics like PP, PE/PP and multilayer packaging into fuels, showcasing our sustainable and scalable innovation. Our Paradip refinery commissioned a new hydrogen generation unit, enhancing cleaner fuel production and supporting energy efficiency and sustainability goals. S&P Global has assigned Indian Oil a BBB long-term rating equivalent to India's sovereign rating. This follows S&P's recent upgrade of India's sovereign rating and reflects our strong financial fundamentals, disciplined capital management and resilient performance amid a volatile global environment. Now let me briefly touch upon the quarterly performance highlights. Talking about the numbers. The average price of crude Indian basket during this quarter witnessed an increase of about 4.2% from the immediately preceding quarter, that is Q1 of financial year '25-'26. The increase in crude oil prices quarter-on-quarter is largely due to geopolitical risks and stockpiling by China. Accelerated unwinding of production cuts by OPEC+ helped in keeping the increments in limits. With respect to the crack spreads, while HSD cracks improved during Q2 of '25-'26, MS cracks were lower than the previous quarter. In the petrochemical space, the spreads of key product continue to remain at subdued levels due to weak global demand growth, new capacity additions and volatile feedstocks -- feedstock prices. Now let me briefly touch upon the major verticals, refineries. The reported GRM of $10.66 per barrel during this quarter is higher than the previous quarter. The normalized GRM for this quarter at $8.9 per barrel has also outperformed the previous quarter of $6.91 per barrel. The increase in GRM is attributable to higher product crack spread of HSD during the quarter. The throughput during the quarter was at 17.6 MMT with a capacity utilization of 99.5% in comparison to throughput of 18.7 MMT and capacity utilization of 106.7% during Q1 of financial year '25-'26. Pipeline: The capacity utilization was about 67% during this quarter as compared to 74% in the previous quarter. Pipeline throughput during Q2 of '25-'26 is 24.1 MMT vis-a-vis 26.3 million metric tonne during Q1 of '25-'26. The Gujarat refinery shutdown has impacted the refinery and pipeline throughput for this quarter. Marketing: Total product sales during the quarter was 24.262 MMT as compared to the sale of 26.32 MMT during the previous quarter, that is Q1 of '25-'26. We know that the oil and gas sector is sensitive to seasonality and the above normal rainfall during this monsoon in India has impacted the volumes of major products in the quarter. However, with the strong and sustained demand for petroleum products across the country, we expect a significant improvement in our performance in Q3 and Q4, positioning us for a stronger finish to the year. On a half yearly basis, sales have improved. That is 50.590 MMT in H1 of '25-'26 vis-a-vis 48.213 MMT in H1 of financial year '24-'25. During Q2 of financial year '25-'26, 597 retail outlets were commissioned, taking the total number to 41,263. Our lube business achieved 21% growth in total lube sales and 11% growth in automotive lubes. During H1 of financial year '25-'26, our lube market share achieved 9% growth among PSUs and 5% growth among industry. Petrochemicals: The sale of petrochemical products, including exports during this quarter was 0.77 million -- MMT as compared to 0.83 MMT in the preceding quarter. Sales for Q2 of financial year '24-'25 was 0.77 MMT. On a half yearly basis, petrochemical sales in HY of '25-'26 was 1.602 MMT were more than the sales recorded in H1 of '24-'25, which was at 1.517 MMT. Gas: During the year, we registered highest quarterly gas sales of 1.840 MMT, which includes CGD sales of 44 TMT as compared to total gas sales of 1,685 TMT. It includes CGD sales of 41 TMT during the preceding quarter. That is Q1 of financial year '25/'26. On 1st August 2025, Indian Oil and Trafigura Private Limited signed a confirmation memorandum for the supply of approximately 0.4 MMTPA LNG from July 2025 to December 2029 under Indian Oil's first Henry Hub-linked midterm contract with the first LNG cargo delivered on 10 August 2025 at Dahej. Biofuels and Renewable Energy: During April to September 2025, we have achieved ethanol blending percentage of 19.85% on all-India basis, which is slightly higher than the industry blending percentage of 19.83%. The company is working to develop 31 gigawatt of renewable energy by 2030. The same will be achieved through wholly owned green subsidiary, Terra Clean Limited and JV company with NTPC Green Energy Limited. We are setting up the country's largest green hydrogen plant of 10 KTA at Panipat refinery. To promote hydrogen mobility, we have set up India's first hydrogen dispensing station at our R&D center in Faridabad, followed by the station in Gujarat refinery, where field trials on fuel cell buses are being undertaken. Indian Oil has introduced 15 hydrogen fuel cell buses along with Tata Motors Limited for operational testing in Delhi/NCR and Gujarat regions. Indian Oil will develop 2 new hydrogen dispensing stations along Mumbai, Pune and Jamshedpur-Balasore corridor. We are also undertaking viability study for Hyundai NEXO hydrogen fuel cell electric vehicle, FCEV through 2-year real-world test. Indian Oil and Air India have signed a memorandum of understanding for the supply of SAF that is sustainable aviation fuel from December 2025. Further, with Indian Oil being the only certified company to produce SAF from used cooking oil, a rate contract has been finalized for the supply of treated used cooking oil to enhance SAF blending. CapEx: During April to September 2025, the company incurred a total CapEx of INR 15,890 crores, encompassing investment across all verticals. The budgeted CapEx target for the financial year '25-'26 is INR 33,494 crores. These investments are aligned with our long-term strategic road map and national energy priorities. Borrowings: With respect to the borrowing levels, the borrowings as on 30th September 2025 has increased by about INR 6,692 crores, and is at INR 1,28,239 crores level as compared to INR 1,31,547 crores as on 30th June 2025. The increase in the borrowing was mainly on account of working capital changes and foreign exchange translation. With the current debt-to-equity ratio of 0.68 as on 30th September 2025, Indian Oil is comfortably placed to fund the ongoing CapEx plans. And let me take a pause here and request Director of Finance for his further remarks.

Thank you, Nitin. Despite global volatilities, uncertainties and evolving market challenges, Indian Oil stands resilient and future-ready. Guided by our unwavering commitment to the nation's energy security and supported by the strong operational capabilities, integrated value chain and an agile workforce, we will continue to power India's growth story. As the country's energy needs expand, we remain firmly focused on ensuring reliable, sustainable and uninterrupted energy supply while advancing our vision of building a greener and more self-reliant energy future for India. I extend my sincere gratitude to our shareholders, employees, partners and all stakeholders for their unwavering trust and support. With this strong foundation, we are confident in our ability to deliver sustainable value and long-term growth even in the face of a dynamic and challenging external environment. I will end my briefing here. We will now take your questions. Thank you.

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

I had a couple of questions. First was with respect to the LPG recognition, I believe the CFO sir mentioned that this will be recognized on an accrual basis in revenue or else, do you know -- I just wanted to reconfirm that. It will not be shown as other income, but it will be recognized as revenue. Is that correct?

Yes.

So every month, the proportionate installment will be basically booked as revenues on the LPG front, right?

Yes.

And just another follow-up on the same thing. What is the loss per cylinder that we saw in Q2? And what is the loss per cylinder right now, if you can get a sense?

As on date, the loss is around INR 40 per cylinder.

Okay. And in Q2, sir, what was the number?

Q2, almost it was INR 100 per cylinder.

Q2 was INR 100, and it has dropped drastically to about INR 40 per cylinder right now.

Yes.

Third question, sir, was on the refining margins, the kind of outperformance that we have seen. Is there a significant amount of Russian crude that is still there in percentage terms, is it possible to share how much of Russian crude was there in Q2?

In Q2, we have been maintaining somewhere around 18% to 19% in that range in Q2.

And the discount is down to somewhere around $2 to $3. Is that understanding correct, sir?

Discount has been consistent over the past 5, 6 months. There's no major changes on durables in the past 5, 6 months.

And that's around $2 to $3 a barrel?

Yes, yes.

Okay. So sir, I just wanted to understand, if we look at the benchmark margins, if you can indulge me for a minute, the calculated margins seem to be a bit lower. So I mean, just the diesel cracks is actually helping offset negative discounts for all the other products. Is that what we are really seeing? Or is it refinery efficiency also that's playing out in terms of such a robust GRM performance for this quarter?

If we talk about the refining performance, the cracks of HSD has been quite good. If I talk about the HSD cracks, it is -- the crack is more than -- it was around 10 last year, which has been 14 this year. And the MS also last year, it was 4. Now it is almost 6. So the cracks of both MS, HSD, which are the significant portion of our product, they have a very high margins, coupled with we have a very good operational performance also. So in all the parameters, I think there were good margins for the refining sector.

Right. One last question, again, a clarification, sir. I couldn't catch the commentary. How much is the LNG supply agreement with Trafigura? And what are the terms of that in terms of pricing?

Yes, just a minute.

Yes. So the term is supply of approximately 0.4 MMTPA per annum, right, of LNG from July 2025 onwards through December '29.

July '25 to December '29.

[Operator Instructions] The next question is from the line of [ Sumit Arora ] from Samson Capital.

Sir, firstly, I would like to congratulate you and your entire team at Indian Oil for posting a superb set of results and also seasons greetings for you, though it's a bit too late. Sir, now firstly, I would like to just touch upon a few things to you as an investor. Sir, today, it is very heartening to see your presentation SPRINT. And in that Indian Oil is about 3% of India's GDP. Now sir, India -- 3% of India's GDP is nearly INR 12 lakh crores, okay? And today, if you look at it from an investor angle, our market cap is around INR 2 lakh crore, INR 2.5 lakh crore. I mean, INR 2 lakh crore rather in spite of having an asset base of nearly INR 5.5 lakh crores. Today, sir, it is a proud fact for India that about 3.5 crore Indians use the Indian Oil fuel pump on a daily basis. So I mean, very clearly, on one side of the equation, you're doing a fantastic role on energy security of India, the consumers of India are using. But sir, as an investor or as the India's national asset, the company is not being valued. I mean, today, having a market cap of nearly INR 2,10,000 crores is clearly -- is not in the right spectrum of things because today, our valuation is being valued like a commodity company. But the matter of fact is that you are a consumer company, right, because 3.5 crore Indians use it. I mean you are 2% of India's corporate profit. I mean, sir, today India makes about [ INR 50,000 crores ] and Indian Oil makes about INR 35,000 crores. But the matter of fact is that there is some disconnect somewhere where Indian Oil and rather the oil marketing companies are not getting the valuation, which they should get. As a matter of fact that the government of India has also now paid the LPG money of the INR 30,000 crores, which you highlighted monthly is going to come. So sir, I mean, the fact of the matter is that these are very valuable companies, but somehow the market is not getting the confidence in the earnings. So I would, sir, request you to please give the market some confidence on the earnings aspect because otherwise, a market which stays at 22p, there should be absolutely no reason why not only Indian Oil, but all the oil marketing companies say that sub-6p with ROEs of 22%. So I would really request you that the management should explicitly give market more confidence on earnings because even the refining cycle is in your favor, crude is in your favor, Government of India is in your favor. The company is doing very well. But somehow the investors are not getting the confidence. So I would only humbly request you to please give some confidence because you guys are doing a super job. I mean, so there's nothing I have to ask you because Russian crude, sir, whether it's 15%, 20%, it's all optics, right? Because it's going to move the needle hardly a few crores here or there. So please give the market confidence is all I request you. I wish you all the best. Good luck and God best you all sir.

Thank you. I think you have given my answer itself that the 4 factors, crude is in the favor, refining margins are quite good. Government has been quite supportive. Overall ecosystem is quite supportive of the oil and gas sector today. So I think, Sumit, you have already given the positive news what I wanted to give to the people. And I feel that given the performance we had in Q2 and the other factors what you mentioned, we should have a good profitability for this year. Thank you.

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

I have 2 questions. So the first one is an update on the Project SPRINT, especially with respect to the cost-saving initiative that you highlighted. If I remember correctly, you had said that you would be able to optimize your costs by around 20% and you had given some time lines as well. If you could give us an update on that and more granular details of where these cost savings have come and how we should think about the operating costs, say, for FY '26 overall and '27? That is question one. My second question is on the Panipat refinery expansion progress. Where does it stand currently? And what is the refinery throughput on a stand-alone basis that we should assume for fiscal '26 and '27?

See, I think the Project SPRINT is not only for the revenue expenditure, it is for the capital expenditure as well. What we are doing is to optimize wherever, whether it's CapEx or revenue, both sides, we are trying to optimize. So as far as the specific numbers are concerned, I think we are still -- we started our journey from April, and it is a 3-year project. So it will not be possible for me to give you a specific number because many expenses in the initial months would have got deferred, which might come in the second half. But I would be sharing that what we are assuming that it should be a very, very positive way of reducing our cost. And -- but as on date, it will be difficult for me to share any specific number because it's an ongoing year. So the things have been -- we are discussing with the teams and teams are working to optimize. But I will say the cost is being optimized, not only on retail, it is on LPG, it is on aviation, operations. So all the major verticals of Indian Oil refining, pipelines, marketing are working to reduce the cost. What the target has been given is to reduce the cost by 20% of the bolstered numbers. That target has been given, but we all have a budget which are on the higher side. So all in all, I would say maybe by third quarter end, we will be able to give you some specific figures. As far as the Panipat is concerned, we are expecting that the funding should come on commissioning by June '26. And the basic capacity is 10 MMTPA. So the first year, generally, we assume that it should give me a 60% throughput of the total capacity. And today, almost 90% physical progress we have already obtained. So in other words, as far as the -- as I said, June '26, for that, already 90% of the work has been done. So in next now 7, 8 months, balance 10% other activities will be done. And in first year, we should expect 60% of the installed capacity.

Just one follow-up. If you could perhaps give us some sort of guidance on the refinery throughput that we should be budgeting for FY '26 and '27. Last year, it was 71.6 MMTPA. Do you have any rough cut sense in mind given that there are multiple refinery projects with varying stages of progress. So it would be easy for us to track you and assess the company's performance thereof.

Okay. Just give me 1 minute. I will be able to give you the numbers. So basically, what we are seeing that -- just 1 minute. See, normally, our capacity utilization remains more than 100%, okay? So if my installed capacity as far as '25/'26 is concerned, which is going on because all the commissionings are coming next year. So if I talk about Indian Oil alone, it should be around 72 MMTPA, 73 MMTPA something. So my installed capacity is around 72 MMTPA. I'm talking about only Indian Oil as a stand-alone, not including CPCL.

Right, right. And sir, do you have any thought process in mind as to what the throughput will be for '26 and '27? You can perhaps discuss and maybe revert on this later, no problem.

Okay. But '26/'27 should be higher than the 4 to 5 MMTPA.

The next question is from the line of [ Puneet ] from HSBC.

My first question is on the petchem side. We haven't seen any material increase in petchem margins per se, but you've been able to demonstrate a nice uptick and return to profitability at EBIT side. Can you talk about the reasons for the same?

I feel we had some shutdown -- units under shutdown last year, which are now working this year. So as such, our quantum has gone up. But on a whole, I think the petchem margins still remain constrained. We are still seeing that the margins have not improved much, but we hope that in times to come, the petchem margins will also go up.

Okay. But you should think that for the rest of the year, we should be on a positive number for petchem as well?

Positive numbers are positive. In any case, we have a positive contribution to our EBITDA. Only thing is the type of margins we have seen in the past, we are not seeing it today. We earned more than INR 2,000 crores petchem margin during the 6 months. It was almost 25% -- 33% higher than the last year because of the improved margins this year.

Okay. And can you also give us a breakup for your CapEx plan for this year?

See, CapEx, we have always been sharing that our will be approximately INR 33,000 crores for the FY '25/'26. And if you want some major projects, I can share with you.

Yes major projects and also your CapEx towards renewables, if you can talk a bit that.

See, you can notice refining would be almost INR 14,000 crores. And marketing and pipelines put together would be another INR 10,000 crores. My petchem should be around INR 2,500 crores. And now coming to specifically what you're asking for my renewables, see, a lot of renewables are going through a joint venture and subsidiary mechanism in our system. So we do equity contribution in that. And we expect to contribute almost INR 2,000 crores in those JVs and subsidiaries this year. In any way, once we give the money to them, there is a JV partner who brings the additional money, then there would be a debt funding also. So from my internal book, it should be around INR 2,000 crores for the financial year '25/'26.

Understood. And then there is only one JV, right, with the NTPC or is there more that you form now?

No, we have a subsidiary company called Terra Clean, which is 100% like NTPC Green, we have also opened a company. So we are having a big target for that company.

So there is no specific CapEx for Terra Clean?

We have a target for -- Terra Clean itself has a target of 30 gigawatt by 2030. So if you break up each year, they should be commissioning 4 to 5 gigawatt of power by that. So the targets are very well defined. But since we have started the journey, maybe 1 or 2 years, the activities will go on, but the outcome will not come. But our equity funding will go from our side.

Understood. That's very helpful. And lastly, if you can just elaborate a bit more on the GRM side. Other than the better diesel cracks, what else would you attribute your expansion of margin to?

See, predominantly, if this quarter is concerned, it has been a better operational performance also. And it is also due to my better cracks. Refining cracks have been quite good this year. So -- and I would also share with you if I have some other things. See, we have also have more of a -- because we sometimes gain on the freight side also because we are taking both on a DAP and FOB basis. And sometimes we are taking from DAP basis, that also gives me a positive margin, which was also positive for this quarter.

Okay. And is that sustainable?

See, I told you it is all shipping -- freight market is quite volatile because we also have a time charter vessels. So it all depends upon the -- because when we do a tender, we give open offer, whether you want to give us on FOB basis or delivered basis. So depending upon the optimization of the seller, we get the benefit.

Understood. And lastly, if you can tell what is the crude from Russia for the current quarter so far?

I just shared with you in the beginning itself that it is around 19%.

Okay. So same run rate continues from the previous quarter?

So quarter 1 was higher. Now quarter 2 is slightly down because overall throughput is down. Normally, the quarter 2 throughput is always down because of the rainfall.

And the quarter 3, I mean, the October 1.

October has just started. We are still continuing to procure the Russian crude.

The next question is from the line of Yogesh Patil from Dolat Capital.

Questions are mostly related to the understanding of the LPG under recoveries and the over-recoveries. In our result note, categorically mentioned that LPG compensation will cover the losses till the end of FY '26. So whatever under recoveries in the first half FY '26 will be the part of that compensation, and we will not get any separate compensation for the first half FY '26 amount. Is that a correct understanding?

See, what we have been informed that government has, as of now given INR 30,000 crores under recovery for the under recoveries on LPG. So we are still -- LPG is a controlled product. okay? So as of now, they have given INR 30,000 crores, but we continue to get engaged with the government, and we will definitely pursue for the under-recoveries of the balance amount because MoPNG is also maintaining always that it's a continuous account because now the Saudi CP has come down. So we may not have a huge under-recoveries in the next few months. And in the past also, we have seen in some months, we get an over-recovery also. So we will -- government will take a situation on a cumulative basis at the end of the financial year '25/'26. And then we will see what will be the situation.

So we will have a window to ask them for the FY '26 under recoveries if it...

Yes, it would be there.

So the windows will be open. Okay. Sir, quickly, the second question is related to what exactly you mentioned the Saudi CP has come down. And from the next month, it is declining 6%. So definitely, LPG under-recoveries will be nil. Is that a correct understanding from the next month?

No, it won't be nil. It won't be nil.

It would be hardly INR 10, INR 12, correct?

No, no, it should be more than that. I think it should be around INR 25 to INR 30.

Okay. And lastly, suppose from here, from November onwards, if it falls below 10%, 20% again, then the over-recoveries would be there, okay? And in that case, that same over-recoveries can be settled against the under-recoveries of the first half FY '26? Can you just expand?

Continuous account. I just said they will see on a cumulative basis. They don't see on a month-to-month basis. At the end of the financial year '25/'26, they will take a total position, what has been the under-recovery of '24/'25; '25'26, what has been given to us, and then they will take a call.

Okay. So sir, lastly, just let me reframe my question. Suppose after December 2025, we start earning the over-recoveries on the sale of domestic LPG and that over-recoveries or kind of a profit will be transferred to the buffer account. As you mentioned that this is a running account, buffer account is a running account and the settlement will be a continuous process. So do we need any kind of a permission from the government to take out that profits or over-recoveries on that buffer account and settle on our historical under-recovery. Do we need any kind of MoPNG permissions or the government permissions to settle this account?

See, these are the account which is we submit our -- all the oil marketing companies submit our figures to the MoPNG. In any case, everything is decided on LPG, you understand LPG is a controlled product even today. So everything we have to submit based on our submission, they will take a decision.

Okay. So the Ministry and the Petroleum Ministry and the government will take a decision on that side.

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

Sir, my first question is with respect to your lubricant division. So can you give us the sales number for the entire first half, your lubricant sales? And what percentage of that was auto sales and the same for FY '25 as well?

Basically, normally, we give the total numbers, what I can share with you. See, as far as within the PSU segment, Indian Oil commands 48% market share. So you want exact numbers?

Yes, sir, exact number would be good if we can have the number for first half and FY '25 in terms of what was the total lubricant sales and also what was the automotive component out of it. So the automotive component.

I will get it e-mailed to you. Fine.

Sure.

I will get it e-mailed to you. I can say the market share of Indian Oil amongst the PSUs, we are almost 48%.

Among PSUs, you have 48% you mentioned.

Yes. Normally in the range of 360 metric tonne to 430. That is the range what we do. I will give it to you. I will send it to you.

Sure, sir. And sir, my second question -- sure, sir. I'll connect back with you for the details on e-mail, sir, certainly. And sir, on the CapEx guidance front, as you indicated that your annual CapEx to INR 34,000 crores -- INR 33,000 crores, INR 34,000 crores. So in light of Project SPRINT, would it be reasonable for us to assume that like once you have realized the gains of Project SPRINT, your CapEx should actually come down by 20%. Would that be a right assessment?

See, there are 2 parts of the CapEx. One is the project, big projects, okay? In any case, we don't -- that is independent -- that the return is what we have to spend. We have also a lot of maintenance CapEx what we do. So we have 3,000 retail outlets pan-India. So we continuously invest money in upgradation and those things. And we have so many other refineries, 9 refineries, 20,000 kilometers. So you see the existing size itself demand a lot of maintenance CapEx on them, all replacement CapEx. So what we are trying to do is maximize our CapEx on the new investments, but try to optimize on our existing CapEx actually. So this is what the strategy is.

So I understood sir. What percentage of your CapEx is actually the maintenance CapEx, if we can have a rough ballpark around that?

So this will be very difficult. See, now if you talk today, a lot of big projects are going on. So that CapEx percentage would be down. It may be 10% to 15% today. But when the project gets commissioned, okay? And so this percentage may go up. It all depends how much CapEx we are incurring on the new extensions and those things.

Sir, I'm just trying to get an understanding around what kind of a CapEx saving we can perhaps see on an ongoing regular basis once your Project SPRINT optimization like materializes. If you could spend some...yes.

Generally we should be spending INR 30,000 crores to INR 40,000 crores going forward together ourselves or with our JV subsidiary, where we put some equity investments. Together, we should be in the range of INR 30,000 crores to INR 40,000 crores.

The next question is from the line of Vikash Jain from CLSA.

So 2, 3 questions. First is accounting for this LPG reimbursement. So we've kind of -- the government has already promised, given us a schedule of this is how the money is going to come. Doesn't it mean that it gets accrued to us? So shouldn't it be accounted for immediately itself that it is just getting paid at a delayed way? Like this is exactly how it used to happen at the time of oil bonds also, there was a promise and then they were paid. So why have we -- any particular reason why we have chosen a different kind of accounting more or less like cash accounting instead of where it gets accrued?

Vikash, see, LPG is a controlled product, and we are guided by the communication received from the Ministry. As of now, it has been conveyed to us that the income will be accrued to the company on a monthly basis. So based on the communication we have received, we have to account for whenever the accrual happens to the oil marketing companies.

Okay. So basically, the payment will be whatever your amount is INR 14,500 crores roughly divided by 12. That's equally paid every month starting November. Is that how you expect it to happen? Is that how it is promised to be paid out?

See, the interpretation is the government will communicate the accrual on accrual basis, whatever is to be given to us. And accordingly, we will be doing the accounting. And -- but the way we see that it should be covering us on a monthly basis, the amount which has been informed to oil marketing companies.

So it's equally divided through 12 months. That's what you think.

I don't have an exact, but yes, it should be like that.

Okay. So we will only come to know the exact amount for November when it is communicated, right?

See as of now, you can consider the amount in equal installment. But if it changes, we have to change our accounting thereafter. But as of now, we have also estimated the same amount in our cash flow.

Okay. Understood. And in terms of the other 2 refinery expansions that you have is Gujarat and Barauni, like you gave an update on Panipat. Could you just provide a similar kind of an update on them? When is it expected? By when do you think you can -- how the ramp-up would be to get to full capacity, both for the main CDU as well as the upgrader units further?

See, as far as the expansion in Gujarat is concerned, that is also expected to come in the month of June '26. And Barauni expansion will start commissioning in stages with effect from August '26. So both the commissionings are following in the next financial year. And the physical progress, if I see generally in our company, we see how much progress has been made. So in Gujarat refinery, we almost touch 84% physical progress and in Barauni, 88%. So for us, these numbers are very important to see how much percentage physical progress has been done on the site. Once it reaches 100%, the commissioning activities will commence -- and then here and there a few months, it gets commissioned.

Okay. And should we, as a thumb rule, assume that the first 12 months after commissioning, the utilization of the incremental capacity will be about 60%?

Yes. This is a standard what most of the -- we have been following 60% first year. And depending upon the successful -- sometimes 80%, sometimes 100% also because these are expansion of brownfield. Generally, on greenfield, we consider 60%, 80%, 100%. But since these are expansions, we are expecting 60% first year and trying to improve beyond 80% in the second year.

Okay. And sir, although we -- typically, it gets talked about in terms of CDU utilization, but refining margins only come when upgrader units also ramp up. So for each of these refineries, by when do you think after commissioning, would the real gains of -- on refining margins be visible? Would it be almost like 4, 5 quarters plus from...

It should be a much before that because these are all expansion of our existing refineries. So the way we are configuring it when the primary units are running because these are all going to be connected with many of our existing units, utilities. So the ramp-up should be quite -- that is a strategy also to have a brownfield expansion. That is the idea behind exact that we should have a quicker upgradation.

Okay. And sir, other than these 3 very clear volume expansions that the company is doing in refining, are there any other projects which are in advanced stages at this juncture, either in petchem or in refining that -- and if you could give an update on that in terms of where we are.

Now we have a major PX-PTA contracts at Paradip refinery, which is costing almost INR 14,000 crores. And the commissioning is expected in the third quarter of '26-'27. And then we have another plant in Panipat Poly Butadiene rubber plant. That is a INR 3,000 crore plant. Here also, we are expecting by June '26 that it should get commissioned. And even in PX-PTA, the physical progress is almost 90% now. And then PBR plant at Panipat, the physical progress is now almost 70%. And apart from that, we have -- since we have a refining system coming, we are spending on the pipelines from Mundra to Panipat, that is a INR 10,000 crore project. We are upgrading new refinery -- new pipelines. So small, small, many other CapEx projects are going on.

Sure, sir. And just finally...

I am so sorry to interrupt in between Mr. Vikash, you may rejoin the queue for the following questions.

Sure. Okay.

[Operator Instructions] Moving further, the next question comes from the line of Sabri Hazarika from Emkay Global Financial Service.

Yes. Sir, just 2 questions, one small one. So firstly, this acrylic plant, you said when was it commissioned?

It was commissioned in the month of July.

And can you give the unit economics of this plant in terms of how much was the CapEx and what revenue and EBITDA you are building it, also a realistic revenue and EBITDA given the current cycle?

Okay. Just give me 1 minute. Since it got commissioned, I have not kept the figures. Give me 1 minute. Have you any other question by the time I...

Second question is this Ennore-Tuticorin-Bangalore pipeline. So this pipeline is completely ready? Or is there anything pending here? Has it been connected to the national grid?

As per my information, not -- as of now, not -- it has not been connected.

So Bangalore part is not connected. So it is still stranded only towards Tamil Nadu, right?

Yes.

Okay.

So as far as Oxo-alcohol/Acrylics project is concerned, it has costed me INR 6,000 crores.

INR 6,000 crores, okay.

Yes. Yes.

And how much revenue are you thinking of adding from this?

Normally, if you see any project should give me a return of around 11%. So for your working, whenever we commission based on my CapEx, you can build in the revenue of 11% in your working. And generally, the ramp-up is around 60% in the first year again, and petchem should come to around 80% till next year and third year, 100%.

11% to 12% project IRR, is that right?

You can keep it at 11% as of now because the margins are quite subdued in all the petchem cycle.

Right. Sir, just one small follow-up, which I think the previous participant asked. So right now, if I see the buffer, so your buffer is, say, INR 26,000 crores, but buffer -- negative buffer is INR 26,000 crores. But in Q1, say, you have made INR 3,700 crores loss; in Q2, it was down to INR 2,100 crores. Suppose in Q3, you make a profit of, say, INR 500 crores. So that INR 500 crores will directly accrue to your P&L or it will be zero?

It will be adjusted against the under-recoveries incurred in the past quarter.

So that INR 500 crores will directly come to your P&L, right? And I would say...

As I said, we suppose 2 quarters, we have an under-recovery and third quarter, we have an over-recovery. When we see the total cumulative end of March '26, everything will be got together.

Yes. So whatever is pending will get accounted in the books at the end of March?

That will be ask from the government to give us the compensation.

I'm just wondering if there could be a positive impact from that if -- since the negative impact...

Even though the positive comes, it will get adjusted against the past under-recoveries suffered.

Yes. But for that quarter, it will be positive only.

But it will be not taken in my P&L.

It will not be taken in your P&L, right? So it will be zero or negative. But if the compensation comes, then it will come as a separate thing only, not from here.

Yes. Suppose the overrecovery happens, it will be shown as a payable.

Okay. It will be shown as a payable despite the fact that you have got outstanding?

Yes.

The next question is from the line of Amit Murarka from Axis Capital.

Just on inventory loss, could you give the total loss number in the quarter? Or was it a gain if it was a gain?

See, I will -- as I have said that in this quarter 2, we had a gain. And quarter 1, we had a loss. On a cumulative basis, we still have an inventory loss.

Could you quantify that? I think Q1, you had mentioned INR 6,500 crores of loss.

So basically, just excuse me, my colleague will be answering this query to you or we will send it to you through e-mail. Can you go to the second question because we have to just finish it in a few minutes. We will send it across to you.

Sure, sure. Also on the Russian crude, like I think there was a comment made that you would be complying with the sanctions. So I believe you buy from the spot market, so which do not have a designated I mean, source when you buy it like that. So does it mean that you would be avoiding Russian crude completely given that the spot market do not distinguish between the source of the crude?

No. See, we are not absolutely not going to discontinue as long as we are doing the compliance of the sanctions. Today, from Russia, Russian crude is not sanctioned. It is the entities and the shipping lines, which have got sanctioned. So today, somebody comes to me, which is a non-sanctioned entity and the cap is being complied with the shipping is okay, then I will continue to buy it.

But do you know the source of the crude when you're buying from the spot market?

Yes, yes. Certificate of origin is a part of the standard documents being taken for the bank whenever you make the payments.

Okay. Got it. Okay. Okay. Fine. So as of now, like there's no -- I mean, avoidance of Russian crude. It's just that those 2 entities you would avoid from essentially.

Apart from these 2 entities, there have been entities in the past also. So we maintain all the data bank and when we purchase, we ensure that we comply with all the international sanctions, whatever appear on that date.

The next question is from the line of Maulik Patel from Equirus.

Just one question. In the last 3 years, you have bought approximately 4.4 million tonnes of a medium-term LNG. 2 deals, I think you have done on an oil link one with ADNOC [indiscernible] total, I'm not sure. And third, which you have signed recently with 0.4 MMTPA with Trafigura on HS basis. So this 2.4 million tonnes of LNG, which you are going to get, you're going to use it internally on your refineries? And what you are going to market in the market?

See, we have both the portfolios. We sell it internally also. We sell it to our customers also. So we have a multiple source of buying, and we have a multiple source of selling our LNG.

But is there any strategy that you want to use more of the gas internally because the contract which you have signed are significantly lower than the current spot price. Spot is currently at $11, we are getting at around $12.5 for those crude linked volumes. The price will be at around $9 somewhere on a DES basis. Will you use more of the gas internally for refinery and the cracking or utilities?

See, we have -- for everything, we have optimization. Suppose in our refinery, we have a demand and we have a demand from the customer. I will see what is the alternate cost of my fuel if I use it in my own fuel in that system. So if my -- using my own fuel, I can sell it outside, why not? But if I have a cost -- it is all depending upon the cost of their own fuel also in the refining system. So that is a day-to-day work what our teams do. They will always see whether it is more beneficial to sell or it is more beneficial to consume it internally.

Okay.

Okay. Thank you. I think we can finish it now.

Ladies and gentlemen, that was the last question for today. I would now like to hand the conference over to Mr. Varatharajan for closing comments.

Thank you, Sapthali. Sir, if you have any closing remarks, please go ahead.

Yes. Thank you all for your time and insightful questions. On behalf of the entire Indian Oil team, I appreciate your continued trust, confidence and support. We value your engagement and look forward to future interactions and keeping you updated on our progress. Stay safe and take care. Thank you.

Thank you, sir. I wish to thank the IOCL management for giving us the opportunity to host the call and thank all the participants for taking out time to attend this call. Thanks, everyone. Have a nice day.

Thank you very much.

Thank you. On behalf of Indian Oil Corporation Limited, that concludes this conference. Thank you for joining us today, and you may now disconnect your lines.