Earnings call transcript: Bharat Petroleum Q1 2025 sees strong earnings beat

Bharat Petroleum Corporation Limited (BPCL), a prominent player in the Oil, Gas & Consumable Fuels industry with a market capitalization of $16.17 billion, reported a robust financial performance for the first quarter of 2025, surpassing analyst expectations with an earnings per share (EPS) of INR 7.52 against a forecast of INR 6.35. The company’s revenue reached INR 1,268.65 billion, exceeding the anticipated INR 1,102.80 billion. This positive earnings surprise led to a 5.41% increase in BPCL’s stock price during pre-market trading, with shares rising to INR 311.70 from INR 295.70. According to InvestingPro, the company maintains a "GREAT" financial health score of 3.11 out of 5.

Key Takeaways

• BPCL’s EPS of INR 7.52 significantly exceeded the forecast of INR 6.35.
• Revenue grew to INR 1,268.65 billion, beating expectations by over 15%.
• The company’s stock surged by 5.41% in pre-market trading.
• BPCL expanded its retail and EV infrastructure significantly in FY 2024-25.
• The company plans substantial capital expenditure in the coming years.

Company Performance

BPCL demonstrated strong performance in Q1 2025, driven by strategic expansions and operational efficiency. The company commissioned 1,805 new retail outlets and expanded its EV charging network to 6,563 stations, reflecting its commitment to growth and innovation. With annual revenue of $51.53 billion and EBITDA of $2.97 billion, BPCL’s domestic market sales increased by 1.82% year-over-year, while gas sales volume grew by 13.9%. InvestingPro analysis reveals 7 additional key insights about BPCL’s performance and potential, available to subscribers.

Financial Highlights

• Revenue: INR 1,268.65 billion, up from the forecasted INR 1,102.80 billion.
• Earnings per share: INR 7.52, compared to the forecast of INR 6.35.
• Profit After Tax (PAT): INR 3,214 crore.
• Standalone Net Worth: INR 809,060 crore.
• Final Dividend: INR 5 per share.

Earnings vs. Forecast

BPCL’s actual EPS of INR 7.52 outperformed the forecasted INR 6.35 by 18.43%. The revenue of INR 1,268.65 billion surpassed expectations by approximately 15.18%, highlighting the company’s ability to exceed market predictions significantly.

Market Reaction

Following the release of the earnings report, BPCL’s stock price rose by 5.41% in pre-market trading. The stock reached INR 311.70, moving closer to its 52-week high of INR 376. Trading at a P/E ratio of 10.1, InvestingPro analysis suggests the stock is currently undervalued. This positive market reaction reflects investor confidence in BPCL’s strategic direction and financial health, supported by a strong dividend yield of 5% and a 26-year track record of consistent dividend payments.

Outlook & Guidance

BPCL has outlined an ambitious capital expenditure plan, with INR 16,400 crore allocated for FY 2025 and an increase to INR 20,000 crore for FY 2026. The company aims to further ramp up CapEx to INR 25,000 crore in FY 2026-27 and INR 30,000 crore subsequently. Despite short-term obligations exceeding liquid assets with a current ratio of 0.8, BPCL is exploring a greenfield refinery project in Andhra Pradesh and anticipates the potential restart of its Mozambique project by July 2025. For detailed analysis of BPCL’s investment potential, access the comprehensive Pro Research Report available exclusively on InvestingPro.

Executive Commentary

"Our strategy is a long-term strategy to expand our network and provide good customer services," stated Vyaches Gupta, BPCL’s executive. Gupta also expressed optimism about government mechanisms for LPG compensation and highlighted the impact of crude prices on profitability.

Risks and Challenges

• Volatility in crude oil prices could impact refining margins.
• Potential delays in government compensation mechanisms for LPG.
• Expanding infrastructure may face regulatory and logistical hurdles.
• Global economic uncertainties could affect demand for petroleum products.
• Rising competition in the renewable energy sector.

Q&A

During the earnings call, analysts inquired about BPCL’s processing of Russian crude, which constituted 24% of Q4 and is expected to rise to 30-32%. Questions also focused on the company’s Gross Refining Margin, reported at $9 per barrel, and the anticipated government mechanism for LPG compensation.

Full transcript - Bharat Petroleum Corp. Ltd. (BPCL) Q4 2025:

Conference Operator: Please note that this conference is being recorded. I now hand the conference over to Mr. Valtarjan Shrivashankara from Antique Stock Broking Limited. Thank you, and over to you, sir.

Vyaches Gupta, Director of Finance, BPCL: Thank you, Sejal. A very good morning to all

Rahul, Chief Manager, Treasury and Insurance, BPCL: the participants and the management. I would like

Vyaches Gupta, Director of Finance, BPCL: to extend a very warm welcome to all the

Rahul, Chief Manager, Treasury and Insurance, BPCL: participants for taking time out to be in this call and the management for taking the time out to present us the scenario for Fortune. We have with us, mister director finance. Mister Pankaj Kumar, ED corporate finance. So CVPRV, ED corporate treasury, GM GM treasury, and insurance. And mister Rahul, chief manager, treasury and insurance.

I want to hand over the floor to Rahul for his strategy announcement followed by the initial remarks from the management. Rahul, please.

Vyaches Gupta, Director of Finance, BPCL: Thank you, sir. Good morning. On behalf of the VCCL team, I welcome you all to this post Q4 earnings call. Before we begin, I would like to mention that some of the statements that we will be making during this conference call are based on our assessment of the matter, and we believe that these statements are reasonable. However, their nature involves number of risks and uncertainties that may lead to different results.

Since this is a quarterly results review, please restrict your questions to Q4 results. I now request to our Director of Finance, Mr. Vyaches Gupta, who is heading the VP sales team for this conference call to make his opening remarks. Thank you and over to you sir. Thank you, Rahul.

Good morning, everyone. Welcome to the fourth quarter four results conference call. Thank you for joining us today. I hope you were able to go through our results for the quarter. On the macro side, the IMF has a global gross projections downward to 2.8% for 2025 from earlier projection of 3.33% for 2026, citing rising geopolitical tensions, trade disruptions and associated spillover effects, particularly in the context of intensifying U.

China dynamics. Despite global headwinds, India is expected to remain the fastest growing major economy, with projected GDP growth of 6.2% in FY twenty five-twenty six and six point three percent in FY twenty six-twenty seven, reflecting continued resilience and domestic demand momentum. India’s GDP growth is expected to range between 6.1% to 6.5% in FY twenty five-twenty six as per different agencies forecast. In twenty four-twenty five, India’s inflation is moderated to 4.6% with global oil prices easing. The RGA also lowered its inflation projection for 2526 to 4% from earlier estimate of 4.2%.

The INR and USD exchange rate fluctuated between eighty five point five eight and eighty seven point five nine during Q4, averaging at around 86.62. In April 2025, the same averaged at 85.57, aided by weaker U. S. Dollar, Tela’s currency devaluation, new tariff announcement and sustained FY inflows. In terms of crude, the IEA forecast a surplus of eight forty Bpd in 2025 and 2026, the second largest in the recent years.

Meanwhile, global oil demand growth forecast for 25 rpm revised downward by 0.1 to 0.4 MPT by major agencies, including the EAA, IEA and OpEx, largely due to economic uncertainty from rising trade tensions. Brent crude witnessed a sharp seven day swing in April 2025 triggered by a fresh U. S. Tariff announcement and an unexpected OPEC plus production hike. Prices are expected to remain volatile with Brent likely in the range of $68 per barrel for 2025.

The EAA projects India to increase its liquid fuel consumption by 0.3 MBPD in both ’twenty five and ’twenty six, up from 0.2 MBPD in ’twenty four, underscoring India’s leading contribution to global oil demand growth, primarily driven by rising transport fuel consumption. Domestic petroleum products demand grew by 4.3 in Q4, with petrol up by 5.9%, diesel up by 1.2% and the ATF up by 6.5%. Performance in Q4 of twenty four point two five. On operation side, our refineries cost was 10,580,000.00 metric ton of crude, achieving 121% of nameplate capacity and recorded the highest ever annual throughput of 40,510,000 metric ton. The distillate yield stood at 83.59% and product track for gasoline Singapore moderated to $6.02 per barrel from 6.44 in earlier period.

And for gas oil, $14.26 earlier $15.05 per barrel. Accordingly, our refineries recorded a of $9.2 per barrel in the current quarter at a premium to Singapore of 3.16 per barrel. On the marketing side, our domestic market sales grew by 1.82% year on year during Q4 to 13,420,000 metric tons with record annual sales of 52,400,000 metric tons. We achieved highest ever sales for lubricants of four seventy two CMP, including sales from our retail outlets during the year. Under Gas business, we have achieved a total sales volume of 2.2 MMT, up 13.9% year on year during the year for CNG, PNG and bulk sales.

We also commissioned two LNG stations at company owned and company controlled retail outlets in BP Agwunashi, Kolimbatore. This particular retail outlet has generated a sale of 71 metric tons. We continued to lead our pace in retail outlet throughput averaging 146 KA per month compared to the PSP average of 130 per month, enabled by strategic market access and robust highway presence. In April 2025, domestic LPG prices were increasing by INR 50 per cylinder, which resulted in decrease in underaccuracy and domestic LPG. The current underaccuracy per cylinder is estimated around INR 170 per cylinder.

The total negative buffer as on thirty first March twenty twenty five is INR 10,446 crore. We commissioned eighteen oh five new retail outlets during FY ’twenty four-’twenty five, expanding our network to 23,642 outlets. During the year, 5,546 outlets were SolarEdge, bringing our total ROS, SolarEdge ROS to 12,000 ROS. We are aggressively expanding our CNG fueling infrastructure with mechanical completion of three forty new CNG stations during twenty four-twenty five, taking total CNG network to 2,370. We added 3,313 EV charging stations during twenty four-twenty five, taking total EV network into 6,563 numbers.

We commissioned the Zemapur depot in Nagaland. This is our first purity depot in the Northeast, enhancing supply network connectivity in the region. In line with the government’s aim to ensure energy security of the country with a target of reducing import dependency by adopting biofuels as one of the major, we have achieved highest ever 19.35% of ethanol blending during Q4 twenty four-twenty five. We are expanding our foray into nonfuel services at our retail outlet through our in all state of the art cafe brand, B Cafe, where customers can experience government coffee and snacks and at the propensity of EV charging gadgets momentum. B Cafe would offer customers an upgraded convenience during their wait time.

We have commissioned 105 BKFA during twenty four-twenty five, taking total BKFA network to 111. Updates on new projects. Peanuts petrochemical and refinery expansion project has made steady progress, achieving an overall progress of 11% against a scheduled target of 10.9%. All technology licenses and consultants have been onboarded and process package for all units have been received. Detailed engineering activities are in progress, key tenders have been floated and site enabling works are nearing completion.

During the last quarter, the Board has approved INR 6,100 crores towards pre project activities, including land identification, feasibility studies and environmental assessment for greenfield refinery become petrochemical complex in Andhra Pradesh, the land acquisition, land procurement is in process. In continuing to the Board approval in the previous quarter, BPCL and SimCorp Green Hydrogen India Private Limited, a wholly owned subsidiary of SimCorp Industries, have entered into a joint venture agreement to jointly pursue opportunities in renewable energy and green hydrogen and its derivatives projects across India. This strategic partnership aims to support GEA’s energy transition and developmental goals. Further, BPCL and GPS Renewable Private Limited have entered into a joint venture agreement to establish competitive biogas plants across India. The joint venture will focus on converting organic biomass waste into competitive biogas by leveraging advanced waste to energy technologies.

The joint venture plans to establish three to 10 plants across Bihar, Odisha, Punjab, Uttar Pradesh and West Bengal for the next few years, which offer significant agribiomics potential for CVG production and aligned with BPSEL’s existing geographical location of city gas distribution. In a positive development, BPSEL Majam based project, USAxim, with the largest project financing commitment of USD 4,700,000,000.0, approved the decision to continue its participation in the project. Operator has informed that onshore main contractor CCS JV has issued full notice to proceed effective eighteenth April twenty twenty five to three key subcontractors to commence whose scope of work. This action is intended to facilitate full restart and force major resolution not later than by July 2025. Without further ado, let me guide you through the financial highlights of the quarter.

The revenue from operations stood at INR 1 lakh $26,008.55 crores. The profit after tax stood at INR 3,214 crores. Again, at an estimated CapEx of INR 16,400 crores for the financial year FY 2025, we have spent about INR $69,677 crores during this year. The capital expenditure expected for FY ’26 is about INR 20,000 crores. Our stand alone net worth as of thirty first March twenty twenty five is INR 809,060 crore.

The earnings per share for the quarter is INR 7.52 and for the full year is 31.07. As of March 25, the debt equity and at stand alone gross borrowing level is at 0.29. Overall stand alone gross borrowing is 23 to 78 crores. We have current investments including oil bonds of about $4.90 crores. So the debt equity, net of current investments is stand alone nearly 0.13 and at group level, the gross debt equity is at 0.63 and net of investment, it is at 0.45.

In order to reward our shareholders for the continued support, the Company has declared a final dividend of INR 5 per share in addition to the interim dividend of 5 per share. This concludes my comments, and we’ll be happy to take your questions now. Thank you.

Conference Operator: Thank you very much. We will now begin the question and answer session. Session. The first question is from the line of Praful Singh from ICICI Securities. Please go ahead.

Vyaches Gupta, Director of Finance, BPCL: Thank you for the opportunity. Very good morning, sir. Thanks for hosting the call. Firstly, on the refining performance, just wanted to understand the components of this $3 plus premium that we have done. Is it fair to assume that there is some inventory gain that was there in the quarter?

And the second part of this question is, did we have if we can just tell us what kind of Russian crude percentage was there even in fourth quarter in terms of overall crude sourcing? That was my first question. Yeah. From the refining side, we don’t generally calculate what will be the inventory gain because our average inventory is less than one month only. So we don’t calculate any separate inventory gain.

Generally, in the same month, we procure and we our throughput will be completed in the same month. So we don’t calculate inventory gain separately. But however, yes, definitely, the impact is mainly on account of Russian crude throughput and better refining margins. Q4, the Russian crude, 24% we have processed Russian crude out of the total throughput. Because in the q four, the availability of Russian cargo due to the new sanctions, we could not get the full cargo requirement.

So we could process percent. But over the current Russian cargoes, are getting sufficient cargoes now. So that number has basically gone up in q one? Yeah. Right.

Right. Right. Correct. So the second question was about the expansion projects. You know, in terms of the thought process, you have setting up yet another greenfield refinery.

Can we just get a little bit of sense of what the configuration could look like? What is the what kind of crude sources will be there for the refining and what sort of, you know, timelines we are looking at for commissioning for the Andhra Pradesh greenfield project? Let me clarify this project is refinery, some petrochemicals and not only greenfield refinery refinery plus petrochemicals with large petrochemical intensity. We are working two configurations, either nine MMT or 12 MMT, two trends we are working on it. Still the DFR studies are going on.

With the 40% petrochemical intensity, we are planning broadly, with four or 4.5 refinery products and around 3.4 to 3.8 petrochemicals. That is the basic configuration at nine MMT crane we are planning. And parallelly, we are working for 12 MMT crane also based on the final details, will take a call whether nine MMT or 12 MMT. So still the work is going on. Okay.

One And the timeline timeline Yeah. Timeline. So we are working forty eight months from the date of FID. Forty eight months from FID, as in when it will be done? FID, we are expecting maybe end of twenty five, maybe in the month of December or November.

Okay. Okay. One last question, if I may, sir. With respect to Mozambique, thank you for sharing that, you know, there is progress and there is forward movement. But we have also taken a 17,000,000,000 rupee impairment.

Can we just understand what which project this impairment relates to in this quarter? Every every year, we do the impairment testing again at our investment. Generally, if there is any project delay expected because, in fact, we were expecting the removal of the force majeure in the last year itself. But due to various reasons today, we could not uplift the force majeure, the operator could not uplift the force majeure. So due to which actually, there will be slight impairment in the cash flows and values now for mainly for only.

A little bit from the Brazil also resulted into impairment. And so the Mozambique so now, sir, we are expecting the force majeure to be lifted sometime in this calendar year? Does it look like probability? Do you want even even in the recent announcement by Total Energy’s CEO also, they were expecting the month of July, June, July, we are expecting. Because all all contractors are onboarded, project financing is they have agreed for continuous of project financing.

There is no hundreds now. And the local level, it cannot take you any much improve. So anytime the work can be start. Great, sir. Thank you so much.

I’ll come back if I have no question. Thank you, and all the best.

Conference Operator: Thank you. The next question is from the line of from MK Global Financial Services. Please go ahead.

Vyaches Gupta, Director of Finance, BPCL: Yeah. Good morning, and congratulations on a good set of numbers. So just a bit more on the refining margin side. So so we could understand, I mean, you have less than one month of inventories. But is it the same across all the refineries or for Bina, it is higher?

Because I think Bina reported the other was close to $15 And if I look into the various cracks and all, sequentially, it has come down only. And OSPs have also expanded, Russian discounts have also fallen to 24% like you have said, Russian crude share. So it’s the same impact across all three refineries or there could be, like, something related to inventory, especially on Bina? No. No.

Actually, three refineries configurations are totally different. Like, for example, if you take Bina, Bina can take more low sulfur crude and more Russian oros we can process. But in terms of Mumbai refinery, Mumbai refinery, we cannot take more than 15% of Russian crude. So that that all depends on the refinery configurations. So that is the reason always our Bina refinery, GRAMs are higher as compared to our own refineries of Mumbai Refinery.

That is one region. And secondly, even the yield, if you see the Bina, digital yield is more than in terms of percentage compared to other refineries. So this always results into higher GRs from Bina. And if the Indian refinery, if you see the structure, RCP structure, the realization will be slightly higher in Bina as compared to Mumbai Refinery. Right, sir.

So so in terms of refining margin guidance, so if we consider these these Q4 yields to, say, sustain over the next one year. So are we seeing, like, $9 here or you think it could be, like, some other range and some guidance on the year based on the current tax? Oh, it depends. It depends. So, one is the difference is the crude prices and spreads, even if we assume the spreads will continue at the same level.

One can expect, one can give, actually, quickly assume 7 to $9 range of the year and see if the spreads are continuing like this, if the Russian crude is available at 34% if we can process and having a discount of 3 to $4, these are the basic parameters. If these parameters continue, then definitely one can safely assume or refining margins will be another side. Right? And 3 to $4 is the current discount of Russian? Or is it like $3.

Around $3. Around 3, you can you can take 3.1, two point eight, you know. Every month, every month, varies. Some in the in in the month, it is coming around $3. Right.

Rahul, Chief Manager, Treasury and Insurance, BPCL: And and this light heavy switch

Vyaches Gupta, Director of Finance, BPCL: are that has also become more favorable now that OPEC is raising production or with respect to impact on Kochi Refinery in particular? Kochi Refinery, but definitely, it will have a good impact on Mumbai refinery. Kochi, now we take more only. Okay. So and Mumbai refinery will see some benefit from increasing OPEC production.

Hello? Yes. Yes. Right. Right.

Right. And just one small question on the marketing side. So you mentioned 170 rupees is the current under recovery, and I think LPG prices have also been quite sticky. It’s not fallen to the extent crude has fallen. So how do you see the overall cash flow scenario given that you’ll be doing INR 20,000 crore number?

And of course, now you’re making exceptional margins in petrol diesel. But any sense on we at a comfortable level or do we see debt going up or anything of that sort? No. Even if you see for 2425, even after absorbing up LPG under recovery, our cash flow will be how much around 13 plus two fifteen, 20 two, 20 two thousand is a gross cash inflow and 4,000 crore we have distributed as dividend, 18,000 crore is cash flow and our CapEx is almost 17,000 crore. So similar level, even we have a good CapEx number for next year of 20,000 crore.

We are hopeful there won’t be any any pressure on incremental borrowings, maybe thousand 2,000 crore here and there, there may be incremental borrowing. And at least this year, we are very hopeful there should be some mechanism in terms of LPG recoveries. Right. Some extent you are expecting in terms of LPG. Right?

Okay. Yeah. Yeah. Okay, sir. Thank you so much and all the

Conference Operator: Thank you. The next question is from the line of S Ramesh from Nirvan Bank Equities. Please go ahead.

Vyaches Gupta, Director of Finance, BPCL: Thank you very much and congratulations on your results. Sir, if you go back to the question on gross refining margin, sequentially the GRMs have improved across all the three refineries. So is it a function of, you know, the yields Or is there some benefit from the secondary processing units or the growth rate? Or how does that explain that the increase in the four two margins compared to 03/02 of FY twenty five? Yeah.

A couple of things. One is, if you see q four, our standard throughput is almost 10.5 at a moment. This is the highest ever throughput we have done. The plant reliability is much better as compared to q three. There is no shutdown issues.

There is no reliability issues. Our throughput is much much better compared to any other quarter. And secondly, even the yield is on the lower side, but overall, due to the spread, good spread and good digital output in the entire product portfolio, we could generate a good year also during this year. And the Russian, definitely Russian discount are helpful in the year. Okay.

So if you look ahead to FY ’twenty six based on the current retail spread and the current refining margins,

Rahul, Chief Manager, Treasury and Insurance, BPCL: Is

Vyaches Gupta, Director of Finance, BPCL: there any other, you lever you have in terms of growth in your EBITDA and profitability for FY ’26 as you look at the, you know, portfolio, including the industrial products other than petroleum diesel? No. Yeah. 05/25, ’20 ’6, everything depends on the crude prices, how it moves. At least in the short term, three months or six months period, we are hoping the crude will be hovering at these levels only.

There is no reason to increase the crude prices much beyond 70 levels, maybe 65 to 70 range or 60 to 65 range. It will continue. As long as crude is at this particular range, definitely the margin side, it is helpful for the ONCs. Okay. So on the CGD business, can you give us some sense in terms of what is the asset capitalized and how do you see the, you know, P and L for the CGD business moving on your stand alone GAs over the next one to two years?

So, our total CapEx expected CapEx for all the twenty six years is totally total commitment is 47,000 crores. But this is over a period of eight years. But already till date, we have spent around 7,600 crores already we have spent. And this year, for 2526, we are approximate 2,000. 2 thousand crore, we are capital for CGD business.

One good thing is that in the CGD, the volume growth is very good. In the current year itself, 2425, the GMV sales itself is 81% increase in terms of the volume. So this is one particular segment, the volumes are growing. And our CapEx is also continuously as per the plan, you know, our program we are receiving, at least in terms of CNG and industrial customers. We are a little bit behind in terms of CNG connection.

But overall, the overall, we are expecting good volumes and good expansion going to happen in.

Rahul, Chief Manager, Treasury and Insurance, BPCL: Thank you very much, sir.

Conference Operator: Thank you. The next question is from the line of from Morgan Stanley. Please go ahead.

Vyaches Gupta, Director of Finance, BPCL: Thank you for the call, sir. Two questions from my end. One was related to fuel marketing. If you look at over the last year or so, you have seen a bit of a decline in your market share on retail fuel market, especially on diesel and gasoline. And even on industrial side as well, suppose you have lost some market share.

How are you kind of thinking about from a strategy perspective in terms of the next few years on the market share and where do you think to kind of settle it on the transportation side specifically in terms of market share for you? Yeah. In terms of market share on a on a chart, maybe we have lost a little bit market share in the last couple of quarters. But as you see in the last five years continuously, our market share is growing. Because completing in terms of offering discounts.

We want to we want to provide good service to the customers and our object to and our strategy in expansion of the market share is mainly network network expansion and what better services we can do to the customer. That is the reason in the highways mainly we are focusing on the network expansion. And recently, we have acquired almost 100 WSSI, which is very large site where we can give good customer services and that we will appeal our focus. We are sure definitely the market share will come back and we’ll get our market share expansion going to happen. Because if you see in the earlier years, maybe two years back, the private sector participation was not there when the margins are not there.

Today, since the margins are very good, every private sector also, are grabbing a little bit of market share. But our strategy is a long term strategy is expand our network and provide good customer services and take digital initiatives and slowly, slowly, we will increase our market share. Got it, sir. And the second question was in terms of on the petrochemical side. Can you just give us a details around how much EBITDA and earnings you made on the on petrochemical?

So, PDP, production during 2425 is two fifty one PMT. It’s almost 76% of capacity utilization. Last year, it was only two thirty three PMT, almost 10% increase in terms of PDP to production sales. And gross production margin for Siktion was around five seventy nine crore means it is $0.55 per barrel. The contributed PDP, petrochemicals unit contributed $0.55 per barrel for the refinery for full year.

Got it. Thank you.

Conference Operator: Thank you. The next question is from the line of Sumit Rohrab from Smart Sun Capital. Please go ahead.

Vyaches Gupta, Director of Finance, BPCL: Hi, sir. Good morning, and thank you for the call. And sir, I would like to start by telling you that it’s been a commendable performance, you know, especially if you, you know, look at the LPG under recovery, what you absorb. Sir, I have a question very clearly, you know, as an investor on this point. I mean, if you see in FY ’twenty four, you know, we reported a profit after tax of about $2,425,000 crores.

And in this financial year, you’ve reported 13,000 crores after absorbing about 10,500. So sir, is my understanding correct that, you know, our profit profitability including LPG because obviously it’s a controlled product for governments will compensate you. It’s just a matter of time. So can we say that now, you know, our profits have reset to a new standard and, you know, we can assume that the profits which we reported over the last two years are sustainable profits over the next couple of years, sir? That’s my first question.

Let me let me clarify for FY 2324, the profits are high mainly because of the spread. That that year, if you see the GEARMs around $14 dollar per barrel. That time, during the particular year, the Russian response are around $8 per barrel, and the spreads are very high. I don’t think that that particular ecosystem will continue for a longer period of time, but this year is a moderated. In terms of spreads also, it has come to the closure to the last ten years average spread, it has come to that.

And reasonably, the Russian discount has come down to $3 per barrel. If these two parameters continue, definitely the refining margins will be better and the profitability we can say, it has maybe somewhere around a better level compared to the earlier year. Okay. And sir, on the LPG under recovery and the and the compensation, can you throw some light on, you know, when do you, you know, expect some amount of compensation from the government, sir? We are hopeful some mechanism definitive because after increase of 50 rupees, now the under recovery has come down every month.

We are expecting around $6.50 to 700 crore per month for BPCL. And we are hopeful some mechanism will be put in place so that maybe on quarterly basis, we can get the reimbursement whatever under report is. Okay. And sir, there is just one small point. When the Honorable Oil Minister had the press conference, at that point of time, he said that the LPG prices will be looked at on a monthly basis.

So can we assume that we are going towards a period where the could actually be reconsolved once it’s market where market aligns? No such communication at this point or no such discussion at any level. Okay. Thank you, sir. And wish you all the best.

Conference Operator: Thank you. The next question is from the line of Soumya from Aventis Park Institution Equities. Please go ahead.

Vyaches Gupta, Director of Finance, BPCL: Thanks for the opportunity, sir. The first question is on the CapEx. Can you refer to the run rate? You said this year, is 20,000 growth. How would you kind of move in next two, three years?

And also, in terms of projects, if you can give a broad split, Bina, where are how much have we spent so far? How much is remaining? And for the greenfield, when will the CapEx start ramping up? This year, our target for CapEx is around 20,000 crore. Maybe around 17,200 crore is a direct investment, around 2,700 crore equity investment through our JV.

So current year run rate, we are expecting around INR 20,000 crore for CapEx. But next year for ’twenty six, ’twenty three, we are expecting the CapEx will be INR 25,000 crore. And then the subsequent year, we are expecting around INR 30,000 crore. So from there, feel that keep the CapEx per INR 70 will happen. Otherwise, this year ’twenty, next year ’twenty five and subsequent year is INR 30,000.

Broadly, the major CapEx investment will go for CGB and our Mozambique expansion and Brazil expansion and for petrochemicals. These three are major areas our CapEx allocation is going to happen. And the current year, out of INR 20,000 crore CapEx, we have allocated around INR 5,900 crore for refinery and pipeline is around INR 2,400 crore. And marketing, five thousand six hundred crore, have allocated out of which INR 2,500 crore is for RO expansion. This is a broader capital allocation for this year.

Helpful, sir. Just one question for this 20,000,

Rahul, Chief Manager, Treasury and Insurance, BPCL: 20 5 thousand, and

Vyaches Gupta, Director of Finance, BPCL: 30,000. Within this, are we including anything for the greenfield or the greenfield will come at the latest? Yes. AP refinery, we are not included anything because once FID is approved by the board, then we will have that scheduled CapEx plan. But otherwise, whatever numbers we are giving, this is excluding the AP refinery project.

Got it, sir. Sir, also on your crude sourcing, you did mention about the Russian crude sourcing mix change Q o Q. If you could just help on to the other crude sources, let’s say, Q3 versus Q4, broadly, what was the mix change there? Q3, Russian was 34% and Q4, it is 24%. And from Saudi, Q3 is 19% and Q4 is 21%, slightly 2% increase.

And Abu Dhabi, Eighteen Percent to 16% down. And Iraq is around 10%. And Oman, Q3 is 1% and Q4 is 7%. And U. S.

WTA Q3 was 13%, whereas Q4 is a unit 5%. Because this percentage varies every quarter on quarter depends on what commercially available crude is available. For example, if the Russian crude discounts are better and more crudely available, Russian will take more crude. So WDA discounts are available commercially, which is feasible for the refinery and which gives more value to the refinery accordingly, we take those sources. These sources vary every quarter on quarter.

Sure, The detailed breakup is quite helpful, sir. Just one small clarification on the Petchem margin, gross margins that you said. At at EBITDA level, would it be positive? At gross margin, you said 5,009 growth at EBITDA level, would we be positive there? EBITDA level positive.

EBITDA level is definitely positive, but after differentiation, including the marketing margin, it is positive.

Rahul, Chief Manager, Treasury and Insurance, BPCL: Thank you.

Conference Operator: Thank you. The next question is from the line of from CLSA. Please go ahead.

Rahul, Chief Manager, Treasury and Insurance, BPCL: Thanks for taking my question, sir. Sir, I have two of them. Firstly, on Mozambique, now that the project is possibly looking like it’s coming back to life, what assuming that the July timeline holds in terms of work starting, Could you please kind of give a sense of how things are likely to progress in terms of timeline? We’re looking at how many trends by when they are likely to come. Also, are I mean, do we have to find fresh contracts or the old MOUs are are still relevant, valid?

Plus, very broad guess on how much is the cost escalation gone for the project.

Vyaches Gupta, Director of Finance, BPCL: One year, the contract sale, most of the contract in the project side, it is valid as on this. And every contractor, they have agreed and the major contractor, they have even notified to the subcontract to restart the work any point of time. So on the project side, the contracts are valid. On the sales side, all FTAs are valid. Certain FTAs have been revised, but some some quantity says the operator has taken the commitment.

So on the FTAs side also, there is no issue. On the project financing side, the major lender as of The U. S. Bank, they have initially committed 4,700,000,000. In the month of March, U.

Bank also, they have agreed for continuation of the project finance. So all these three are intact. Now anytime they can restart the work. And the project time range, the operator is still committed. Operator, confirming they can complete the project by July 28.

That was the original schedule in the recent days what they have announced. Maybe we have to wait and see after the reschedule the project, they may do the revised schedule if any changes. And the likely CapEx inflation due and Initial project in April is $15,400,000,000. But after that, one year back, operator indicated that the value costing will be around $19,400,000,000. That was the latest 60,000,000 they have given.

Rahul, Chief Manager, Treasury and Insurance, BPCL: That’s for how many trains? That’s 10,000,000 tons?

Vyaches Gupta, Director of Finance, BPCL: That’s right. Two trains. Two trains. Six point trains.

Rahul, Chief Manager, Treasury and Insurance, BPCL: Nine point six 9,000,000 tons.

Vyaches Gupta, Director of Finance, BPCL: Right? Yes. 9,000,000. It’s 17.1. 13 point six point o, six point five.

Rahul, Chief Manager, Treasury and Insurance, BPCL: Oh, sorry. Okay. 6161. That’s 65. 6 1.

13 +1 313000000. 13 Okay. Okay. And, sir, just on this, you know, the you’re you’re currently at about on Russian crude, you said about 24% is where you are. Now with crude prices themselves flirting with $60 or so, the Russian crude price is now well below the cap and all of that.

How does that really change pricing over there? Does that automatically since since it’s below the cap, it can be sold more freely without you know, with less of trouble and less of the worries on insurance, etcetera. Does that typically impact the discount on Russian crude? I mean, does it take it down, I mean, over this period?

Vyaches Gupta, Director of Finance, BPCL: If the Russian crude available, I send the price cap, then there will be more buyers. So definitely, what you are expecting, there may be a reduction in response, but the other one there is still discount of this, $33 discounts are there. But definitely, there are new buyers are coming for Russian crude even in fact, recently that Turkey is buying more crude and Syria is buying more crude from Russia. So the availability for Indian buyers are slightly, they’re reduced. That was the reason on the last quarter, it was 24%, but slightly, this quarter, it will improve.

We are expecting out of total throughput, maybe 30 to 32% Russian crude steel, can process availability point of view.

Rahul, Chief Manager, Treasury and Insurance, BPCL: Okay. And sir, just last thing on, and you know, I I I am cognizant of the fact that you do not would, you do not calculate inventory losses separately. But just for our understanding, since DRMs have been and the premium to Singapore has also been so volatile in the last few quarters, you clocked about $9 this time. In the current market environment, how should we I mean, are you in that ballpark even today in terms of how things have changed? Because we are a little surprised from $5.6, how things have jumped to $9, where Singapore hasn’t really changed that much.

So, I mean, just to kind of get a sense, is the current kind of margins tracking something similar? Or, of course, there could be

Vyaches Gupta, Director of Finance, BPCL: an element of inventory loss which would have come up in April, but Reasonably, the spreads are good. Even today also, the spreads are hovering at good levels. And the Russian product

This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.