Earnings call transcript: Indian Oil Q1 2025 results reveal revenue beat

Indian Oil Corporation Limited (IOC), a prominent player in the Oil, Gas & Consumable Fuels industry with a market capitalization of $78 billion, reported its first-quarter earnings for the fiscal year 2025-26, revealing a mixed bag of financial results. The company missed earnings per share (EPS) expectations, posting an EPS of 4.95 compared to the forecasted 5.26, marking a negative surprise of 5.89%. Despite this, IOC surpassed revenue expectations significantly, reporting 2.22 trillion INR against a forecast of 1.84 trillion INR, a 20.63% upside surprise. Following the earnings release, IOC’s stock price dropped 1.77% in pre-market trading, closing at 140.13 INR, reflecting investor concerns over the EPS miss. According to InvestingPro analysis, the stock currently appears undervalued based on their proprietary Fair Value model.

Key Takeaways

• IOC’s revenue exceeded expectations by 20.63%, despite an EPS miss.
• The company reported an inventory loss of INR 6,500 crore.
• IOC’s stock price fell 1.77% in pre-market trading.
• Expansion in green hydrogen and renewable energy is underway.
• Record sales of 26.33 million metric tons were achieved.

Company Performance

Indian Oil Corporation’s overall performance in Q1 2025-26 was marked by robust revenue growth, although profitability metrics lagged behind expectations. The company reported a profit after tax of INR 5,689 crore, down from INR 7,265 crore in the previous quarter. Despite these challenges, IOC’s operational highlights, such as record sales and strategic expansions, indicate a strong market presence.

Financial Highlights

• Revenue: 2.22 trillion INR, significantly above forecasts.
• Earnings per share: 4.95 INR, below the forecast of 5.26 INR.
• Gross refining margin: $2.5 per barrel (reported), $6.91 per barrel (normalized).

Earnings vs. Forecast

IOC’s actual EPS of 4.95 INR fell short of the forecasted 5.26 INR, resulting in a negative EPS surprise of 5.89%. However, the company’s revenue performance was a bright spot, exceeding expectations by 20.63%.

Market Reaction

The market reacted to the earnings miss with a 1.77% drop in IOC’s stock price during pre-market trading. Despite the revenue beat, investor sentiment was negatively influenced by the EPS miss and inventory losses. The stock remains closer to its 52-week high, indicating some resilience.

Outlook & Guidance

IOC is focusing on expanding its renewable energy portfolio, targeting 30 GW by 2030. The company plans to increase its retail outlets to 48,000 by FY 2027, with a CapEx guidance of INR 33,494 crore for FY 2025-26. Long-term strategic initiatives include refinery expansions and a significant push towards green hydrogen.

Executive Commentary

"We are pursuing a balanced portfolio approach, continuing to strengthen our conventional fuel business while making decisive moves into cleaner and more sustainable energy pathways," said Anujain, Director Finance. Nitin Kumar, CGM Corporate Finance, emphasized the focus on petrochemical integration, aiming to increase from 6% to 15%.

Risks and Challenges

• Inventory losses could continue to impact profitability.
• The EPS miss may weigh on investor confidence.
• Global oil price volatility poses a risk to margins.
• Execution risks associated with large-scale renewable projects.
• Potential geopolitical risks affecting crude sourcing.

Q&A

During the earnings call, analysts inquired about the impact of Russian crude discounts and the utilization rates of LNG terminals. IOC’s management highlighted the strategic importance of Russian crude, which constitutes 24% of sourcing, and discussed expectations for increased LNG terminal utilization.

Full transcript - Indian Oil Corporation Ltd (IOC) Q1 2026:

Unidentified Moderator, Conference Call Moderator, Antique Stock Broking Limited: Ladies and gentlemen, good day, and welcome to the Indian Oil Corporation Limited Q1 FY ’twenty six Results Conference Call hosted by Antique Stock Broking Limited. As a reminder, all participant lines will be in the listen only mode, and there will be an opportunity for you to ask questions after the presentation concludes. Please note that this conference is being recorded. I now hand the conference over to mister from Antique Stock Broking Limited. Thank you, and all to you, sir.

Thank you, Vico, and a very good morning to Arjiva. I’d like to welcome all the participants to this 1Q FY twenty six Indian Oil Conference Call. We have with us the management, represented by mister Anujain, director finance, mister Nitin Kumar, CGM corporate finance and treasury, mister Prabhupad Singh, CGM treasury, mister Prabhupad Singh, CGM finance and treasury. I’ll just hand over the call to mister Anujain for his opening remarks and then we can move to Q and A. Sir, floor is yours.

Yes. Thank you. Dear investors and analysts, a very good morning to all of you. I take this opportunity to welcome all of you to the conference call organized by us post announcement of the first quarter results of financial year twenty five-twenty six. I thank each one of you for joining the call.

I trust you have had an opportunity to review the accounts we have posted on our website and the 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, providing 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 oil and refining and marketing company. Friends, let me start with our quarterly performance. This quarter, we have registered a profit after tax of INR 5,689 crore, which was INR 7,265 crore in the preceding quarter and INR 2,643 crore in the corresponding quarter of financial year ’25. The decline from the last quarter was primarily on account of inventory losses, which we are going to discuss further.

Revenue from operations during this quarter stood at INR 218,608 crore. This marked an increase from INR 217,725 crore in Q4 of financial year twenty four-twenty five and from rupees 215,989 crore in the preceding, in the corresponding quarter of financial year twenty four-twenty five. On August 2025, the union cabinet has approved compensation amounting to rupees 30,000 crores to the three public sector oil marketing companies, Indian Oil, BPCN LPG, for the under recoveries incurred on sale of domestic LPG. We are yet to receive an official communication in this regard for further details and accounting, and more on the same was given in the condition results also. I am pleased to share our operational performance this quarter has been robust, surpassing several key benchmarks of previous quarters.

Our sales for the quarter were highest ever and many other operational achievements were made. This is a testament to the strength of our operating model, the agility of our team and the efficiency of our extensive distribution network. Since now, the operational and financial highlights will be reviewed by my colleague, Mr. Nithin Kumar, CTO of Corporate Finance and Treasury. Over to you, Nithin.

Thank you, sir. Good morning to you all. 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 company’s latest filings with regulatory authorities for a more detailed discussion on the risk and uncertainty. The past quarter has witnessed important developments, both globally and domestically.

On the interest rate front, the U. S. Federal Reserve has maintained the Federal Fund rate in the range of 4.25% to 4.5% through July 2025, reflecting the Fed’s cautious approach and with persistent uncertainty in inflation and growth outlook. In India, the Reserve Bank of India reduced the benchmark rate to 5.5% in May 2025, representing a cumulative cut of 100 basis points over the last six months. On the growth front, reaffirming India’s position as the world’s fastest growing major economy, IMF has revised its full card for India’s economic growth to 6.4% for both 2025 and 2026.

RBI has maintained its estimate of 6.5% for financial year twenty five-twenty six. S and P Global Ratings has upgraded India’s sovereign rating to BBB, underscoring the nation’s strong fundamentals and resilient growth. This strengthens investor confidence and support and supports better financing conditions for Indian corporates, including our own growth plans. For our sector, demand dynamics remain strong. As per PPRC data, India’s domestic consumption of petroleum products reached 61,650,000 metric tons in the last quarter of financial year twenty five-twenty six versus 50.5 in the preceding quarter, marking a growth of 2%.

This uptick was led by a sharp rise in diesel and gasoline consumption. For the current financial year, TPSC forecast 4.65% growth in domestic consumption of petroleum products. This continued expansion reinforces India’s role as a key driver of global oil demand in 2025. As the country’s largest oil refinery and marketer, we remain steadfast in our mission to ensure energy availability across the nation at affordable cost. Looking ahead, we have set ourselves the goal of increasing our share of the national energy basket from 9% today to point 5% by 02/1950.

This is aligned with expected doubling of India’s overall energy demand by mid-twenty. To achieve this, we are pursuing a balanced portfolio approach, continuing to strengthen our conventional civil business while making decisive moves into cleaner and more sustainable energy pathways. Our three major refinery expansion projects are progressing well and are on track for mechanical completion by 02/1936. With these expansions, the group refining capacity will increase from 80,800,000 metric tons per annum to 98,000,000 metric tons per annum, providing a critical boost to our ability to meet growing national demand and support India’s vision of energy self reliance. In parallel, we are investing in pipeline and marketing infrastructure to further fortify our supply and distribution network, ensuring that energy reaches every corner of the country efficiently.

We are simultaneously scaling up our petrochemical capacity as this remains a high potential growth area given India’s low per capita consumption and significant import dependence. Our objective is today’s petrochemical integration from the present 6% to 15% with a focus on niche and special chemical products. On the Clean Energy front, we are scaling up investments in electric mobility infrastructure, including EV charging and battery swapping stations alongside projects in natural gas, compressed biogas, biofuels and green hydrogen, including hydrogen mobility solutions. Thus, we anticipate a gradual tapering of expense on conventional assets with a growing share of our CapEx being directed towards petrochemicals and alternative energy segment, areas where we are making high conviction strategic investments for the future. We have begun this we have begun the new fiscal year with our strong strategic thrust through the launch of project Sprint, which transformational is road map to not only sustain but also accelerate our leadership in the energy sector.

Sprint represents the confluence of six strategic pillars, strengthening core business, cost leadership, customer centricity, cutting edge technology and innovation, development of the next generation of leadership and readiness for this energy transition. The idea is to move decisively beyond business as usual and position Illinois to reach greater heights while reinforcing our core strengths. Now let me briefly touch upon the quarterly performance highlights. Talking about a few numbers here. The average price of crude Indian basket during this quarter witnessed a reduction of about 12.4% from the immediately preceding quarter, that is ’25.

Various geopolitical factors starting from OPEC plus production adjustments, imposition of tariffs by the U. S. Government have contributed in cooling the crude oil prices. With respect to the crack spread, during Q1 of FY ’thirty five-’thirty six, both MS and HSD cracks have improved in comparison to the figures. In petrochemical space, the spreads of key products registered a marginal improvement during the quarter, though they continue to remain at subdued levels at a weak global economic outlook coupled with the addition of new capacities continue to exert pressure on petrochemical prices worldwide.

Now let me briefly touch upon the major verticals, refinery. I believe you all would have gone through the operational performance highlights updated on our website. The reported GRM of $2.5 per barrel during this quarter is lower than the previous quarter, mainly due to inventory losses. However, the normalized GRM for the quarter at $6.91 per barrel is better than the previous quarter of $5.39 per barrel. This the increase in GRM is attributable to the higher product tax spread during the quarter.

Pipeline, The capacity utilization was about 74% during this quarter as compared to 73% in the previous quarter. Pipeline throughput during the quarter is 26,300,000 metric tons vis a vis 25,800,000 metric tons in the previous quarter. Marketing. During the quarter, Indian Oil achieved highest ever total quarterly sale of 26,328,000 metric tons. During the quarter, four forty five retail outlets were commissioned, taking the total number of close to 14,656.

During financial year twenty five-twenty six, we plan to set up more than 4,000 retail outlets. Petrochemicals. The sale of petrochemical products, including exports, during this quarter was 830,000 metric tons similar to the preceding quarter quarter similar to the previous quarter of quarter account amounting to 830,000 metric tons, 830,000 metric tons. Yes. During the quarter, we registered natural gas sales of $15.44 TLT, that is 1,000 metric tons and CGT sales of 41 TNT as compared to natural gas sales of seventeen eighty seven TNT and CGT sales of 34 TNT during the preceding quarter, that is Q4 of financial year twenty four-thirty five.

We have entered into a long term sales and payment purchase agreement with ADNOC for supply of 1,000,000 metric ton per annum of LNG over a fifteen year period starting from twenty eight-twenty nine. Indian Oil and Trafigura Private Limited signed a confirmation of a random for the supply of approximately 400,000 metric ton per annum LNG from July 25 to December 2029 under Indian Oil’s first Henry Hub linked midterm contract. With the first LNG cargo delivered on twenty sixth on twentieth as of ’25 at the age. These are major steps towards enhancing India’s energy security and reducing exposure to the volatility of spot LNG market. Turning to expenses.

We have marked several technological and operational milestones this quarter. We have recently signed a landmark contract and hydrogen procurement agreement with LNG Green Energy Technology Limited for the establishment of 10 ktpa green hydrogen generation unit at our Panikas refinery. The expected completion time of the project is around two years. Indian Oil’s wholly owned green subsidiary, TheraClean Limited, has secured IFPF grid connectivity of thirteen fifty four megawatts to get capacity across India, land procurement activities and the progress. Our KaniKak refinery has become the first in the country to be certified to produce sustainable aviation fuel by converting huge cooking oil into jet fuel, a milestone in India’s green aviation efforts and our broader sustainability journey.

CapEx. During the quarter, the company incurred a total CapEx of INR 6,470 crores and surpassing investment across all verticals. For financial year twenty five-twenty six, the projected CapEx is 33,494 crore. These investments are aligned with our long term strategic roadmap and national energy priority. Borrowings.

With respect to the borrowing level, the borrowing as of thirtieth June twenty five has decreased by about INR 13,000 crore and is at INR 131,545 or INR $5.47 crore level as compared to INR 134,466 crores as on thirty first March twenty five. The decrease in the borrowings were mainly on account of year end excise duty payment. With the current debt to equity ratio of 0.66 as on thirtieth June twenty five, Indian Oil is comfortably placed to fund the ongoing CapEx plan. Let me take a pause here and requeue Director Paranj for his further remarks.

: Thank you,

Unidentified Moderator, Conference Call Moderator, Antique Stock Broking Limited: Nadeel. As we progress through financial year twenty twenty five-twenty twenty six, our priorities remain firmly anchored in operational excellence, disciplined capital allocation and strategic investments that not only reinforce our core strengths, but also position us at the forefront of the evolving energy landscape. 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. Thank you very much. We will now begin the question and answer session. Anyone who wishes to ask a question may press star and 1 on the touch tone telephone.

If you wish to remove yourself from the question queue, you may press star and 2. Participants are requested to use handsets while asking a question. Ladies and gentlemen, please wait for a moment while the question queue assembles. Our first question for today comes from Probal Sen with ICICI Securities. Please go ahead.

Yeah. Thank you for the opportunity, sir, from that. Yeah. Thank you. For the number.

Just wanted to understand how much of Russian crude did you process this quarter and what sort of discount? Obviously, the other one, you have already mentioned their own system. Just wanted to get your sense. See, as far as 2425 was concerned, we almost posted 22% Russian crude oil. Okay.

Which in quarter one, increased to 24%. Okay. And in the July and this quarter is still going on. And the discounts, as usual, everybody has said the same thing. It’s in a range of around $1.5 to the Dubai benchmark.

Got it. Sir, just the other thing again that was, you know, just to corroborate the inventory impact this quarter was because we had actually built our power through position, keeping in mind the geopolitical uncertainty. Is there anything else that you should be looking at because of the high inventory mark this quarter? Basically, I would say inventory levels are being maintained based on our shutdown schedules and other requirements. So this quarter, whenever you see Indian oil maintains quite high inventory because of our Randhof refinery.

So whenever the crude oil prices come down, we take a impact on our financial statement. So if you see, because this question will be asked by others also. This quarter, we had inventory loss of almost 6,500 crores. Whereas if you see the last q four last year, if we had a gain, all of the 10,000 crores was up. So primarily just to sort of understand this, essentially, this is related to our building of position based on our shutdown schedule, not because of any other reason.

That’s the reason why we got that. Other reason. It’s all normal inventory. We have been maintaining our normal inventory in our books of accounts. One more question if I can just slip in, which is the two targets that you mentioned.

Correct me if I got the numbers wrong. One was our goal of increasing share in Indian energy from nine to 12 and a half percent. And the second was the effective yield in our overall portfolio, sir, from six to 15%. Now I just wanted to understand the road map for getting there one and the timeline. I am sorry if I misplanned in the briefing.

What are the timeline for achieving these two targets? See, as far as increasing our energy basket share from to 12.5%, it is by 02/1950. Is a three, that was a major target set by the company. And actually, as you see, from our traditional refining and marketing business, we are also venting big into the sector. We are also venting into the renewable sector.

We are also investing into our all type of energies, which are strategically gas, CNG. So all these factors put together, we have ambitious target of high CapEx and definitely based on the outcome of the additional investment, we hope that we will be at around 12.5% of the total energy subsidy in the country. Right. And about the pet chem share, sir, again, that’s the same target, six to 15% in my 50 or that is an earlier target? So that will be somewhere around the I think it was 02/00/1930 plus minus one or two years.

So this target will be achieved much much before that. Because if you have seen that apart from the existing investment in that camp, we have also announced a big investment of almost 1,000,000,000 US dollars in the world’s heat, natural gas at Paradeep refinery. So that is also started. Got it. Sir, one last housekeeping question.

I didn’t quite catch the last number shared by in the operational briefing. What is the debt equity ratio that was mentioned? Right? Point six. Point six.

Point six six. Point six. And what is the kind of peak debt equity ratio given our higher CapEx over the next few years? What kind of fees we are looking at? Maybe let’s say by FY ’28 or ’29?

Generally, target to remain within one is to one debt equity ratio. Okay. So that will be the target. What we internally keep. Understood, sir.

Thank you so much for patiently answering my question.

: Thank you. Thank you.

Unidentified Moderator, Conference Call Moderator, Antique Stock Broking Limited: Thank you. Our next question comes from Sumit Rohra from Smart Sun Capital. Please go ahead. Yes. Sorry to interrupt you sir.

Mister mister Roha, sorry to interrupt you there sir. Sir, you’re not audible sir. May I request you to use your handset please? Okay. Sure.

Sure. Sure. Hi sir. Good morning firstly and I congratulate you and the entire team at Indian Oil for getting a wonderful job. Sir, I would like to basically, you know, just spend a couple of minutes, you know, to talk to you more on, you know, the investor angle.

Sir, you know, firstly, you know, it is very heartening, and congratulations to all the three companies in our downstream sector. You know, today, Corporate India posted a profit of 4 lakh 39,000 crore in the fourth quarter gone by. And the oil marketing companies have reported a profit of 16,000 crore plus, which is about 4.4% of India’s profit. Just the three companies. But, sir, here as an investor, I come in, you know, the market cap of the oil marketing companies is well under 1% of India.

So on a sustainable basis, you guys are doing about, you know, 3% of profit of India, but your market cap is just not improving, you know. If you just recall one thing, you know, in 02/2017, our market cap was 2 lakh crores, then our balance sheet was about 2 and a half lakh crores. Today, sir, our market cap is 2 lakh crores, but our mark our asset value has gone well above 5 lakh crores. So the one thing, you know, which clearly market tells us, you know, which we cannot ignore is the matter of fact is that market, you know, does not have clarity in the owning of the oil companies, which is actually happening, but the confidence element is clearly missing. Right?

Because our otherwise, you know, for seven year period, you know, the market cap cannot be same when the underlying business is growing so well. And it’s not only for you, it’s for all the three companies. So, you know, sir, as a management, you know, it it is our humble request that, you know, a market cap, you know, should be please consider, you know, in the evaluation because it is an integral part of every stakeholder, maybe an investor, maybe a shareholder, maybe it’s, you know, even the government because the government is a principal owner because ultimately, cap is all what matters. You know, at at the end of the day, you know, when you evaluate, you know, how much we got as a company giving. Sir, just on the question on the LPG point of view, so, you know, this press release has stated that this was for FY twenty five.

So is my understanding correct that the entire money would be accounted for in Q2, in spite of it being paid in front of this money would be accounted for in Q2? Your your clarity on that, sir, would, you know, go a long way in addressing many things, sir. Thank you. I will address your second question first. As far as the breakup of INR 30,000 crores is concerned, we are awaiting the final modalities to be received from MOPNG.

And accordingly, as per the unit cabinet has already given INR30000 crores. But how it will be shared and how much it will be given for which period, we are getting the final details from the MOPNG. So based on the communication from the ministry, we will be able to share further details with our investors. But I’m happy to say that there was a lot of concern in the past whether the oil companies will be getting this compensation or not. But again, back to back, government has supported on to the oil marketing companies on this front.

Initially, if you remember, out of INR28000 crores, we got INR22000 crores And now out of INR41000 crores, we got INR30000 crores. So I think this is a very good sign for the continued support from to the Oil Marketing Company. And coming to the first part where you said that market cap fee, for the past three years, you have seen further huge geopolitical factors affecting the oil and marketing companies. So I think that this is also one of the factors which is affecting the companies, how the investors see these oil marketing companies. But definitely on the operational front, I can definitely talk about internal that our operational parameters have been beyond our target.

And we have a rapidly ramped up of all our operational fronts and the projects. Another one thing I would share is a lot of projects got we started the project during COVID time. And now the projects are almost going to be completed. So this is a time we are spending a lot of money, but the income has not started coming in our P and L. So in next one year, you will see all the projects getting commissioned and the income start coming in our book of accounts.

So that should give a bigger comfort to our investors. Yes, thank you for that sir. But just one thing if I may add sir, you know the matter of fact that our cash flows are, you know, getting stronger as we as we go ahead, I would request that, you know, that you should, I mean, you know, consider a buyback, you know, because that will be very, you know, effective in boosting, you know, our EPS, our financial metrics. And also, it will be a it will be a sign of strength, you know, signifying that, you know, the way we are looking at our things. So I would say, I would request you, sir, a buyback should definitely be considered, sir.

Okay. Point noted, sir.

: Thank you. Thank you. Thank you, sir.

Unidentified Moderator, Conference Call Moderator, Antique Stock Broking Limited: Thank you. Our next question comes from Achal Shah from Ambit Capital. Please go ahead. Hi, sir. Am I audible?

Yeah. Sir, just wanted to understand about the aviation business. So currently, what is our market share, margin structure and what are the volumes we are doing? Can you shed some light on that broad number would help? As far as market share itself, sir, our market share is between 55% to 60%.

Keeps on varying from 55% to 60%. Okay, sir. Sir, about the margins, like how much are we making on EBITDA level or on a per leader basis? Is the reason. Don’t see margin on, see, we have an integrated margin.

That is why we come with a gross refining margin figures in our financial statement. But as a result, see the international market, the refining, the year end on the Asian side is quite robust. And the kind of growth the aviation business is seeing year on year, we are very bullish on the aviation business in our company. Sir, so like, is there any discounting to maintain the market share because tax rate has been positive, but the like, any idea on that point? See, yes, in any of the product, which is competitive, discounts are part of the game.

And it keeps on based on the market dynamics, we fine tune our strategy. But as such, what I am saying, there’s so much growth in the aviation sector that all the companies who are in the aviation business, they have a very robust growth going forward. And our company is very, very focused on the aviation business. This is one business which is going to see the maximum growth in the country. We have a refining expansion coming.

There also we are focusing on ABS production optimization also. Got it. Sir, just one more question on the throughput. So, sir, what is our throughput per outlet for, like, FY five or for 1Q FY ’twenty six? And, like, what are the steps we are taking to increase that that since EPC is leading on a throughput per outlet basis to to increase the throughput?

What are some steps you’re taking? See, my throughput is around one thirty. Sales per month. One thirty, one three zero. Is this a sale per month?

Sales per month, yes. And see, we are taking a lot of strategies as also shared with you for this sprint we have started, where we have one of the three target is one increase of PPT. How it will be done is, firstly, we targeting the mid selling retail outlets. Number two, we also seeing low selling retail outlets, how we can work with our channel partners to increase the sales of our retail outlets. And number three, we are also trying to commission new retail outlets in the segment, which are having a traditionally high purpose.

As you understand, if you compare the BPC or other oil marketing companies, Indemore has been going to the area where generally the throughputs are not high in the Northeast, in the remote area. So that is the strength of the company also that we are present in all the markets in a good strength. So it may affect my PPT, but it gives me a leverage to in cash. Whenever any expansions are required, any new putters has been introduced, any new expansions are there. We are also targeting few other expansion in.

We have already joined venture company in fertilizer sector. So I think we see all these things in a holistic business, where we will be able to in cash even though retail outlets where who doesn’t give higher PPT today. Sir, would we thinking of discounting? Pardon? Would we give additional discounts versus the other PSU and fees?

All the three oil marketing companies generally maintain the same pricing strategy in the market. That way, all the three marketing companies are aligned to each other. Sir, just one last question. What was on R and P gender recovery in 1Q FY ’twenty six and in August or currently what is the per cylinder loss under recovery? See, if you see the RPD under recovery in last, in Q1 financial year 2526, it was around in the range of 160 rupees to 165 per cylinder.

And today, it is in the range of 100 rupees to a 105 rupees per cylinder as of date. Okay, sir. Thank you. Thank you for your assistance. Thank you.

Thank you. Our next question comes from S Ramesh with Nirmal Bank’s Equities. Please go ahead. Good morning and thank you very much. Can you share the breakup of the inventory loss you mentioned between refining and marketing?

See see, the only I can give you indicative figure. It is around fifty fifty percentage. What would be the my loss in the food and the product side. And the total inventory now is 6,500 crores. The year is correct?

Yes. Yes. That is correct. So if you look at your gap business, the revenue Y o Y, if you look at last year, first quarter and this year, first quarter is more on the same. The 10% of the profits have cracked from $6.54 to 50 crores.

So what is happening there? Is there a loss in your LNG business? We know that the PGT business is not that big, so you may have had some challenges there. But what is happening on the LNG business? And going forward, how do you see the gas business perform both in this and your LNG business?

See, as far as gas business is concerned, that is one of the most profitable business for internal. The margins, you know, the international enterprises have been high of R and D in the past one quarter. So definitely, it affected our profitability. Okay. So what is the way forward?

How do you see the gas segment move from here in terms of the growth in your CDD business, yeah, in terms of the CapEx in CDD and the number of CNG stations there? See, if you segregate my gas segment, one is the LNG, is the CNG, that will continue to be a reasonably stable business for me. Number two is my LNG business for the industrial use. There the margins have come down because of the high pricing in the international market. The third segment, PGT segment, it is definitely becoming stronger day by day.

But as on day, it doesn’t give you a huge either profit or magnitude to my business. Okay. So can you share what is the kind of CapEx you wanna do in the stand alone CBDs? And what is the kind of growth in volumes you expect from the volumes you have shared for the first quarter over the next two years? Yeah.

Let me some give me one minute. See, as far as I’m concerned, we have a target of spending almost 22,000 crores in my total CapEx which I am envisaging in my CGD segment. Already, I have spent almost INR 4,000 to 5,000 crores as of date. And we aim to spend almost INR 1,000 crores each year in the CGT segment. We want to monetize our investments in the time to come.

And definitely, we will spend the money as the GA, we assume that the GA starts giving the money to me. But my predominant focus is my LNG segment LNG segment to the industrial use and also CLG business. Okay. So going back to LNG in your petrochemical business. So LNG, you have that terminal, you’re planning to expand that.

So how do you see the LNG economics going forward? What is the kind of breakeven you need? Because there’s a lot of competition from the new terminals at Damra and is talking about something in Gopal. In terms of your current, you know, cash flows from the terminal if you like to set some like in terms of what is the profit or loss you’re making? And how do you see that changing based on your expansion plan to 5,000,000 from 5,000,000 to 10,000,000 tonnes?

See, if I see my existing allot terminal capacity utilization, in ’twenty three, ’twenty four, it was on 18%, which went up to which became 25% in ’twenty four, ’twenty five. And this year, I’m expecting it to again go up to 31% to 32%. And by next year, it should be quite high because the way the infrastructure is getting related along with the terminal, our definitely the demand from the terminal will go high. Okay. So last one on petrochemical.

So we all know that the margins are under pressure globally. We have an integration plan in terms of increasing the share of petrochemical. So in terms of your competitive advantage, if you even say this, you know, a narrative about the domestic market being import dependent, what is the kind of cost leadership you’ll end based on your integrated capacities? Would you be there in the top 10% or 25% in terms of cost leadership? And would that be a competitive advantage to kind of ramp up the petrochemical business and cash flows?

Assuming that, you know, the excess capacity may not, you know, get mitigated because China keeps adding capacity. So that’s a clear overhang. So given that context, you know, how do you see you remaining competitive once your expansion plans are completed? See, as you all understand that petrochemicals, is huge demand in the country. I think there’s no doubt.

Number two, we also know that the petrochemicals is a natural integration for the Indian oil. We use our own NASA and other products for the petrochemical. Otherwise, we have to export those things. So instead exporting, if you see an integrated model, it makes much more logical for me to have a petrochemical expansion with a lot of refining expansions coming. Definitely, I would be having a raw material to feed my future petrochemical expansion.

So as far as the margin, yes, today, we are in the down cycle of the refining margin, petrochemical margins. But if you see petrochemical margins is generally always positive EBITDA positive for me. And if you see the general cycle, by the time my major spectrum expansions will come on board, we expect the cycle of spectrum to come back. Major all our companies are knowing that it’s a cyclical industry. And it’s whenever it becomes a positive cycle comes, then we will be happy to then get results from our huge investment.

Okay. So last time you had mentioned that your three refinery expansions are getting started by FY twenty seven. So if you see the expansion in bulk capacity and the increase in yield, what would be the delta and refining margins you can expect from the three refinery expansions from FY twenty twelve? If you see the delta margins, it will be very difficult to predict because it will see today the refining margins are so good. See see, it all depends on the international market.

But definitely, returns, whatever is my cost of capital, what is my, I’m definitely going to earn beyond that. So it will give me a positive margins on my investments. How much it will be given, it will be depending upon the international market. But if you see the total margin, it is quite robust. The margin Okay.

Thank you very much. Yeah. Thank you. Alright, sir. Thank you very much.

Enjoying the day. I wish you all the best.

: Thank you.

Unidentified Moderator, Conference Call Moderator, Antique Stock Broking Limited: Thank you. Our next question comes from with ICICI Securities. Please go ahead. My question already got answered. Thank you.

Thank you, sir. Our next question comes from Amit Muralsa with Axis Capital. Please go ahead. Yeah. Hi.

Thanks for the opportunity. Actually, I joined Paul a bit late. So sorry if I’m repeating this question, but could you provide the marketing inventory process in the quarter? Thank you. I apologize.

I’ll just share that during q one twenty five twenty six, I got a hit of 6,500 crores due to inventory losses. And if you see the quarter one of the previous year, it was a so the delta is almost 10,000 crores. Last six, you wanted 3,500 gain, you said? Yes. Sure.

And also on the on the good agenda refinery projects. So so what I understand is that Baroni comes next year, fiscal year, sometimes Q2, and the other refinery comes by end of this fiscal year. So is is that is that the current timeline as well or there is further change to that? See, as of now, our Pangipat and Gujarat is due to the commission in end of this year or first quarter of this calendar year. And then the Brownie GSC, you are right, is coming around August 26.

So the expansions will come in schedule. So the accordingly, our project will get scaled up. And what is the CapEx guidance for this year, ma’am? See, we have already targeted to spend INR34000 crores during the financial year ’twenty five, ’twenty six. And out of that, finally, almost take INR 14,000 to 15,000 crores.

And petrochemicals, marketing, pipeline, CGD, all put together, there will be another INR 15,000 to 16,000 crores. Understood. Just lastly on Russian crude discounts, so with these that has also come down. So could you just comment a bit on the discounts you kind of you could book in Q1? And what’s the outlook for the same in Q2 and ahead?

And also, the crude sourcing, has that been stopped now in the wake of the current situation with U. S? See, I shared these numbers before also that last year, ’twenty four, ’twenty five, we almost got 22% of the Russian crude. And during the ’5, ’twenty six, it is almost 24%. And this quarter, we are continuing to buy the Russian group depending upon the economics.

And the discount would be how much right now? It is $1.5. Okay. Okay. 0.522.

Yeah. Thank you so much,

: Yeah.

Unidentified Moderator, Conference Call Moderator, Antique Stock Broking Limited: Thank you. Our next question comes from Sumaya with. Please go ahead. Thanks for the opportunity, sir. So first question is on the refinery expansion.

So 18,000,000 ton expansion. So next year, roughly, what kind of incremental throughput that you’re looking at taking the ramp up into consideration? That’s the first part. Second, in terms of product split, what is the bitcoin intensity of this coming online? Diesel and petrol, if you could give some color in terms of our existing product mix versus the new refinery?

I will go one by one. First of all, Rami, see, it is due to the commission in August 26. And the delivery as per the past experience, it’s delivered, takes twenty four months for 100% capacity utilization. So that is the scale that is for belonging for both. Omnipat and Gujarat, they are expected to be commissioned by the end of this year.

And again, both the units, Gujarat and Farnipat will take around twenty four months post commissioning for achieving 100% additional throughput what we are targeting. Right? I will not be able to give the exact numbers, but yes, Farnipot extension is for 10 MMTPA, Gujarat is for 4.3 MMTPA, and Bologna is for additional three MMTPA. So the total almost 17.3 MMTPA will get added in these three mines. As far as the cost of freight is concerned, definitely, we are always SSDs and major components.

And as I shared earlier, MS and ATS, these are for the we try to maximize these speed for it. Altogether, MS, HSG and ADS should give me around 70%. Got it, sir. Sir, also on the CapEx run rate now that the refinery expansions are nearing completion. So how should we think about next couple of years, whether this $3,334,000 crores of run rate could be there or can it come off?

And also in marketing, you did mention that 4,000 outlets. How do we see intensity of outlet additions next couple of years? Can it can it come off? See, actually, you are correct that most of my money extensions will be over till by financial year 2627. Okay.

So then, but already I am, I have announced $1,000,000,000 petrochemical project in Paragi. So that will start I will start spending money on that CapEx. But yes, I would share one thing that we don’t have any specific targets to do any CapEx, but most of the we want to to remain the major energy player in country. So apart from the refining and petrochemical, we are also targeting additional investments into renewable sector now. We are targeting 30 gigawatt of renewable energy target by 02/1930.

So that for that, we have a 100% subsidy company also now. Apart from that, we are also investing hugely into gas sector. So all put together, my CapEx may not be 40,000, but yes, it should be around INR 30,000 crores in coming time till next four to five years. Got it, sir. Just a point on marketing retail outlets.

So this run rate of 4,000, should we expect it to kind of come off in the next few years or the same intensity kind of? No. It will come down. Definitely. Definitely, it will come down in the coming years.

Got it. And it will be based on the market demand also. See, it’s a highly competitive industry. We will have to see how the market performs. So definitely, we don’t have any I cannot give any specific numbers, but yes, based on the market dynamics, expect the number to slightly come down in.

Got it. Thank you. Our next question comes from who’s an investor. Please go ahead. Mister your line is being unmuted.

Hello? If there’s no response, we move to the next participant. Next question comes from Achal Shah from Ambit Capital. Please go ahead. Sir, thank you for taking the follow-up.

Just to note the current economic lending percentage and what is your take on current situation about the negativity on the lending for the car warranties and whatever is going on? See, we achieved a 99.99%, almost 20% target in twenty five, twenty six months. So we are fully able to achieve this target. Yeah. And, sir, like, is there any mandate or not to increase

Like, what’s your take on that? Like, currently, I think it’s 20%. So where do you think it it it can go in the next few years? See, we have the mandate was 30%, and we achieved a target of 20%. As of now, this is the target what we have been given and we are going to achieve that.

Sir, just one more question on the retail outlet expansion plan. Can you give a sense of how many outlets would we reach by FY 2020 and FY 2027 end? See, we are going to commission almost thousand. 40 We will be setting 48,000 retail outlets by the end of 3627.

: At ’27? Yeah. Okay. Thank you, sir. Thanks.

Unidentified Moderator, Conference Call Moderator, Antique Stock Broking Limited: Thank you. Our next question comes from Navnik Jaggi from Urbanax Inditech. Please go ahead. Yes, sir. Very good morning, sir.

Yeah. Hello?

: Yes, please.

Unidentified Moderator, Conference Call Moderator, Antique Stock Broking Limited: Sorry to interrupt you, sir. Maybe request that we the management will get in touch with you. Thank you, sir.

: Yeah.

Unidentified Moderator, Conference Call Moderator, Antique Stock Broking Limited: The next question comes from from Nirmal Bank Equity. Please go ahead. Thank you for the follow-up. So if you look at your other segment, so there there is a difference in terms of the losses being lower in the consolidated entity compared to the stand alone. But on Y o Y basis, there is a, you know, thing from profits to loss.

So if you can put the other business in context and you mentioned something in the annual report about cryogenics and explosives. So is there any potential for this performance to improve to profitable operations? And in terms of ROCE, would you be able to get double digit ROCE in the other activities? See our, if you see my other business activities, as per my account, this quarter, my profit before tax and interest is three twenty four negative, which was a pause, this was negative of $2.16 crores in quarter four twenty five, twenty four twenty five. So this has increased.

So basically, this is on account of other segment like E and P, we have other segment also. Yes, correct. And we have also done a write off of one of our E and P investment of $3.40 crores this quarter. So that was one time activity, which has resulted into a negative figure this time. If you see, last year, it was positive 24.34.

If you compare these two figures, there’s a onetime write off in our books of account. That has resulted into a negative of $3.74.46 crores in the Q1 twenty five twenty six. So do you see this segment getting into profitable operations on a full year basis? And you mentioned some plans for cryogenics and explosives in your annual report. So a lot of the explosive companies are, you know, actually doing fairly well.

So do you see your exclusive business also kind of getting to the growth trajectory? What are your plans in the other activities, including E and P, cryogenics and exposure? See, if I see my other business, see, definitely my credit limit as well, my profit business are positive contributor than my P and L. Okay? But other segments like E and P, depending upon the dynamics of crude oil dynamics, it becomes profitable a lot.

But definitely, the way we are adding our new renewable business, solar and wind, after one or two years, you will see huge revenues coming from that segment as well. But that’s coming through my subsidiary and JV companies. So it will be coming through that segment in my books of account. Okay. You might, if I may, within a last thought, on green hydrogen and the sustainable aviation fuel, if can you give us some visibility on the commercial aspect in terms of what will be the pricing and ROC, say, like, for the sustainable aviation fuel for the investments, how would you get the margins or return on capital?

Similarly for green hydrogen, would you depend on government subsidy or what will be the kind of economics for that investment? See, Indemal became the first company to set up such a large 10 ktpf project at the. And this is a captive usage. That means whatever hydrogen will be reduced, it will be used by my own refineries. So this is this is one of the very good and I think good investment by Indemore and that will kick start our future ambitious trend in the hydrogen sector.

As far as SAS is concerned, that is also you know this is a very upcoming sector. Whatever investments we will do, we are as per the prior report, we should be able to get returns on SAS investments also. So as far as SAS is concerned, it will be a profitable business for us. And as far as Green is concerned, as of now, it is a format. On this experience, my other commercial activities will start in future.

So the cost of Green hydrogen will be about in the 3 and a half to $4 per kg?

: Yes. You’re correct. Yeah.

Unidentified Moderator, Conference Call Moderator, Antique Stock Broking Limited: Okay, sir. Thank you. Wish you all the best. Thank you. Thank Our next question comes from from Sumangal Investments.

Please go ahead. Sir, what will be the CapEx for your Paradeep refinery where you are putting this petrochemical complex? And when it will start and when will it be commissioned? See, as of the total investment is in the rupee terms, if you talk about, is 50 almost INR 60,000 crores. And the budget is under the stage one as of now.

The various licensors have been appointed. So, it will take almost fifty four months from the investment approval. Okay. And so one small suggestion, sir, if you can put all your expenses with refinery wise or petrochemical, I call other other this oil marketing companies are doing stage wise, it will be better. Okay.

That I will be happy to provide. Thanks for the presentation. Yeah. Thank you.

: Yeah. Thank you.

Unidentified Moderator, Conference Call Moderator, Antique Stock Broking Limited: Thank you. Ladies and gentlemen, that was the last question for the day. As there are no further questions from the participants, I now hand the conference over to Mr. Varsharajan Sivasankaran from Antique Stockbrokers Limited for closing comments. I would like to hand the call to the management for their closing remarks after which I will leave.

Yeah. Thank you all for your time and insightful questions. On behalf of IUCL team, thank you once again for your continued trust and support. We look forward to engaging with you in our future interactions and keeping you updated on our progress. Thank you.

Stay safe and take care. Thanks. Thank you, sir. I wish to thank on behalf of I think all the participants as well as the management for answering all the questions and taking time out to attend this call. Thanks, everyone, and have a nice day.

: Thank you.

Unidentified Moderator, Conference Call Moderator, Antique Stock Broking Limited: On behalf of Antique Stockbrokers Limited, that concludes this conference. Thank you for joining us, and you may now disconnect your lines. Thank you.

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