Indian Oil Corporation Limited (IOC) Q4 2026 Earnings Call Transcript

Ladies and gentlemen, good day and welcome to Q4 and FI26 on a conference call of Indian Oil Corporation Limited hosted by Antic Stock Broking. This conference call may contain forward-looking statements about the company, which are based on the beliefs, opinions, and expectations of the company as on date of this call. These statements are not the guarantee of future performance and involve risk and uncertainties that are difficult to predict. As a reminder, all participant line will be in the lesson only mode, and there will be opportunity for you to ask questions after the presentation concludes. Should you need assistance during the conference call, please signal an operator by pressing star then zero on your touchtone phone. Please note that this conference is being recorded. I now hand the conference over to Mr. Bharat Rajan Sivasankaran. Thank you and over to you soon.

Thank you, Danish. A very good afternoon to all the participants and the management of Indian Oil Corporation. I'd like to extend a very long welcome to all the participants and the management of Indian Oil Corporation for this conference call to discuss the fourth quarter FA26 numbers. We have with us management of Indian Oil Corporation represented by Mr. Anuj Jain, Director of Finance, Mr. Nitin Kumar, ED Corporate Finance and Treasury, Mr. Pramod Jain, CGM Treasury. Without much ado, I would like to hand away the call to Mr. Amir Jain for his opening remarks. The floor is yours, sir.

Yes, thank you. Good afternoon, everyone. Dear investors and analysts, a very good afternoon to all of you. I take this opportunity to welcome all of you to the conference call organized by us post-announcement of the fourth quarterly results of financial year 2025-26. I thank each one of you for joining the call. I trust you have had an opportunity to review the results we have posted on our website, exchanges and the updates that have been shared with all of you. In today's call, we would like to walk you through our performance for the quarter gone by. Provide some insights on the broader macroeconomic context and also share with you the strategic initiatives we are pursuing to strengthen our position as India's largest energy company. Before I move to the operational and financial highlights, let me briefly touch upon the evolving geopolitical developments and their implications for the global energy markets. The ongoing conflict between the United States and Iran and the consequent disruption in the Strait of Hormuz have created significant uncertainties across the global hydrocarbon supply chain and in India. As you are aware, the Strait of Hormuz normally handles nearly one-fifth of the global oil trade and remains one of the most critical energy transit corridors in the world. Due to the escalation in the regional tensions, the vessel movement through the straits has witnessed a severe contraction, resulting in heightened volatility in crude oil, LPG, and natural gas markets. The last Rafan LNG complex in Qatar, which accounts for approximately 20% of global LNG supply, has been subjected to attacks, comparing the operator to decrease a force measure. Resulting in acute supply disruption and significant tightening of gas availability globally. These developments have created headwinds of an extraordinary nature, not merely a market challenge, but a structural supply disruption of global consequence. In response, Internoil, in close coordination with government, has acted swiftly. and decisively to navigate the situation and to ensure uninterrupted energy availability across the country. We have ensured comprehensive supply continuity, including diversifying our crude and gas sourcing across alternate geographies and trade routes, optimization of crude procurement strategies, and ramping up of domestic LPG productions. Now, turning to our operational performance for financial year 2526, notwithstanding the turbulence in the external environment, I am proud to report that this has been a landmark year for Indian Oil on virtually every operational dimension. During the year, we recorded the highest level annual refining throughput in the company's history, achieved record-consolidated annual sales volume, achieved Highest ever rubric and sales and also registered the highest petrochemical sales volume for the year. This year from the perspective of profit profit tax is rupees 36,802 crore in financial year 2526 as against rupees 12962 crore in financial year 202425. This quarter, we have registered a PAT of Rs. 11378 crore with a whiz preceding quarter which was Rs. 12126 crore. Revenue firm operations during this quarter stood at Rs. 232855 crore against Rs. 231769 crore in the immediately preceding quarter of this year. The sequential increase in revenue was primarily driven by a significant increment in sales volume across key business segments during the quarter. The revenues for the corresponding quarter of financial year 25 was Rs.217,725 crore. On EMA basis, the revenue for the financial year 2526 is rupees. 886224 crore versus Rs 845513 crore for the preceding financial year, financial year 2425. These achievements reflect the strength of our integrated business model, robust infrastructure network, operational excellence, and the unwavering commitment of our employees across the country. I would like to reiterate that despite the challenging global environment, Indian oil remains fully committed to ensure uninterrupted energy supply to the nation while maintaining operational resilience across the value chain. We continue to maintain strong focus on project execution and long-term strategic growth initiatives. We remain committed to timely completion of these projects to support India's growing energy demand. And the nation's energy transition objectives. Now, the operational and financial highlights will be briefed by Shri Nitin Kumar, Executive Director, Corporate Finance and Treasury in Illinois, to you. Thank you.

Thank you, sir. Dear investors and analysts, very good afternoon. 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, and achievements to differ materially from those expressed or implied. Participants are advised to refer to the company's latest filings and regulatory authorities for a more detailed discussion on risk and uncertainties. The past quarter witnessed important developments both globally and domestically. On the global monetary front, The U.S. Fed has kept the interest rate unchanged in the range of 3.5 to 3.75 percent. RBI has also kept interest rate unchanged at 5.25 percent, maintaining a neutral stance. Energy prices have increased globally due to supply disruption in Middle East on account of U.S.-Iran war, which will put pressure on inflation globally. This may keep the interest rate higher for a longer period. Coming to the forest market, rupee has experienced pronounced volatility, with the Indian rupee depreciating by about 11% during the year against the USD, from 85.48 to 94.84 rupee per dollar, and continues to remain under pressure in the current fiscal driven by global geopolitical developments. As per PPSC report, HSD consumption witnessed 4% growth, MS consumption witnessed And overall petroleum product consumptions have also grown by 2% in financial year 25-26 on a year-on-year basis. IOC has achieved overall domestic petroleum sales volume growth of about 4.8% due to the positive increase in market share. Now, let me briefly touch upon the quarterly performance highlights. Talking about the numbers, the average price of food, that is Indian basket during this quarter, increased from $63.87 per barrel to $83.01 per barrel, which is increased of about 30 percent from the immediately preceding quarter, that is, quarter three of financial year 26 due to ongoing U.S.-Iran conflict leading to supply disruption. Urja Bharat Private Limited, a 50-50 joint venture of Indian Oil, has announced the oil discovery in operated Onshore Block 1, Abu Dhabi, on 30th January 26th. The exploration concession was awarded to this company in March 2019. Let me briefly touch upon the major verticals, refineries. During the year, refineries achieved highest travel crew throughput of 75.5 million metric tons with a capacity utilization of 107.4% in comparison to throughput of 71.6 MMT and capacity utilization of 101.9% during the previous year. For Q4-25-26, the throughput was at 19.7 MMT with a capacity utilization of 113.9% in comparison to throughput of 19.4 MMT and a capacity utilization of 109.7% during Q3 of financial year 25-26. Pipeline. During the year, pipeline throughput reached a record 105.6 MMT, with capacity utilization of 73.7%, vis-a-vis 100.5 MMT during financial year 25, with capacity utilization of 71.7%. During the quarter, the capacity utilization was about 78.3%. For the throughput of 27.7 MMT, compared to 76.3% with throughput of 27.6 MMT in the immediate preceding quarter. Marketing. I am pleased to share that Indian Oil has recorded highest ever total sales volume of 105.117 MMT, recording growth of about 5%. Financially at 25, that number was 100.292 MMT. During Q4 2526, sales volume of 27.343 MMT was achieved as compared to sale of 27.184 MMT in Q3 2526. During 2526, 2,597 retail outlets were commissioned, taking the total number to 42,818. We have commissioned a record 909 retail outlets in D1 class market, which is national highways, leading to positive market share. Our new business achieved record sales of 905 TMT during the year, reflecting a 16% growth. Petrochemicals. For 2526, Petrochemical reported highest average sales of 3.396 MMT. Financially, at 25, this figure was 3.236 MMT. For Q42526, sale of 0.901 MMT was achieved as compared to 0.893 MMT in the preceding quarter.

Good.

For 25-26, total gas sale was 7,276 TMT, including CGD sales of 188 TMT, vis-à-vis sale of 6,892 TMT, including CGD sales of 113 TMT for 24-25. During the quarter, we registered gas sales of 1814 TMT, which includes CGD sale of 54 TMT as compared to total gas sale of 1937 TMT, which includes CGD sales of 51 TMT during the preceding quarter. In a milestone development, Indian oil commenced India's first-ever export of liquefied natural gas LNG by road to Nepal. Indian oil has established cryogenic storage and regasification facilities at Simara, Nepal, laying the foundation for the nation's industrial LNG ecosystem and promoting cleaner fuel adoption. Biofuels and reservoir energy. We have achieved ethanol blending percentage of 19.97% on all India bases up to March 2026. Our wholly-owned green subsidiary company, TerraClean Limited, has achieved connectivity approvals of 2.6 gigawatt capacity on central transmission utility and state transmission utility. Project activities, including land aggregation, tenders for long-term, tenders for long-lead items like transformers, end-to-end wind tender, etc., are in progress. Through TerraClean Limited, we are progressively exploring commercial and industrial customers across India for providing reliable green power through long-term power purchase agreements under the group captive open access mode. Indian oil aims to develop 31 gigawatt of renewable energy by 2030. Hydrogen. The green hydrogen plant of 10 KTA at Panukat Safindri is expected to be completed by December 2027. Indian Oil is developing in-house green hydrogen ecosystem, which includes indigenous technology for generation of low-cost green hydrogen production. I also qualified Type 3 composite hydrogen storage cylinder for onboard hydrogen storage, which are lighter and cheaper than imported cylinders, range of hydrogen fuel cell applications across retail outlets, two-wheelers, indigenously developed hydrogen-powered drones, enabling enhanced endurance, Mobile Hydrogen Refiller for Hydrogen Dispensing in Remote Locations. Notably, Indian Oil is the only company in the country dispensing hydrogen through our fuel stations at R&D Centre in Fahidabad and Gujarat Refineries, Varodha, and undertaking field trials on hydrogen fuel cell buses and viability study for Hyundai Nexo hydrogen fuel cell electric vehicle through two-year real-world tests. Under the National Green Hydrogen Mission Policy, we have partnered with Tata Motors Limited to undertake trials on hydrogen fuel cell buses across four major highways. We will also develop two new hydrogen dispensing stations along Mumbai, Pune and Jamshedpur-Balasur Corridor. CAPEX. During April to March 26, the company incurred a total CAPEX of 31,401 crores, encompassing investments across all verticals. The budgeted CAPEX target for 26-27 is 32,700 crores. These investments are aligned with our long-term strategic roadmap and national energy priorities. The major refining and petrochemical expansions project across Panipat, Baroni, Gujarat, and Paradeep are at advanced stages. of execution and are targeted for completion during 2026. Phase-wise commissioning of process units, utilities, and official and off-site facilities is being undertaken in a structured manner to enable progressive capacity buildup and integration. As you are aware, currently we are working on three major expansion programs in refineries. Panipat refinery expansion is expected to be completed by December 26, Baroni by August 26, and Gujarat by November 26. Borrowings. With respect to the borrowing levels, the borrowing as on 31st March 26, The call has moderated by about 5,280 crores during the quarter and about Rs. 23,798 crore during the year and was at 1,10,668 crore level. The reduction in the borrowing was mainly on account of higher profitability and working capital changes. As on 31st May 26th, the company's gross debt-to-equity ratio stood at 0.54, reflecting a comfortable leverage profile. After adjusting for financial investments, the net debt-to-equity ratio further strengthens to 0.32, positioning us well to pursue growth opportunities, absorb market volatilities, and maintain financial strength across cycles. With these words, I take a pause here and request Director of Finance for his further remarks.

Thank you, Nathan. I would like to extend my sincere appreciation to our investors and all stakeholders for their continued confidence and support. The progress achieved during the year underscores the dedication of our teams and the strength of our operating model. As we move forward, we remain focused on sustaining momentum. Strengthening our core business and delivering consistent long-term value to our stakeholders. With that, I will end my briefing here. We would now be happy to take your questions. Over to you.

Thank you so much, sir. Ladies and gentlemen, we will now begin with a question and answer. Anyone who wishes to ask a question, now press star and one on their touchstone telephone. If you wish to remove yourself from the question queue, you may press star and two. Participants are requested to use handsets while asking a question. Ladies and gentlemen, we'll wait for a moment while the question queue assembles. Our first question comes from the line of Vivekanand from AMBIT Capital. Please go ahead.

Yeah, thank you for the opportunity. Two questions. The first one is on Project Sprint. Now that you have completed one year of this project, what is the progress that you want to share on this? Both on the CAPEX and the OPEX front. And if you could quantify and help us understand how to track this in the context of the dislocation that has happened due to the war, that would be great. That's question one. The second one is on the CAPEX priorities beyond the current expansion phase.

I do understand that several of your refining expansion programs are nearly drawing to a close.

So, in terms of how you are looking at aligning yourself with the national priorities in view of the recent turn-off events, how should one think about the CAPEX allocation for the next three years and also any major projects that you want to call out? Thank you.

Thank you. I will take the first question. As we have shared in the opening remarks, that the company has achieved the highest level sales in all the physical parameters, whether it is refining, whether it is marketing. So I think the sprint has given us the good outcomes, which is noted in our results also. As far as the CapEx and OPEX is concerned, I would like to share that on overall basis, we have achieved measurable savings of approximately Rs 2,200 crores during financial year 25-26 on account of project sprint. These 2,200 crores were saved on account of various initiatives like reduction in repairs and maintenance expenditures, energy efficiency parameters. And supply chain optimization. So many factors contributed to almost 2,200 crores. And for next year, 26-27, we are targeting a savings of 2,500 crores from this initiative. As far as CapEx is concerned, this entire strategy was to continue our momentum to meet all our Plan expenditure, while simultaneously reducing our non-earning capex or what we call maintaining capex. So, I am happy to share that all our projects which have been planned are going in line with our management expectations, and we have also optimized our capex on the maintenance portfolio. Now, coming to your second question, which was on the capex allocation going forward. See, Internoil is a very, very diversified company. We do investments in our refining, marketing, petrochemical, gas, renewables, and company has a very robust capital allocation policy to ensure that the momentum to take this company forward is maintained. While we continue to invest in our existing business, we are also investing into new and new businesses in the renewable sector. And the exact numbers I will be able to share through our corporate finance team. Thank you.

Okay. Thank you for the explanation. So you are saying that the other expenses line item is where the takeout of the 2200 crore is likely to have happened, right?

To a major extent, yes. But some initiatives like the nature of energy efficiency which are not exactly coming in other expenses, it comes part of my operating margins. So everything, I would say 50-50, 50% would be coming in my other expenses or you would say revenue expenditure side and another 1,000 would be coming in my margin side.

Okay, got it. Anuj, appreciate the color on Capex. Just a broad breakup, maybe percentage-wise in terms of the key heads like refining, marketing, pet cam over the next three years. That will help. And if you have any number in mind at an aggregate level, even that will be very helpful. Thank you.

See, I will be able to share my next year's capex. Next year, I am going to spend almost 32,700 crores. In the financial year 26-27, and I can also share that these expenses, the broad bifurcation should be majorly in refining an existing pipeline setup, and major expenses are going to this segment, and maybe 5,000 crore will be going to the renewable segment out of that.

Okay, thank you.

Thank you. And next question come from the line of Sumit Rohra from Smarts and Capital Private Limited. Please go ahead.

Yeah. Hi, sir. Very good afternoon to you and your entire team at Indian Oil. So, firstly, I mean, you know, very well done on the financial performance of last financial year. So, excellent performance from all of you. So, my question, and, and, so, firstly, my question to you is now as an Indian citizen is that, you know, hats off to you guys. But in a very challenging environment globally, their countries are really not fuel. You know, you all three have done a fantastic job. So, great stuff on that. Now, sir, my question to you would be now as an investor point of view, is that, you know, what's the thought process, you know, you're seeing today, you know, on, you know, pricing? Because, I mean, the only reason I check on this is because, you know, we are a very high volume company. And, you know, have un-recoveries today, like the way we have, you know, is obviously very alarming for us as investors, right? Because I mean, today, for example, whatever losses we report in Q1, you know, to recover that, you know, we would need a couple of quarters, you know, so as an investor, our financial matrix could obviously, you know, come off for this financial year. So, you know, and today, the matter of fact is that, you know, we've seen a 90% increase in fuel prices. So can we, you know, now think on the grounds that, you know, we could go back to the daily pricing regime, which was, you know, existent in the past. So, if you can just share some thoughts of, you know, how you look at the situation as well, you know, because you've handled the supply side extremely well, but now, you know, how do you look at the pricing point of view and are we looking to get prices aligned, you know, to market prices in the very near term? It would be very nice to get your thoughts, sir.

See, Somit, you have already stated that today the priority is to ensure the energy security to our citizens, and Indian Oil remains one of the companies which has that responsibility, and we are trying our best to fulfill that. As we have stated in the beginning, we are trying to manage our entire supply chain and re-align that in the most optimum way. Because of these disruptions, we have diversified our crude sourcing, RPG sourcing countries, we have changed our refinery diets, but at the end, we have ensured that the product is available at all retail outlets, at all RPG distributors, at all point of time. Now, as far as how to mitigate the situation is concerned, The situation is very uncertain and unstable. We are working on a day-to-day basis to manage that crisis, and the right decisions are being taken at appropriate levels to ensure that both energy security and the company's viability remains. As far as specific numbers are concerned, we have stated that we will not be able to give some specific forward-looking guidance as of now. As we are in the midst of a quarter which is going on, still we are on 19th of May. Things change every day. So, but one thing is sure that we are monitoring the situation very closely and taking appropriate decisions. Thank you.

Okay, sir. Thanks for that.

Thank you. Our next question comes from the line of Mayank Maheshwari from Morgan Stanley. Please go ahead.

Thank you sir for the call, despite the challenging quarters that we are in right now. My first question was more related to the plans that you talked about around refining expansion. I think you have kind of highlighted by December of this year, you would be kind of starting pretty much most of the refineries now. Can you just give us a bit of an idea around what is the status now for all the three refineries, where is the ramp-up stages, and can we expect full utilization rate of the three refineries by the end of this year?

Yeah. See, Pandipat refinery, which is being expanded from 15 million metric tons to 25 mm TPA, see, the approved cost is around 38,000 crores. And out of that, we have already spent Approximately 27,000 crores as on date, and we expect our completion to happen in December 26. The second one, Gujarat Refinery, which is being expanded from 13.7 mm TPA to 18 mm TPA. The total cost, expected cost is 19,000 crores, and we have already spent 13,500 crores as on date. And we also expect this to come in a similar timeframe in November, December. And Baroni also, which is expected to, you know, we are expanding from 6 mm TP to 9 mm TPA. Our approved cost is 18,000 crores. And out of that, we have already spent 13,000 crores. And this is also expected to come near the same time frame. So you are correct to say that all the three refineries expansion are coming within the same time, and our teams are working day and night to achieve these commissioning dates.

And sir, when we talk about commissioning, we are basically saying that is when you will get your first crude in, and then you kind of ramp up from there, or is it like a ramp up state we are talking about here?

Oh, no, it's the first crude in we take, and we start our operations on that date. And over the time...

So it will be about a year of stabilization from there?

Generally, we say 60% capacity should come in the first year, and 80% next year, and 100% in the third year. Got it, sir.

And I think the second question is more related to the question around the last quarter. Can you talk about a bit around what were your refining margins or whatever margins you want to kind of give us and to get a perspective to reflect on a quarter-and-quarter basis how things have moved? Obviously, things are volatile. We completely understand that. And also, if you can just highlight of how much was the impact in the month of March because of the situation that evolved around the conflict.

See, if you have seen our results, we have given a very categorically statement there for the benefit of our investors that in the end of February 26, conflict arose in Middle East region leading to surprise uncertainties. And result in volatility in the price of crude oil and petroleum products in the international market. The profitability for the year 2526 was largely insulated from the impact of these developments due to inventory procured at normal prices before the conflict. So 2526 results have not got impacted to a major extent. Now coming to your first question of the refining margins. See, refining margins have been quite volatile and unstable during the, particularly this quarter. Last year was quite stable for the full year. So, but what we felt that Indono is an integrated energy company, and gross refining margins affect only the performance of refinery segment. Therefore, you know, using this GRM alone as a benchmark of overall performance may not give the correct picture to our investors. And now we are focusing that, let us focus on EBITDA and PAT to see the overall performance of the company. This statement becomes much more important given the situation which is prevailing today in Q1, where the refining margins are extraordinarily high. But our marketing margins are intact. So that way, we are, we have not disclosed our GRMs during this quarter in our financial results. And we also had to say that there is no standard practice methodology for calculating GRMs. And each company is having its own methodology. So that also added to the... Our decision that the PAT and EBITDA should be the better, you know, showcase of our performance.

Okay. We normally compare for each company like to like quarter-on-quarter YOY, but okay, I get your point. And in terms of the CapEx, the last question I had was like, you are still maintaining your guidance for spending around 50% of fiscal 27 CapEx on refining. Considering these three projects are kind of done. Is there anything specific that this money would be spent on?

Actually, whenever the commissioning happens, the payments take some time. So there's a difference between the commissioning and physical progress in the payment cycles. So that is why the cash, there would be a substantial cash outgo on account of these completed projects in the next, in this financial year, 27-28.

So we should be seeing lower capexes on refining starting fiscal 28 is what you're kind of.

Yes, yes, yes.

Got it. Very clear. Thank you.

Thank you. Our next question comes from the line of Hardik from ICICI Bank. Please go ahead.

Thank you. Thank you, sir. I just want to ask you to assume that the DRM, we are not disclosing. Is it just for the quarter or are we going forward? This will be the policy. How is it?

See, till the time, so much unstability and, you know, volatility remains. I think giving GRNs would not be a correct way of disclosing our financial statements, because at one point of time, you may find GRNs excessively high, which doesn't get reflected in my profitability. So, till that time, we are making it a pause. But we, again, we may consider once again, once the situation normalizes.

Okay, okay. And sir, may I know, how is the LPG under recovery in April and May?

Yeah, I can share with you. Just give me one minute.

And also, can you just highlight, there has been a substantial increase in the operating cost. So if you can just help us, you know, the breakup or where the incremental cost has been there.

See, the under recovery per cylinder was rupees 100 in the quarter four of financial year 25-26. Which went high to 171 in April 2026, which has further increased to 617 May 2026. LPG buffer position as on 31st March 26th is Rs. 23,102 crores. I will also like to share that LPG loss incurred during quarter 4-25-26 is Rs. 2,405 crore. And for full financial year, Rs. 2526 is Rs. 9211 crore, which is without reducing any subsidy which is being received by the company.

What is on breakup of or why there is a substantial increase in operating costs, other expenditure?

Sir, you are talking about those. Okay. Give me one minute, please. I will give you this answer by the time I get this information. If you have any other question, I will come back to you for this answer. But I can always share that exchange loss was a major factor of this increase in the other expenses. As you know that the rupee depreciated by almost 9% during this financial year 25-26. So, the exchange losses have been the major contributor. But I have specific information I will be able to give you again. Thank you.

That's all from my side. Thank you.

Thank you. Our next question comes from the line of Vineet Banka from Nomura. Please go ahead.

Hi, sir. Thanks for the opportunity. Sir, regarding the refining margin, so do you think that the world is entering a refining super cycle and GRM will average at a much higher level than what we have observed the number before the war? And this is especially true for Indian refiners where the output of diesel is much higher than, say, Singapore GRM. And the cracks have been very high. So I'm asking this because much of the upside for IOCL will be coming from the final expansion. So 25% of capacity is being added. So what is your view on the GRM going forward, maybe for FI 27, 28?

See, although I have said again and again that I will refrain from forward looking statement, but yes, I can share that world definitely will be facing some cycles of higher refining margins going forward. Because whatever has happened, whether in Russia, Ukraine, or in US, Iran, it has disrupted the refining and upstream assets also. So, in all in all, because of the various uncertainties, refining margins are expected to remain on the higher side till this geopolitical situation normalizes. And if you see for the past five years itself, refining margins have been quite high as compared to the refining margins if you see the previous five-year period. So, yes, refining margins are expected to remain high. In the next one or two years because of these uncertainties.

Okay. Thank you, sir. And my second question is regarding after the increase in capacity for refining, will IOC have surplus petrol and diesel production compared to the marketing volume? And what will be you exporting this volume for selling to other OMCs?

See, the kind of demand we are seeing in India, We feel that we may not have major exportable surplus on a sustained basis from our refining systems, but from season to season, because India also faces a seasonal demand in the monsoon period, in the winters, in the summers. So from the seasonal point of view, yes, we would be exporting. But on a sustained basis, we don't anticipate major exports coming except for a few products like maybe NAFTA for some point of time or sunny soil. But not to a major extent we see any exportable surplus.

Okay, sir. And the refinery throughput for FY27, shall we assume it will be higher than FY26? Because the utilizing has been around 108%. And assuming that there is some normalization there, and we will be adding some capacity towards the end of the year. So, what should we think about throughput for the refinery?

See, I would not like to comment on the additional capacities which will come on account of extensions, but from an existing refining setup. I expect similar refining throughput next year also. Because if you see, this year has been one of the highest throughput. And current year, we are having few shutdowns, planned shutdowns. And few shutdowns which were planned this year will come back next year. So we are expecting that next year. We should be having almost 75 mm TPA of refining throughput on a standalone basis. If you add CPCR, that would be another 10. From Indian Oil, we would be having 75 mm TPA of refining throughput.

Okay. Thank you, sir. I'll get back in the queue.

Thank you. Next question comes from the line of S.R. Amish, an individual investor. Please go ahead.

Good evening and thank you very much. So if you look at your petroleum segment results, can you share what is the impact of the inventory accounting included in this petroleum segment result for source water?

Actually, because of various factors, I would say that 25, 26 as a whole year was a very stable year for all of us. And as if specific inventory numbers are concerned, I would like to refrain from the specific numbers as on date. But if you want, you can get in touch with my corporate finance team to help you out on this.

Okay. So on the petrochemical segment and the gas segment, can you share some thoughts on what are the drivers for the petrochemical turnaround due to inventory gains or is there a sustainable improvement in the spread? And do you expect this trend to sustain? And on the gas segment, what has resulted in the loss? Is it from your LNG business or in the standalone CGT? And how do you expect the gas business to shape over the next one, two years in terms of the profitability?

See, I have shared that we had a highest petrochemical sale during the year financial 25-26. And if you see, the fourth quarter was very good for the petrochemical segment. So that was the additional margins what we earned in the Q4 in Petcamp. But as far as gas is concerned, gas prices remained on elevated levels. And that has impacted the quantity of sales and to the margins to some extent. So we are also watching the situation on gas front, how it will turn out because of this now geopolitical situation, the gas prices have gone up significantly. So it's a situation we are monitoring and let's see how the gas volumes take shape in the current financial year. As far as petrochemicals are concerned, we expect to continue to have a higher sales volume and also give reasonable good returns from this business segment.

So just one more follow-up question on the gas segment. So in terms of the progress on the standalone city gas distribution network, what is the kind of ramp-up you expect this year? And when do you see the CGD business turning profitable? Because just to understand if this entire loss is on the LNG trading, or is there some loss on the standalone CGD stations which are commercialized, which you expect to, you know, eventually make it profitable? How do you see the Tandrol CCG business shaping up in the next one, two years?

See, as far as CGD business is concerned, we are having a EBITDA positive in 25-26 Q1 itself, and we have become PBT positive by the end of the financial year of 25-26. So as far as CGD business is concerned, it is now a net positive contributor in my P&L. And going forward, we expect our volumes to go up in next financial year from this segment as well.

So, in terms of the gas supply chain for the CGD business, apart from the, you know, new oil gas and the APM gas, are you able to source enough LNG for the kind of ramp-up appliance for the standalone CGDs? And are we managing the supply chain for the natural gas there for the CGD business?

See, there is no constraints in the availability of gas as such. It is only the pricing issues, actually. So you have to, whenever, it's more of a decision whether you will be able to pass on this higher gas to your customers or your internal system. So based on various factors, we are definitely, but as a CGT business is going up, volumes are going up, as I have showed to you that it is a PBT positive for me now from 25, 26, Q4 onwards. And going forward also, we expect that, and I will also share with you that many of the suppliers declared force major due to closure of state of foremost. So that affected our business, but we also diversified our spot procurement from Indonesia, Nigeria, Angola, Oman. So, we have now diversified our import sources also. All in all, I will just say that it's a pricing issue, not a supply constraint.

Thank you very much and wish you all the best.

Thank you. Our next question comes from the line of Ajit Dardha from Nisza Securities. Please go ahead.

Hello, sir. Am I audible? Yes. Thanks for the opportunity, sir. Sir, my question is around the proposed JV between SCI and the oil PSU. In light of the current energy security concerns, when this JV is expected to be finalized and operational, sir?

I, see, I will, under the AGs of MOPNG in the Ministry of Shipping, a non-bunding MOU was signed between the Oil CPSCs and Shipping Corporation of India for formulation of a joint venture company for ownership and maintenance of vessels with focus that some of them should be built in India. Indian Oil is exploring to... Purchase 4 MR vessels to start with. It is established that the CPSCs have complementary capabilities and jointly acquire and manage the operation of vessels and thereby exercise better control on the petroleum supply chain. The companies, whether it is both oil PSUs and SEIs, have agreed in principle to work together and collaborate on acquisition and operation of vessels on mutually beneficiary basis. The JV formation structure is known to everybody. So over to you.

And, sir, with vessel acquisitions happening at peak of the cycle, what minimum benchmarks or ROC is targeted by this JV?

I mean, today I will not be able to give you the exact numbers, but these issues are being discussed between the companies and the SCI, and we will arrive at a very, you know, due diligence is going on as on date, I can say.

And, sir, will that JV be a nodal agency going forward for the YPS use, or it will be still on competitive basis for other players as well?

All these things are under discussion as on date.

Okay, okay. Thank you so much. I will get back in queue. Thank you.

Our next question comes from the line of Akshay Ajmera, an individual investor. Please go ahead.

Yeah, thank you so much for the opportunity, sir. Just following up to the earlier participants' question, how will we ensure, sir, in this, you know, shipping business, because it's a very cyclical business, so how will we ensure profitability of the JV? Because there are up cycles, there are abnormally high rate cycles, and it's a very long, capex-intensive business, so how will we ensure that, you know, there are no losses in the JV?

As I said, all these issues are under deliberation, but I can just share with you that Indian Oil is the end user of the shipping business what we are talking about. And we are in a continuous business for the past more than five to six decades, and this is going to continue. So any arrangement which gives me the shipping security. It will be beneficial to the company and which is very much evident over the past two years that whichever company had a very strong shipping connection, it made best use of that during this crisis.

That was really helpful, sir. Sir, at present, what is the estimated annual spend by us on shipping freight charges and what percentage we are expecting that it will go through the proposed JV?

These numbers will be able to, I will tell the corporate finance team to give it to you through the coordinator, please. I don't have the ready numbers with me.

No problem, sir. And it will be primarily a very long-term management, 5 and 15 years.

Yes, yes. It is going to be a long-term joint venture company because the shipping business is a long gestation period.

What is the expected timeline, sir? When are we expecting this to be operationalized?

Things are under discussion and the due diligence is going on. So we are quite focused on this joint venture company.

All right, sir. Thank you so much. I'll get back in the queue.

Thank you. Our next question comes from the line of Vikas Jain from CLSA. Please go ahead.

Yeah, thanks for taking my questions. Anuji, if you could also give a sense of the ramp up of these reasonably large capacities which are coming in the sense of not just throughput, but also the upgrader units by when do you think they will get to full utilization? Should we assume that everything to get at... Full utilization will be three, four quarters from the time they start. So, maybe more like towards the end of 2027 is when all of these units will be fully stabilized.

Actually, as you know that Indenor is already managing 10 refineries and handled refinery expansions in the past. As a thumb rule, in our company, we say the first year we will achieve 60%. Next year, 80% minimum, and by the third year, we achieved 100%. Percentages can go a little bit here and there, but on a broad basis, this is what we have seen in the past, and this is how we make our profitability metrics also when we take management approvals on any expansion. And all these are brownfield extensions, and they're expected to take a lesser turnaround time. So this 60-80-100 is on the outer scale, we expect it to turn around much faster.

So FY29 should be the number, should be the time when we should have more or less, hopefully.

I can't say the specific year, but I would definitely say that being a brownfield expansion, we expect them to come on board very quickly.

Thank you so much. That's the only question.

Thank you. Next question comes from the line of Dwanit with Savla Family Office. Please go ahead.

Hi, sir. I have only one question. I heard previously that you were saying that the pricing is an issue on the gas side, not the supply. Does it apply to the supply of petroleum products as well? And, and till what time are we confident about this situation? So, we are like 30 days, 40 days, 50 days of stock because, or is there some point where we might actually not be able to supply the petrol or diesel at the pumps? And in terms of pricing, I know you cannot elaborate much on it, but is it fair to say that since the oil price of oil has gone up by like 50% or it's doubled, then probably the pump prices should also double for us to be able to, you know, break even?

I will reply to your first question first. As far as the supply of crude oil and other petroleum products are concerned, we have consistently seen that particularly crude oil, there are very diversified sources available, and all our refineries are operating on a full capacity since the crisis have started. So we are making the crude oil available. Other, LPG, yes, LPG had a constraint, but we have managed to diversify our sources of LPG, and reasonable good quantity of LPG has been made available, and that is why if you see constant supply availability of LPG is being issued pan-India basis from all of our distribution channels. Now, coming to your second question about the inventory variables. We don't have any shortage of either crude oil and LPG, but yes, crude oil, you know, number of days inventory is still being maintained for over a month. LPG inventory has come down, but still it is being managed so that we have enough LPG availability Pan-India basis. Now, coming to your third question about the pricing, as I have said that the situation continues to be very, you know, uncertain and unstable. We are monitoring the situation, and appropriate decisions are being taken at appropriate level to mitigate the situation. Thank you.

So, I know you can't, I agree with your statement on pricing. What I was trying to understand is, is my assumption correct? When we say that if the price of crude has moved up by $50 or it's doubled, then probably for us to be able to make a decent margin, the price at the pump should also go up by that same quantum or is there a lot more calculation which goes within it?

See, it depends on the number of the factors prevailing in the country, outside the country, and as I said many number of times, we will not be able to give any specific guidance on this matter. Thank you.

All right. Thank you, sir.

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

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

Thank you so much, sir. On behalf of Antic Stock Broking Limited, that concludes this conference. Thank you for joining us, and you may now disconnect the lines.