Thanks, Eric. Good morning, everyone.

It's my pleasure to welcome all the participants as well as the top management of HPCL. Today we have Mr.

Vikas Kaushal, Chairman and Managing Director; Mrs. Srividya Venkataraman, Director Finance; Mr.

S. Bharathan, Director Refineries; and Mr.

K. Vinod, Executive Director Corporate Finance with us.

I'd like to take this opportunity to congratulate Mrs. Srividya Venkataraman on taking charge as Director Finance, and wish her all the best in the role.

I'd like to hand over the call to Mr. Vikas Kaushal for the opening remarks.

Good morning, everyone. Pleasure connecting to you early in the morning on a Friday morning, hopefully look all a Thursday morning.

I was thinking it's Friday, but maybe I need the weekend soon. This is our first quarter one analyst call.

Before I get started, as was introduced, I'm joined by Mr. Bharathan, Director Refineries; Srividya, who's just joined us as Director Finance recently.

We are very privileged to have her as part of our board, and this is her first call, and I'm sure you're going to hear from her now and even going forward; K. Vinod, who you know from the past, and all the other colleagues.

I was preparing my opening thoughts for this, and that we'll follow the same pattern which we have been doing in the last calls. I'll speak for 5, 7-odd minutes, and then open it up for a Q&A.

We last spoke on 13th of May, and I was reflecting last night as I jotted down some points on what the quarter was. It seemed to me circle of life and twice over in this quarter.

It almost seems we seem to have lived a lifetime. Why did I make that comment?

We had the Rajasthan refinery, there was a high on 20th July waiting for the inauguration, an incident on--sorry, 20th April, waiting for the inauguration, incident of a small fire in the CDU, we had to postpone it, and then we recovered from that, and July 4th we dedicated that asset to the nation. That was one circle of life.

The second one was on the performance. We 13th we spoke on a high of ₹17,175 crore of FY '26 to the negative of this quarter, which I'm sure you have analyzed ad nauseam since last evening.

That was the second circle of life. These are times we live in.

You all have also agonized it on Excel sheets. We have agonized on it on a daily basis over the last quarter.

Lot of challenges, we'll talk about it, but very proud of the way our team fought it on a daily basis bravely, and managed to keep the supply chains going in times of high uncertainty. At moments like these, we take high and low in our stride and move forward.

Coming to the current situation, I will not talk much about it, all of you track it. We know the uncertainty which prevails.

Just one benchmark talks about it, what was crude 30, 40 days ago, what was it 20 days ago, what is it now? That's a highly uncertain situation.

It poses four key challenges to any team like ours which is operating on it. First, extreme uncertainty on price.

I talked about crude. At one point of time, you are taking a benchmark which is going, Brent is going in to $110s and $115, you are buying it in 1.5, 2 months in advance, and then suddenly it drops $25.

What do you do with that inventory? By the time you figure that out, it goes up to $96.

Extreme uncertainty on prices, and also not only on the crude, also on the cracks. The cracks have been less volatile, though they have been consistently high.

Second, on an operating basis, we had to take or any refiner had to take a lot of decisions based on availability rather than optimization. During this period, most refiners, most certainly us, could not run the most optimal crudes we would have wanted to run for our assets, for a very simple reason: some of them were sitting on the other side of Strait of Hormuz, there's no way of getting them out.

Lot of non-regular crudes. The idea was to keep the throughput going, and as a refiner which is working, refining and marketing company which is working to keep the wheels of motion, wheels of the nation in motion, we had to make sure the throughput was there, we didn't have that option of going down on throughput or we didn't exercise that option.

Third, there were demand pressures. If some of you have tracked the industry, there have been spike in the demands.

There were days when our supply chain was required to put in 40% more product into the market. Those are not things which are usual.

You can all imagine what kind of challenges exist on the supply chain. Last point I wanted to say, it's a constant challenge.

Many of us in services industry, I belong to that industry, often get Saturdays and Sundays. I would say our teams don't get that also.

The fact that it is now going for 120 days is not, it has leads a lot of tear and wear. Having said that, I will once again reiterate, I am extremely proud of the way HPCL has performed notwithstanding the numbers, and I know we will get a lot of questions on the numbers, we are ready for that.

The organization has delivered under the crisis, kept the assets running, and it's managed to keep the customer expectations going. As I said, it takes a lot of effort to manage the crisis, and the teams were focused on it.

Yet as we were doing it, we were also keeping an eye on the future and taking some fundamental improvement initiatives. The numbers are all there, and I'm sure everybody's looked at it.

I chanced upon at least three or four flash report from analysts. I read them, and very fair observations by many of you, and we'll address those questions in our thing.

What I wanted to cover in the remaining part of my opening dialogue are just two things. One, just a couple of key events which have happened in the recent past, and then I want to talk about, which I'm sure you want to hear, what is our response strategy to the current situation?

On the event, the biggest one was HRRL. Finally, we have a running refinery in Rajasthan, Rajasthan's first refinery.

We declared scheduled commercial operation on 22nd June. The refinery is ramping up.

As of now, CDU is running at 60% capacity utilization, and slowly we will get other trains of downstream units going up. Diesel, MS, and lot of other units are there, and likely today, tomorrow, VGO HCU, which is one of the money spinner units of the refinery, is also going to be in line, and lot of effort has gone into it.

We are expecting the refinery to ramp up to the full capacity in quarter three, and petchem by end of the financial year. The refinery gains and running the CDU at full capacity would be at quarter three.

During this period, we have already tested the CDU at a full capacity run for a period of couple of days, right now we're running it at 60% utilization. Second was an exciting small pilot, but it I wanted to highlight it because it shows you the mindset on what we are operating at.

Some of you might have caught the news of our latest LPG product called HP Navya. It was launched on 15th July, which was our 52nd Foundation Day.

It's an on-demand, premium LPG product sold through new channels, new look of cylinders, new delivery mechanisms, new channels. In Bangalore, we are piloting it with Swiggy.

Right now it's available in a radius of 5 km, but slowly will be ramped up. In Mumbai, we have started it through our own channel.

We are expected to hit five more cities by 31st July, and 25 cities by 31st August, and pan-India, it'll be mostly urban-centric, pan-India about 200 to 250 cities by Diwali, which is the aim. The idea is to move some of the for people who are willing to look for comfort, who are willing to look for better service and pay a price for that, LPG will be available in a different mechanism or different mode in India.

No longer waits, and no longer you will have to call up people to get an LPG cylinder. You can go and pick it up from your neighborhood shop.

There are some other interesting pilots which we are doing on use of biomass in fuel. I'll not talk of it.

In subsequent meetings, we'll probably cover that. Obviously, we have, I'll come to the second point, which is the response strategy.

You've all seen the numbers. As the management team, any such numbers disappoint.

They don't surprise. You can always say there was a margin of surprise in the end because of, I would say, inventory writedowns, etc., but we knew what was coming, and we have prepared our response strategy on it.

There is a seven-pronged response strategy which we are working on, and I will elaborate that. At the end of it, then I'll stop and open it up for questions.

First is about improving our balance sheet. What gave us strength at this point of time for the fact that last full year we had improved our balance sheet.

Those of you who have been on the calls would recall that our debt equity had changed from 1.43 at the beginning of last year to 0.8 at the end of the year. That gave us the headroom to withstand this crisis.

Right now, it has risen up to 1.5 again. The debt is ₹72,000 crore, as we speak.

We added about ₹1,900 crore a week during this period, last 13 weeks. This organization knows how to correct it.

At the Ukraine crisis, the debt equity went up to 2.33. It came down to 0.8 in about three years.

I'm very sure it will come down faster this time, and this will be one of our first objectives on making sure we climb down on the debt equity and create that headroom again. Very difficult to give a forecast given the prices there, but obviously this is on top of the agenda for Srividya, me, and other corporate finance team, literally looking at it on a daily basis.

Second in response to the time is the capex control. As it is, we had set a lower capex.

Most of you who have tracked us for a long time know that we are at an end of a long capex cycle. Things are starting to fall in place, taking a bit more time than we would have liked in terms of stabilization, but nevertheless, they're falling in place.

We don't have to spend that much of money. As a result, our annual target which we have agreed with Government of India, if I remember correctly, is somewhere in ₹9,700 crore or in that ballpark.

In the first quarter, we spent about ₹1,700, 1,700 crore roughly, and all of that is, I would say most of that is essential thing. You still have to spend on turnarounds and you have to plan for your turnarounds, etc.

You have to buy the cylinders, all of it is going capex. At this point of time, we are really focused on, especially in the short-term money outflow, on really critical capex.

It's very tightly managed and prioritized. If the current situation prevails, we would expect the capex to be lower than ₹9,700 also.

We want to conserve cash as a management team. Third response strategy is interest costs.

With the rising debt, we do have interest costs, though they have been very tightly managed. Last year you saw how we came down on the interest costs there.

Right now, couple of things we are doing, looking at all kinds of avenues for our parent balance sheet, and also the HRRL balance sheet, which is the bigger subsidiary debt or joint venture debt we have. Obviously leveraging the ECB window, etc., are some of those things.

The idea is to get our interest costs in control. The seriousness of this you can know from if you track our receivables, you'll see how they have come down and have stayed down.

Fourth response strategy is profitability improvement, making our assets work more. You had tracked us on the Samriddhi program last year.

We came in with was it about ₹1,600-odd crore. I don't remember exactly the split between recurring and one-time, but the recurring ones have already been baked into this year's plan.

Of course, with what happened in the first quarter, lot of plans got topsy-turvy like last minute movements, etc. Nevertheless, we have reinitiated, after hiatus of about three weeks, three months in the crisis, we have reinitiated Samriddhi 2.0.

We already are working on 100-plus ideas. We have taken, despite only 9 months left in the quarter or three quarters left in this year, we've taken an aggressive target of ₹1,500 crore on a run rate basis, and we're going to aim for ₹1,000 crore on accruals in this.

This would come in in three or four forms. There is obviously cost takeouts.

There is also an emphasis on a top-line improvement. Again, happy to give you details now or later in the call on one-on-one discussions.

Then there are also some of the things we are trying to do more on intermediate movements, which can saturate our refineries, etc., better. More on that topic in my one of my next response strategies.

The fifth one is winning in retail. Some of you tracked, we are at end of it a marketing company.

Very proud that we have been listed in top 20 brands in India across all sectors, across all companies. We have continued our efforts on increasing on the retail side.

Last year we talked about retail improvement, Abhuday. We had done it about 4,500 outlets.

Wasn't the most successful program. As a management team, we would have liked it to perform better.

We learned a lot from it, and we have launched Abhuday 2.0 at 4,900 retail outlets, and we have been at it for last three months. Of course, if you I just wanted to give a metric of volume increase, then without doing anything, my volume throughput of my retail outlets increased because of the demand state-owned enterprises had on their retail outlets.

We measure apple-to-apple and getting good early results. From the measurable set, we are getting about 100 to 150 basis point higher growth on our 4,900 retail outlets.

I'm just this is over and above the market growth, which is, I would say, the tide rising. Our Abhuday outlets are starting to outperform the non-Abhuday outlets in the market.

Parallely we are also focused on non-fuel. It's a small part of our bottom line, but nevertheless something which starts adding to bottom line, and we are very hopeful by end of this March, you will start seeing this as a additional line on our P&L in terms of contribution.

The sixth area is refinery improvement. That is obviously one of the biggest ones.

We do have headroom on our refineries to improve further. There are three or four things which we are aiming at.

First, in the next three quarters, as our refineries sort of settle on to the new paradigm, we are going to be increasing sourcing for our internal thing. One of the things which has hit us this quarter is our need to satisfy our marketing footprint by buying from third-party players.

That dependence is going to slowly reduce. In fact, if I count my own refineries and the joint ventures, by end of this year, I would be almost self-sufficient, maybe surplus on some products, by taking in total of my own refineries and joint ventures.

Two major efforts on this: we talked about HRRL ramp-up, and I'm sure there is you are going to have questions on VRMP. That also we have been in the process of stabilizing.

It's a tough technology. We've had a couple of, I would say, unexpected technological challenges on it because it's a high pressure, high temperature kind of a situation.

Dealing with tons and tons of catalysts becomes difficult, but we are mastering that art slowly, and this will start giving us both product and consistently addition on the bottom line. In an essence, we are making our assets work more.

Our turnarounds are much sharper. They finish bang on time now.

We are making a very concerted effort on energy costs because between the two refineries on our balance sheet, we probably would be spending close to ₹2,000 or even more crore on energy, so that's one effort. It will be actually much more if you had fuel and losses, that's one effort we are doing.

I talked about intermediate stream leverage. There are some interesting experiments we have done on buying intermediates to satisfy some of the units where there was potential to look at it.

Whether it is VGO or pygas, we have been making those efforts. Last but not the least, with three refineries fully working and then even joint venture of HMEL in the fold, we are looking at even crude optimization across our refineries a lot more.

Having a significant storage capacity at Mundra for HRRL gives us the flexibility of doing innovative things like bringing in VLCCs there and shipping it to Mumbai in a different fashion. A lot of effort going on on our refinery performance.

The last but not the least is the effort we have been talking about is on the digital side. Again, it's not only about just the fancy world of AI, but it's hardcore using digital to improve efficiencies.

In the we have been talking in every quarterly call. From the last time to this time, we have launched the supply chain optimization solution.

We're working on it. This will help us optimize our movements much sharper in a state-of-the-art tool.

A lot of digital and analytics use cases are being worked on, and focus is on efficiency measures. Those were the seven, I'll recall: improving our balance sheet, capex control, lowering the interest costs, profitability improvement program, Samriddhi 2.0, winning in retail, refinery optimization and improvements, and digital.

How do we look at the future? As the management team, we look at the future with a lot of confidence.

I can look at the last quarter and say, 'Oh, there is this negative.' That's fine.

It is there. I can't do anything to undo it at this stage.

We are very confident of our future. Lot of foundational elements, some which we will talk and some which we will not talk in this call, are in place.

The ones we will not talk, we want the world to see them down the line, and some of you guys to find it out yourself on how how this happened. We look at the future with a lot of confidence.

We will be turning around the current situation. Hopefully, by the time quarter call second call happens, you you all would be happier with the numbers.

We are coming out of the crisis stronger, with a more balanced portfolio, and hungrier. That's all I had to say in my opening comments.

Thank you for your patient hearing, and also the continuous interest in HPCL. As I said, keep your detailed reports flowing.

Even if you praise us or critique us, all of them are very valuable. I did mention earlier all the reports which came my way on WhatsApp since last night, the flash reports, I personally gone through all, very interesting comments, good analysis.

Keep that coming. If of course we are happy to take questions now, me and my team, and also if anybody wants to meet us later, we are more than happy to meet you separately later.

Thank you, and over to Varatharajan and the team for further moderating the call.

Good morning, sir. Thank you for the opportunity, and thank you for the very detailed and extremely useful briefing at the beginning of the call.

I just had a couple of questions, perhaps from a slightly near-term perspective. You had, I think, spoken in detail last quarter in terms of the sourcing that you had in place, and the kind of number of days of inventory.

Can we just get a sense, given the flare-up in the crisis again, how you are looking at sourcing? Q2, I assume, would have anyways been mostly tied up at this point of time.

Looking forward to Q3, are you facing any fresh challenges in terms of arranging for sourcing, given what is happening in the Strait of Hormuz right now, and what's the strategy and what's the kind of mix if you can throw any color in terms of how your crude sourcing is looking like, specifically now that your Rajasthan refinery is also up and running? Obviously our crude requirements have gone up to that extent.

Yeah.

Thanks, Probal. This is a dynamic time, and just to be very predictive on what we are going to do on sourcing is very difficult.

Just to give you a sense, at the beginning of the year, we do always do a term and a spot mix. This time in the first quarter, we hardly got anything from our term contracts because lot of the term contracts were sitting on the other side of Strait of Hormuz.

Having said that, we are very well covered for our crude till end of August fully. In fact, yesterday we were starting to buy for September.

There is always barring one cargo which is stuck here and all, but those are operational things we are able to. I'll first talking of crude only, then I'll talk of LPG itself.

I think crude availability is not an issue. Pricing, of course, goes up and down and is very difficult to handle, given you're always buying dated Brent and 5 months pricing or 2 months prior pricing.

Less of a challenge on crude sourcing this time, we don't anticipate an issue on crude sourcing. There is enough crude which is available.

In terms of mix, I think with what is happening and moment HRRL is at full steam, actually the mix plays more into our hands right now because if you look at it, both of our bottom upgradations, VRMP is still in stabilization phase, as I said, and Rajasthan well, delayed coker has started, but couple of units have to get on stream for us to get it to there. Moment HRRL VRMP is stabilized and HRRL is fully at full capacity on the refining section, we actually will be even more stronger position because we can buy even dirtier crudes.

On crude, I don't see an issue. On LPG, I think it's once bitten, twice shy.

All OMCs have worked very hard to diversify the mix. One of the things pre-crisis, all of our ships used to be looking at Strait of Hormuz and buying and churning up and down there.

We've been buying a lot of cargos from US and other places also, I think we have learned the drill, there is a lot of muscle memory now on how to do it. Of course, the situation is very dynamic, bombs flying all over is a difficult thing, we'll adapt as it is, but I'm not worried about sourcing of either LPG or crude at this point of time.

Pricing, of course, is a concern.

Got it, sir. With respect to just the inventory movement that you mentioned, it's fair to assume that there would probably have been a negative inventory impact in the quarter both for the refining and marketing segment, and that will probably reverse in this quarter given the kind of spikes we're seeing in prices, or it's too simplistic to look at it in that way at this point of time?

I think part of the statement is absolutely correct, Probal. We did have a significant amount of inventory, and also two things happened in this quarter.

You should remember that it was very uncertain times to secure more inventory. At least we carried more than usual inventory with us.

That was a conscious call we took because, as I said, we were first looking at keeping the throughputs going. Also during the month-end, some cargos which were stuck in SOS, they landed.

We did carry more crude into our tanks on 31st, 30th of June. Obviously, there is a writedown on to those given where the prices are, and one can say, 'Oh, you would have anticipated that drop,' but I'll be wrong in saying if I would have thought the crude will drop $25 in a matter of 2 weeks there.

To that extent, there will be a reversal automatically. How much?

Very difficult to predict because if now again going up at $95, if it goes to $120, there's a different reversal; if it goes down to $75, there's a different thing. In July onwards, we are carrying reasonable amount of markdown crude.

We did carry a lot of markdown crude, July we've been running markdown crude.

Got it, sir. One last question if I may, it's a housekeeping one.

What was the LPG loss on a per-cylinder basis for the quarter, and what is the kind of level we're seeing right now, if I can ask?

I don't have the quarter number. June, it was ₹680 per cylinder.

July, it dropped ₹490 per cylinder. Quarter things my team can give it to you later, you want the averages.

I just have the June and July numbers with me.

No problem, sir. Thank you so much, and all the--

Vinod giving some additional numbers.

₹510.

₹510 was the whole quarter.

For the 3 months.

For the 3 months, it was ₹510 per cylinder loss.

All right, sir. That is very, very useful.

Thank you so much. I'll come back in queue.

Thanks, Probal.

Thank you so much, and great effort on managing the supply chain in these tough times. My first question is if you can help me understand how should one look at the refining margin which you say is without the SAED impact?

When you transfer it within the firm from your refinery piece to your marketing piece, do you adjust for impact of SAED for transfer, or is it full price? How should one think about this?

Adjusted for SAED.

This is adjusted for SAED. The reported numbers are adjusted for SAED.

Even when our own refineries--

Sorry, Srividya is just giving an additional data point.

Even when our own refineries transfer to the marketing, it's done after writing down the SAED. Net of SAED is the transfer happening.

Okay. Even when you transfer it within the domestic universe, it's a ex-SAED impact.

Okay. Secondly, on the product side, there was this price increase on petrol, diesel.

Would it still have resulted in marketing gains, or is that still counted as the same price? See,

for the whole quarter, there is a significant under-recovery on this. This has been said even on the public platforms by a lot of people, including high-ranking government officials.

Just to give you a sense, the marketing under-recovery for the whole quarter was upwards of ₹26,000 crore, 20 of which was, and these are rough numbers, was of MS and HSD put together, and about remaining was on LPG. It was a significant under-recovery for the whole quarter.

Every liter which you and I were buying from petrol pump was being subsidized by one of the three OMCs.

Understood. Can you give a sense of, obviously the pricing has moved up again, is there still significant under-recovery at this point of time?

If we account for a combined margin, are you in a better state and in a positive territory, add your refining spread with your marketing loss?

I think this is a very, very dynamic situation. Just in last 3 days, the crude has gone up, 3 working days, it's gone from $85 to $96.

It's a very difficult one to predict, and given as it is, we have not given too many forward-looking guidances, though we gave some last year. This is the least time as a management team we would want to give forward-looking guidances.

Having said that, I will say that we were happier with July. We hope we will be happier with August, is what I would say.

There is no point getting into specific numbers because you guys can do your own backward calculation, you are very smart around it. It's a very dynamic time.

Before we speak tomorrow, if anybody caught the news today, one Saudi product tanker is on fire in the Red Sea. Houthis have done that.

That's at least floating around in the media right now, I don't know whether true or wrong. It's a very dynamic situation.

Crude could go $100 tomorrow, or it could drop $10. We'll have to take it as it comes.

We were happy with July.

Understood. That's very helpful.

Thank you so much, and all the best.

Hi. Good morning, and thanks for the opportunity.

Firstly, on the quantum of inventory movement, would you be able to ballpark provide that, as to how much was lost at crude or marketing? See, the

same question Amit was asked last time. Again, you leave that with us as a number.

All I would say, and I made that statement earlier, we were carrying higher crude inventory, and we also were keeping sufficient product. In a normal situation, I wouldn't have carried that much of crude in my tanks which I was carrying on 30th of June because we were apprehensive that war could go anywhere all the time.

It is a significant number. I'll give you one more cue, my team is going to kill me after that.

If you net it off, the lost number would have been on the other side of five-digit number by a good margin. Remaining you can calculate yourself.

Got it. On the Vizag bottom unit, you mentioned that you faced some issues with catalyst handling and all.

By when do you think you'll be able to stabilize that unit and start contributing fully to margins?

At 8:45 today morning, my head of refinery told me that he is hopeful of getting it stable very soon. Now I don't know whether he was evading that question at 8:00, that's the first call I make when I leave home to get to work.

Jokes apart, I think let's also recognize that it is a very, very technically complex asset. I've given this in the last call also.

Imagine running something at 380 bars at 400° temperature. I told last time, just to see how powerful that reaction is, the walls of that reactor are 25 cm thick.

It's a challenging situation. We are learning the art of doing it.

Even Lummus, who's the technology provider, has not run. This is the first time they're running a unit this large there.

Again, it's a technological leap HPCL has taken. Good thing it's an engineering problem, and engineering problems can get solved more easily than financial or pricing problems.

Our team is working on it. We are getting faster and smoother.

We are hoping to have good run on that in this quarter itself, and in the next quarter itself hoping to have it fully stabilized there. I hope I remain hopeful God will be kind to us in making our hopes get realized.

It will start giving us a significant thing. It will also, as I said, significantly shift HPCL's, with HRRL and Vizag VRMP coming fully on stream, on a run rate basis third quarter onwards, I would hardly be dependent on anybody except my own refineries and my JVs for diesel.

On MS, I'll probably need only 10% MS from anybody else. We are in that phase where we are really hoping our assets to start working on it, and as a CEO, I'm impatient for VRMP to get started soon.

As a practical person, I have to give my team the entire space to get it running and learn the technology. We'll get there.

We are very, very confident about it.

Thanks for taking my question, sir. Capital expenditure side, ₹1,734 crore kind of a capex during the quarter has seen a sharp reduction on the sequential basis.

Could you please share the number that expected capex for FY '27? In addition to this, suppose the FY '27 capex might be on a slower or lower side, considering that kind of higher under-recoveries on the oil products, which segment of our company, like refining, marketing, pipeline, or CGD, will take a hit on the capex side?

Any broader understanding if you could provide?

I think I gave the understanding on the broad numbers. We said ₹9,700 was the target we had taken for the year.

We expect it to be lower than this. Obviously, we will react to the environment.

If the thing is benign in the next quarters, we will spend some money. If it is not benign, we will conserve that money.

And ₹1,700-odd which we have spent right now also includes a lot of money which is been spent on buying equipment, catalysts, etc., for the upcoming turnarounds, which are absolutely essential for keeping our refinery running. In fact, all of the refiners have been delaying turnarounds in the last few months to keep the product flows going.

Which segments? I think a lot of it is around discretionary things, things we would want to do more.

Like I can always upgrade 200 pumps in a year, I can upgrade 1,000 pumps in a year. If I have more money, I will upgrade 1,000; if I have less money, I will upgrade 200.

On the refining side, the major capex has already been done. There are a few projects going on, but for a company of our size, spending ₹4,000, ₹5,000 crore on a 4-year, 5-year long project is not too much of an issue.

There will be periods where we can accelerate that spending. There are other things where we can spend in terms of I would say administrative expenses, upgrading some of our infrastructure.

Those things we can always postpone, like we can do it one quarter later. That's something the management team will take a call on, but nothing critical will be starved of funds, and yet the discretionary spends can be pushed back a bit.

Touching to the same, any number you would like to share with us for the FY '27 capex? Secondly, sir, India has a oil SPR reserves of around 5.3 million metric ton.

Was it available for all of these oil marketing companies or any refiner during the Q1 FY '27, considering the sourcing--

All reserves, all things were available to everyone. All I would say, not only HPCL, every single refining company and marketing company, private and public, collaborated extensively during this period to get the country out of the crisis.

The amount of collaboration which happened, I guess none of you can even imagine. SPRs were available, our own infrastructure was available for others, others' infrastructure was available to us.

If I was running short on something, somebody else was helping me; somebody else was running short there. It takes a lot of people to work together to get over a crisis like this.

It was a non-trivial situation. Many nations bulked under it, but we came out of it because all our companies, whether it is stand-alone refiners, whether it is private sector refiners, public sector, all of them worked very, very hard on this.

On capex, I've already given you number. Beyond that, as I've said, this call is not about giving any guidances, we have stayed away from that.

We have said the maximum we're going to spend is ₹9,700 crore. If there is less money on this year, we will spend less than that.

Hi, sir. Good morning.

Thanks for the opportunity. At the onset, I would want to congratulate you and entire team for navigating this very challenging operating environment.

Sir, my question actually was related to your refinery margins. Yesterday, along with you, BPCL also reported their numbers, and their refinery margins have been fairly strong as compared to our refinery margins.

I just wanted to understand in that backdrop, right, that what were our hits and misses which led to this significant variance between two similarly sized sort of peers in terms of refining margins, that is one. Secondly, you did comment on VRMP's stabilization and other challenges that we're facing in Vizag, which perhaps could be impacting the refining margin.

I was looking at the data for last 20 quarters, which is almost last 5 years, right? In this period, we have rarely reported refining margins better than our peers, IOC and BP.

I'm not even comparing it with refining margins of private peers, right? What is that that is leading to this challenge in terms of our refinery operations where our refining margins are consistently lower?

Because in the past also, we've guided for margins to incrementally turn better with expansion of capacity at Vizag and so on and so forth. Your comments on that, sir, and then I'll ask my next question.

Sure. I think on comparisons BPCL, I will leave it for you to do.

Not my job to compare with BPCL. I've picked up the phone and congratulated BPCL CMD on an exceptional performance from their side, proud of a peer turning out what the numbers are.

I have not spent time trying to dig through what were their refining margins. I have enough of work on my hand to do on what are my refining margins and where do I want to take.

I'll leave that comment on BPCL to you to handle. Remember, they have a higher refining capacity than we have, and there are structural things.

Refining is not just an easy top thing to do, it's a complex thing. On your second thing, I would turn the clock forward one year later.

You should ask me the same question on the same call, and you will have an HPCL asset which will have the highest margin. See, the margins are generated by the assets we have.

If you understand refining and go deeper into that entire thing, you will understand if I do not have a delayed coker in my Mumbai, I will not get a refining margin or uplift which, say, another refinery which has a delayed coker will have. I have a delayed coker which is already working in HRRL, I will get that uplift out there.

Second, our uplift on VRMP in Vizag will happen, that will take our distillate yields up from what it is right now to in '80s. There is also structural disadvantage Vizag has, two: one, if I compare it with a West Coast refinery, that's in East Coast, you always have to carry more inventory in East Coast.

Crudes are more expensive on East Coast. That refinery also does not have natural gas right now, which my other refineries have.

It's not just an apple-to-apple comparison that if you look at one reported number and compare it with other and say, 'Oh, this guy is good, and this guy is bad.' You have to look at what is that guy capable.

I have two kids. If I have two kids and one is capable of cracking IIT and the other one is not capable of cracking IIT, should I say that the second kid is bad?

No. I have to look at what is that kid's capability and what is that kid performing on that.

Having said that, we understand we need to improve that entire thing, and we are on track to improvement on that. Fair point, sir.

Sir, actually, what I was trying to get at is that, as you rightly pointed out, BPCL has a larger capacity, right, in terms of refining. Naturally, they would also be carrying a larger inventory.

While we were carrying more inventory than we usually carry, but I suppose so also did BPCL. I'm not getting into specific numbers--

You have to go to BPCL's analyst call and ask that question. You can't ask me questions on BPCL on this.

Fair enough, sir. I'm not asking that question on BPCL.

I'm just trying to understand the difference in the operation of refineries which could have led to difference in margin. Fair enough, I take your answer for that.

Basically, I I also wanted to understand this this quarter's refining margin somewhat in detail. When you say it's before SAED impact, right, if we build in the SAED impact, then what would be our refining margin to look at?

If you can give us a I understand that you don't want to give a an absolute number on refinery inventory losses, but a ballpark number around per-unit basis would be helpful for us for our analysis.

I think you guys are all smart to calculate the SAED impact yourself. If you need help on that, you can always speak to my corporate finance team, Vinod and the team.

They can help you understand the SAED impact the way you look at. What was the second part of that question?

Inventory, I've already said what I have to say. I will not say anything further on inventory.

Hi, sir. A very good morning to you and your entire team.

Sir, firstly, I have to congratulate you. It's a very tough environment that you guys have basically been functioning on and, more important, kept this country alive.

Sir, one thing, it's clearly a fact that the private guys were basically, in terms of market share, also small, but what you have done, all the three of you have been totally marvelous, and I'm sure that the country is definitely indebted to you because you've kept the wheels of the country running. Now, sir, my question to you is that the matter of fact is that you've done such great amount of work, your balance sheet has taken a hit, and of course, you have done this for the country.

There's absolutely no question on that front, as we've seen that our LPG today under-recoveries or whatever the negative buffer account is about ₹16,000 crore. Your marketing also has been subsidized for the best interest of the country, which is nearly to the tune of 20,000, as has been highlighted.

Sir, I'm sure that the government is obviously aware about the sacrifice which basically the company is making. Obviously, the sacrifice also comes from its shareholders, right, because the economic interest of the shareholders also is at stake.

With the great amount of work, the physical work which you guys have put in, and the financial hit we've taken, and with ₹36,000 crore of under-recovery which we've just faced in 3 months, which is staggering, can we expect a substantial amount of government support because this is done for the country itself? Can you please share, if at all possible, your outlook for this financial year?

As you said, it's a circle of life, '22 also we faced a similar period, and come 4 years ahead '26. I'm sure that what you've done is a splendid job, and I'm sure this company is becoming stronger and stronger, that is clearly evident from the refineries, from the physical throughputs, from the physical outperformance which you guys have done.

Sir, from the financial point, it'd be very interesting to get your perspective is that, and I'm sure the government looks after you guys for the great work you're doing. Thanks, sir.

Thanks, Sumeet, and thanks for your kind words. First, it's not my brief to talk on what the government's going to do.

I think there is a different set of people who should be talking on it, the questions probably are best addressed there. Having said that, there's been a lot of talk, and government's been talking about the fact that there was a way things have happened, and there was something which was done to keep the wheels in motion in this point.

I'm sure all those things would be taken into account. They have been taken into account in the past, and I'll draw your attention on to what was said at the analyst meet in Bombay last year, where the then Secretary and also the Honorable Minister actually talked about the fact that these assets are bulwarks of keeping the wheels of the nation in motion.

A lot of, I would say, support is there in different forms. What specifics, this is not the right forum to talk about that.

What's our outlook? As I said earlier, very difficult times to predict the outlook.

You guys have been tracking these oil markets for years, you will know. Probably you never have seen the extreme volatility which is occurring right now.

There have been eras for higher prices, there have been era of $20 prices also, but the spikes and the troughs which are happening, the frequency of the volatile nature is kind of unprecedented, and that has its own set of challenges in giving a guidance. Having said that, we are very bullish about the future.

Why? Two, three things: one, we believe a lot of homework has been done, some obvious, some not so obvious, some giving results right now, some will give results in the future, which make us a stronger company.

The fundamentals of the company are being worked upon. All of us are together in it, and everything which is there work on it.

Just as a simple thing, while we did not share and I refuse to comment on BPCL thing, our teams have been analyzing everything threadbare because we also want to see where is an improvement area in us. Not only us, we are looking at every single results which have been declared to find out our improvement areas.

Similarly, I talked about a lot of effort going on into marketing side, we talked about the new LPG launch. All those things are things which make the company stronger in the long run.

I hope benign conditions come. No management team ever wants a red quarter or a red year.

We are also a team which are very proud. Red quarter we cannot avoid at this time, but we would also not want to have red year.

That's all I would say on this, Sumeet. Hopefully, quarter two, the results would be better, and then we can be more sure about where the year is going to end.

Very difficult to predict at this point of time.

Sir. Thank you so much, and wish you all the very best, sir, because the only reason I brought this point up is because today the market cap of ₹80,000 crore clearly is not justified for the kind of valuable assets which the company owns, right?

Today, our plant and machinery value is ₹1 lakh crore, whereas we are being valued at 80,000. It just absolutely is absurd valuation.

That was the reason I just brought it up. Anyway, wish you the best of luck, and to you and your entire team, sir.

Thank you.

Hi. Just two questions.

Sir, what is the landed cost today for crude? If Brent crude is $90, then what will be the landed cost in India?

That's my first question.

Difficult to answer in any way because it'll depend on where you are buying, what crude you are buying, because you could buy an extremely light, low sulfur crude, which is at the premium to Brent. There are other things.

There could be a seller which is in a distress, wants to get rid of a cargo. It's a very difficult question.

If you ask me, 'What is my landed crude today of all I'm buying for my refinery right now?' I won't be able to give you that number also because it varies literally from crude to crude there.

My suggestion is, from your calculation purposes, just look at the averages rather than getting deeper. There are about 200 different type of crudes floating around in the market.

If we just take Brent, for example, if we're just buying Brent, is it fair to just add the shipping and insurance and is there some average number that you can give, $3, $4, $6 in terms of--

It's like you are asking me to predict the oil prices. I was just thinking as you're asking that question, I will throw it open to my team if they have any better guesses because even in this crisis, there are times when you have picked up crude which are discount to the Brent.

There is some other crude which is at a premium to the Brent. Every crude goes in at a different thing.

There are times when today that crude is at a premium to Brent, 2 weeks later that is actually at Brent, 1 week later it might be at minus to the Brent. Shipping and all is very standard.

Of course, shipping rates went up in the recent past, but that's a standard thing. I'm not evading that question, it's just that I don't know how to answer that question.

I wish I had a straightforward answer to that.

Fair enough. Sir, just one last question.

Last quarter, I think in June, there was a $200 premium on LPG buying. It was a spot premium.

Is there still something like that prevalent today, or has that completely gone away?

I think two things have happened. One, the Saudi CP price, which is one of the markers, has come down by about $200 per metric ton.

The second, as a reaction to the crisis, we have also diversified our LPG procurement mix. It's been said in public domains by a lot of people that we were all dependent upon 90% on LPG coming from other side of Strait of Hormuz.

Now that dependence, of course, it was not available, but even otherwise, there's a systemic diversification which has happened. There are Indian time charters which are going to US to pick up cargos, which never happened in the past.

Now because of the diversification, I'm less dependent on the spot, and as a result, the spot prices have cooled down. They are now, I don't know what is today after the latest hits which have happened, but by and large, they have cooled down a bit.

Also, we are much more resilient in the way we are buying right now.

I think that helps, sir. Thank you so much.

That's it from me.

Hi, thanks for the opportunity. Just a two question.

You already mentioned about the two things which led to the subdued performance in this quarter: one, you were carrying a little higher inventory at the end of the June, and you had that sharp fall; and second is the delay in the Vizag upgradation refinery performance. You said that if both things normalize in your expectation, if you're not carrying another higher oil inventory, and the Vizag performance would have been normalized, which you expect in a Q3 or Q4 onwards, what could have been your GRM, which you have reported around $24?

Just some idea on that, what could have been your number if these two things are not there?

I think difficult to give you a number offhand on that. Again, when I made that statement, you have to look at in the context of the quarter.

I would say things which have moved the needle a bit to the other side of a five-digit number. Remember, we talked about the overall under-recovery of ₹26-odd thousand crore.

That itself is a big number. HPCL, on its own balance sheet, carries about 50%, 60% of our total POL and other product sale.

If I keep LPG out of it, or roughly 55% is supplied through our own P&L, some part is supplied through our joint venture. We would always have that complexity of some of the numbers even in the best of the times falling through the consolidated numbers, and other coming to the P&L there.

Let's wait for a couple of quarters. When all these things are normalized, you will start seeing the uplift in the GRMs.

Right now, one thing you should all keep in mind that when you're looking at GRMs, everybody buys crude which is on dated Brent, some with 1 month, I think there were some with 2 months pricing, and this was unusual period. A high GRM is not only a reflection of a performance of the refinery, it is also reflection on the timing there.

Just to give you sense, again, there are days when I'm running a particular parcel, my Vizag refinery has given me above $30 GRM. Next day when you look at the dashboard, first thing on your thing, let's see, [foreign language] because next day, they are starting to run a different which is at a different price.

GRMs fluctuate based on the crude which you are buying. Refinery consistency and their performance is a structural thing, which can be altered over a period of time.

On a daily basis, If I had cheaper inventory in some days on a particular fortnight, say, my GRM could be sky-high.

Sir, if you could have had an access to the Middle East crude in this quarter, your Vizag refinery performance would have been much higher than what you have reported. Is that in a fair understanding?

In some ways, yes, because a lot of units in Vizag See, you all designed to certain specs. There is a part of Vizag which is designed for the spec.

Maybe Director Refineries can add to it, he is much more knowledgeable on this topic than I am.

In fact, many of our term contracts are targeted at Iraq and Saudi crudes and ADNOC also. Almost none of them came.

The alternatives are not readily available in the market of the same quality. Whatever impact, we had seen that and gone through that.

Thanks for taking my question, sir. I have the question about the Vizag refinery.

Your auditor highlighted that there is a ₹26 billion loss in the Vizag refinery, while your headline numbers of refining level GRM is very decent, $24. Can you explain the refining-level profitability versus the headline GRM?

I don't know here. Did you get

the question?

Can you repeat the question? The line had a static in between.

Sir. My question is that your auditor highlighted that at the Vizag refinery, there is a ₹26 billion loss.

It's mentioned in the notes section. What's the reason is that despite the very strong GRM you reported, sir?

We are just checking up, the team is just checking up.

This is ₹2,635 crore, that is after factoring in the inventory losses at Vizag.

Sir. It's only the inventory losses.

Okay. Yeah.

Sir. Sir, my next question is that what's the utilization we expect for the Rajasthan refinery in the September quarter and FY '27, sir?

How much is the product that you purchase from the third party, it is expected to replace at the full utilization level?

Sorry, can you be repeating the question? There's somehow static, or Varatharajan ji, if you got the question, you can repeat it, because at our end, we are getting some static when the question is being asked.

Sir, my question is about the Rajasthan refinery, sir. What is the utilization I expect for the September quarter, and also the full FY '27 basis, sir?

That's my question.

Please repeat. You just dropped off from the line in that period.

Yeah. Is it better now?

My question is about the Rajasthan refinery, sir. What is the utilization for the September quarter and FY '27?

How much is the product, third party, that you purchase, it's expected to replace at the full utilization level?

Okay. I think utilization, as I said, we are running at around 60-odd percent right now.

It's a new refinery, there will always be a few things here and there. For this quarter, we are expecting 50% or thereabouts utilization.

We are not going to hang our team for plus/minus on that because it's a new refinery ramping up. Refineries take time to ramp up.

On third quarter of this year, maybe October onwards, we're expecting an 80%, 85% utilization run rate, and by fourth quarter, we expect it to have close to full utilization on the refinery section. Petchem, as I said, will take some time to ramp up.

Till that time, we'll be able to sell the other products, including LPG, which is always a demand. Literally from today or tomorrow, we are going to start producing significant amount of LPG at the refinery.

On FY '27, we would expect sorry, I talked of FY '28, we would expect a full run on the refinery. We are quite hopeful of that getting stable soon.

In terms of what we are buying, if I just look at first quarter, just take HSD as an example, we bought about 50% is our own, another 27% is through joint venture, HMEL, where we have the marketing rights for the liquid products, and another 24% was bought out. If I just do fast-forward to next year, 56% of that will come from my own, including the VRMP things; 40% will be from joint ventures because HRRL can at that point of time; and only balancing will come from third-party refineries.

There are some places where it might be better to buy from them because of better serviceability, especially in down South. That's the dramatic shift we are expecting in the next 2 to 3 quarters, which will, as I said in my opening remarks, structurally alter our numbers, and then obviously with HRRL coming in and kicking in at good numbers, we would have a different set of comparisons through next year.

Thank you for the call, sir. I had two questions, one for Srividya ma'am and one for you.

On the seven points that you mentioned in your opening remarks, you talked about those changes. Now when you're thinking about these dynamic markets that we are in, where do you see the maximum room for improvement, especially you had got all these questions on refining in the previous participants?

Where do you see the maximum room from improvement, and where do you think you can uplift margins, either on crude sourcing or on energy costs you talked about, anything else you think you need to be more agile with in the refining side? On the finance question I had with Srividya ma'am was more related to interest costs.

I think the JV debt plus your total debt, how much room do you see in terms of lowering your cost of interest over the next 1 year or so? Thank you.

You want to take the interest question first? Srividya is going to answer first.

Hi, Mayank. See, as far as the interest cost is concerned, yes, definitely it's a major concern for us, more from the JV perspective if you look at it, from the HRRL perspective, wherein they have some high-cost rupee term loans which they have, and as they now have completed their commissioning.

There's two-prong approach: one is to see as to how we could refinance a portion of it. As you are aware, RBI has come with a fully hedged ECB, which can be used for at least a portion of it, which could be refinanced, and that will definitely give them a leverage of a minimum of 1.5% in the terms of the ECB.

The other one is that once that it is known that the refinery has been commissioned and there's been a stable operations, then we would be able to go back to the banks for repricing it. This is going to be the two-prong approach for HRRL.

As far as HPCL is concerned, in terms of the interest cost, the cost is not a concern for me, the more is in terms of the debt, in the overall size of the debt which is there. The entire approach is going to be in terms of how do we downsize the debt.

Downsizing will automatically bring in the impact of my interest cost, the finance cost overall coming down, and bringing the benefit and the improvement in the profitability. Hope that answers the question, and over to

CMD for answer. Thanks, Mayank, and I did read your one-page flash report.

I think I always liked the analysis you guys put together, even when it is not favorable to what I would like it to be, but it was a good quick analysis. Thank you for that.

Keep it flowing. I think the way you've said, I'll try to give it a more holistic answer to it.

It also tells you how, as a management team, we are thinking about it. See, when we are at a moment like this, there are two things you have to do as a team which is leading a large team, large asset base, and has a lot of those things.

Of course, you have to do the things of keeping everybody motivated, keeping everybody excited. We have a different task of how do we motivate our people after the loss numbers yesterday, we are again doing our town halls and talking to everybody, and talking about our futures there.

As a management team, there are two things we are looking at it: one is what are we fundamentally altering, and second is what helps me immediately in the short term. That's how I would answer your question on those seven parts.

On what could help me in the short term, frankly, it is crude sourcing and optimization. More volatile the environment is, more opportunity exists for short-term optimization.

There is a lot which we have done. Unfortunately, as I said earlier, we did carry a lot more crude on 30th June, and we didn't think the bombs will stop, or the crude will drop $25 in a matter of a few weeks there.

There are some very fundamental things we have done, like for example, I talked about HRRL coming on stream. There's a COT which is at Mundra.

We sometimes bring in VLCCs, and we use smaller ships to transport to Mumbai, which allows us structurally to avoid crude cuts and gets it cheaper into Mumbai. Things like ship-to-ship transfers, all those kind of things which allow us structurally to alter, and there are opportunities there.

There were a moment one day we were very happy because an event happened, and we had just negotiated our spot cargo, an event happened and we renegotiated it, we got $6 off. On a VLCC and $6 off, it's a lot of money.

2 million barrels, $6 off, you can calculate that number. I think that opportunities exists in the short run.

Second, in the short run, Samriddhi will give me benefits, and I'll talk of Samriddhi benefits in a minute. There are two, three things which will There's obviously sharper on costs.

HPCL has a good cost-consciousness. Last many quarters, we have been at it.

Every bit, small and big, matters. Just as a context, while in this a different form, tomorrow we have a event where 1,600 of our people have participated in a digital hackathon, 499 ideas for improvement, 30 of the final teams are going to be at our training institute, and all of us as the leaders are spending the whole day with them looking at their ideas.

That's just the building a bottom-up swell on many of these things. Those ideas will definitely give us benefit.

There will be short-term spikes on or short-term uplifts on things like I talked about using VGO for something, and pygas, and all those things, look at it. Those are short-term lived.

As a management team, the second prong we are working on is the fundamental shifts which we are doing, slowly moving things. Now you might see the Navya gas which we have launched.

Somebody might say, 'What will it do to 9 crore cylinder?' If in a matter of 2, 3 years, if I'm able to move 50 lakh cylinders to that, I move the needle on certain other things.

Similarly, there is branded fuels. Again, I don't want to talk more about it, you do your own research, but you'll find out that HPCL is doing quite well on those.

It does not show up on the numbers right now, but in 2 years, it will start showing up on the numbers. We talked about supply chain optimization tool which we are implementing.

It will not give me results this year. If I have to do further optimization, I still have to rely on Excel sheet.

Next year, when the crisis or anything happens, my team would have a state-of-the-art, latest digital optimization tool, which can allow them to do unplanned movement much more faster. Another area I'll talk of, RTCs and RTUs and APCs in our refineries.

We are making sure that all refineries, except HRRL, we'll do it a bit later because it has to stabilize, but both our other refineries are going to have a saturation of all this units, and wherever we are starting measuring, we're starting to get 0.4%, 0.5% uplift in the yield, etc. There are a lot of fundamental things which is there.

That's why I made that comment at the closing part of it: we are bullish about the future. Yes, there is a short-term hiccup, but we are very bullish about the future because there are dozens and dozens of those things which we are doing.

We have a very charged-up team. I told 1,600 of my colleagues participated in There are 499 ideas which came out of it.

They might be good, they might be bad. Somebody might say $5, somebody might say $500, and some might say $5 million.

But 1/5th of my employees participated in it. It's an exciting thing for management team to look at it.

Those are the fundamental changes we are attempting to make, which you look at it. Of course, from a quarterly results, the first bucket: opportunistic intermediates, some energy costs, some total cost takeout, those are things which should help in the short term.

I hope I've answered your question.

Vikas, thank you for that, and hope you get more $5 million kind of ideas. Best of luck.

Thanks, Mayank.

Yes, hi. Thank you so much for the opportunity to ask a question.

I've got two questions. Firstly, on the Rajasthan refinery, when we look at the globally complex refining and petchem greenfield assets, they face steeper stabilization curves compared to the brownfield expansions.

Given your recent hands-on experience with the intricate commissioning and unit integration at the Vizag, what specific operational learnings are you carrying over to the Rajasthan complex? Also, if you can walk us through the major commissioning timelines between now and December '26 or March '27 when you expect the refinery part to fully ramp up for this refinery?

Just to understand the confidence this asset will beat the typical industry curve for a timely ramp-up, so that's the first question.

Sure. Nikhil, I'll attempt a quick answer, then I'll request Bharathan ji to give more details.

You all know him from past, he knows this subject. I think we are actually very excited with what has happened on HRRL in the recent times, especially after how our team bounced back after the CDU fire incident.

See, we had a sequence, and I'm talking in layman's term, Bharathan ji will explain in terms of technical details more detail. As a layman, I would say we had a sequence of commissioning which was lined up, CDU and then DHDT, DCU, those kind of things which were lined up.

Lo and behold, we had the CDU started, we were hoping to sort of do the commissioning at that time, or at least the starting on that time, and commissioning a few weeks later in April when this happened. That caused us to do rework, shut down, take a shut down in CDU.

In June, we commissioned four or five major blocks within fortnight or maybe say 3 weeks. This include recommissioning of CDU, DHDT, the diesel hydrotreater, VGO, which was always working, we had taken a shut down, we restarted it, then we also committed the amine systems and the sour water, etc.

Those we all got it going. Delayed coker, I talked about it.

In fact, petcoke was the first product we commercially sold from there. It probably is unheard that a refinery got all the units in 6 weeks and 3 weeks, 3 to 4 weeks, everything got commissioned because we had the deadline of June end to get the scheduled commissioning.

What we did as a team is we pulled in best of our people from Vizag and Mumbai, and 150 of our people are stationed in HRRL right now to assist the teams on the ground to make sure this asset is up. As I said, PFCCU, which is the petro feed cracker unit, is literally on the block of commissioning right now.

It's a matter of hours by which we will be able to commission it. With that, from my perspective, bulk of the units on refinery are commissioned.

There are some units where we have a single train, like in DCU, we have one train working right now, second train should work in next 2, 3, 4 weeks somewhere. We have enough to process there.

The block which is left for a full commissioning is SRU, which we are hoping, by end of this quarter, give or take couple of weeks, would be there. At that stage, all refinery units, more or less, would be done.

There could always be small things, but come October end, we would expect the refinery to run at 80%, 90%, small things here and there. Bharathan ji, you can add with your--

I think timelines were given when the Chairman gave the opening remarks already, where it's running at 60% now, and Q3 it will be fully maximum utilization will come. All the individual units also have been in detail mentioned already.

I would like to also add that the MS production also started, LPG, though it's not a normal product after the petchem unit comes. Right now, we have started shipping out LPG also.

With this, all the fuel product which have been targeted are already under production, and gradually it will stabilize. The key challenge here for an inland refinery is any of the intermediate products get surplus, will not be able to move out coastally.

We are overcoming that by matching all the units at the right capacities and at the right time.

Nikhil, just one overarching comment. We've been talking HRRL at least the five or six times I've done analyst call.

I'm personally very confident on the team. It's going to get it in.

Remarkable job by our team, and this refinery will work. Very confident about.

There will be challenges, it always comes when you start a new asset, but we are quite confident of that we have the line of sight to the full run on this refinery. Petchem, we do have a bit more work to do, but till that time, we will sell LPG and other products.

Thank you, sir. That's very helpful context.

Just another quick question I had. You mentioned about that, under the stress scenarios, the SPR also becomes available to all the refiners.

How does that mechanism work? Is it more like you can borrow that crude from the reserves and you repay it back by crude oil at a later point of time, and you pay an associated usage fee or a lease fee, or does that work on some sort of a different mechanism?

Just curious. Thank you.

I think there are two, three different parts of SPR. Actually, some part of caverns which are next to SPR, HPCL has owns directly some part of the caverns.

We also own in Vizag a cavern ourselves. SPR, we did take crude from there, and so did others.

I think there is a permission you actually have to go to ISPRL board to do that, and you put in a requisition, they do that. It's, I think, at the market prices, and then there is some sort of agreed fee, etc., which is there.

That's one. The filling is done by government, but when we bought out crude from there, we got it out at the market prices.

There is a part of SPR which, if I'm not mistaken, is one of the international oil majors stores its own crude, that might work slightly differently. I'm not fully conversant with those details.

We did buy crude given that what we were buying from there was I think cavern in Vizag has Basrah, if I'm not mistaken. You couldn't even replace Basrah because nothing was coming out of it.

It was given at the market price and some fee, etc. ISPRL is good setup for doing that, and they are very quick on it.

There were times when we needed something urgently, very quickly we've got those. I think BPCL and others also took it.

Understood. Thank you so much, and all the very best.

Thank you, Nikhil.

Thanks for taking my question. Just a few of them.

Firstly, I must apologize to divert discussion away from the very exciting changes that you're trying to bring. This is more mundane, regular quarter-to-quarter stuff, sorry to disappoint on that.

Just if I were to look at the way crude price has moved from the end of the quarter to now, it's about a $20 move. If we look at that and the fact that last quarter the capex that you would have spent would possibly be on the lower end of your typical quarterly run rate, given the annual guidance, would it be fair to say that the current debt would be much higher than where it was at the end of the quarter?

Current debt would roughly be similar, give or take ₹1,000, ₹2,000 here and there. It's roughly the similar.

Just to give you some broad sense on the debt, I think we were looking at sort of this being again, very difficult to predict the future, but if today's situation holds, I think we are at the top of the mountain. I don't know whether it's a peak going down or a plateau, but it's roughly the similar at end of the quarter.

Okay. Could you also comment a bit about ATF losses?

How much do you estimate that to be for the last quarter? There was a mechanism suggested, but not all airlines took that mechanism.

How is that working out?

A good thing, Vikash, on that one is there are two others who have bigger problem to solve on ATF than I have. When this problem comes to my desk, I said, [foreign language] but I know, Srividya, if you have any thoughts on that.

I'll see if my team has, otherwise, if they don't have the details, we can give them to you offline. I'll be personally honest, I've applied myself less on ATF considering our market share is not the largest on this one.

Vinod will help address that separately with you.

Hi, sir. Thanks for taking my question.

I just wanted to get the number on refinery-wise GRM--

Yeah. I just wanted to get the refinery-wise GRM across all three refineries, and some performance update of HMEL.

I think on GRMs, we have been very consistently giving what we have given out, and we'll stick to that level of exposure. We've been very consistent with it.

Sure. Thanks.

Thank you. Thank you for taking my question, and congratulations for HRRL commercialization.

Only one question remains. Regarding accounting of HRRL, will we show it as JV only, for instance, like share in profit and loss of JV, or will it be consolidated in the financial statements?

It will be a JV accounting, it will be a share of profit.

All right. Thank you.

That's it.

Thank you, everyone. Sir, if you have any closing remarks, Mr.

Kaushal, please.

No, I think we've said enough. I'll only say, if anybody has follow-up questions, our team is always available.

If anybody wants to meet us, we are more than happy to look at it. As you guys write your comments, do share with us, we'll also learn from whichever way you are looking at it, as I've always said.

You all look at it from different perspectives, it's always interesting to look at what you have to say. We look forward to all the comments there.

Thank you for patiently listening to the thing, a lot of good and interesting discussion. I'll just sum it by saying it's been a tough time for this industry, but at the same time, tough time make people stronger, teams stronger, and ours is a very strong team, as I said, we are hungry, we are mean, we are keen to perform strongly, hopefully things will be better when we meet next time, 3 months from now.

Thank you all.

and thanks everyone for participating in the call, and for HPCL to continuously giving us this opportunity to host them. Thanks everyone, have a nice day.

Thank you.