Note: This is a preliminary transcript and may contain inaccuracies. It will be updated with a final, fully-reviewed version soon.
Hindustan Petroleum Corporation Limited (NSE: HINDPETRO) Q3 2026 Earnings Call dated Jan. 22, 2026
Corporate Participants:
Rajneesh Narang — Chairman and Managing Director
Unidentified Speaker
K. Vinod — Executive Director, Corporate Finance
Analysts:
Varatharajan Sivasankaran — Analyst
Probal Sen — Analyst
Sumeet Rohra — Analyst
Yash Nandwani — Analyst
Unidentified Participant
Achal Shah — Analyst
Unidentified Participant
Sabri Hazarika — Analyst
Amit Murarka — Analyst
Unidentified Participant
Mayank Maheshwari — Analyst
Unidentified Participant
Presentation:
Operator
Ladies and gentlemen, good day and welcome to Hindustan Petroleum Corporation Limited Q3FY26 earnings conference call. As a reminder, all participant lines will be in the listen only mode. And there will be an opportunity for you to ask questions after the presentation concludes. Should you need assistance during the conference call, please signal an operator by pressing Star then zero on your touchstone phone. Please note that this conference is being recorded. I now hand the conference over to Mr.
Vardarajan Sivasankaran. Thank you. And over to you, Mr. Sivasankaran.
Varatharajan Sivasankaran — Analyst
Thank you, Ranjan. A very good morning to everyone. It’s my absolute pleasure to welcome all of all the participants and the management of HPCL to the results conference call this time around as well. Chairman, Managing Director Mr. Rajmish Naran, Director, Finance Ochis Bharatan, Director, refineries director and Mr. K. Vinod, executive Director, Corporate Finance Vikas Paul to be the introductory panelist. And then we can move on to the Q and A. The floor is yours, sir.
Rajneesh Narang — Chairman and Managing Director
Yeah. Good morning Shivant. Thank you for the introduction there. As Shivant said, I’m joined by Director of Finance Directory Finerage Vinodidi, Corporate Finance and a couple of other colleagues from our finance team. I’ll start by wishing everyone a great 2026. It’s a pleasure talking to you all on this call for quarter three results. Like in the past analyst calls, we’ll talk about the current performance and future action. We’ll bucket it into two parts. I will not go too deep into the numbers.
Some of you have already analyzed it already. But at least I’ll try to give the commentary on it. But before that going into these two buckets, I wanted to talk about the highlights of the last three months. So in some ways HPC has killed one of the questions which used to come in the analyst call on when are you going to commission Vizag? So we are very excited that we commissioned the RAF project in Vizag a few weeks ago. Obviously you guys would have caught the stock market information and the media releases around it.
We believe this project is a milestone for in technical advancement for HPCL and the Indian refining industry. Those of you who understand this project would appreciate that it is the extent of deep conversion which is being planned here. Taking the bottoms to a 93% conversion through the LCMAX technology has not been attempted elsewhere. It’s the first time in the world and we are mightily proud about that. The other interesting bit is just to give some tidbits around it. The project itself is an engineering marvel.
Some of you might have had an opportunity to visit that in the past, but if not in future, we’ll have some of you, those who are interested to come and see the project. Just to give you a small context, the three key reactors are 2,200 tons each. They are one of the heaviest things put in a refinery. 2,200 tons each. The walls are. They are thick walls because they run at 420 degree centigrade and 200 bar pressure and the walls are 25 centimeter thick. Imagine being inside of SLV. So that’s the context of it.
The beauty of it is a lot of these reactors were done in India. So that’s why both we and many of us in the sector are proud of what has been done, the status. We are getting steady stream of hst. We are slowly bringing other units in and learning how to run this as a complex thing project. With that we have also done a digital twin. It’s called M Cube again comes with the licenser itself. So we are starting to populate digital twin also. We are targeting a performance guarantee test which will mean 100% utilization somewhere in March.
So this quarter will be one of stabilization and post that next full year we are anticipating financial results there. All of you are very curious about numbers. I can tell you that the crudes which we are buying because we are starting to factor in roughly into our crude baskets. If we just do the analysis with rough, without rough, we are easily Getting on paper $2.5 per barrel kind of guidance which we had given to the stock markets. Of course you have to translate that into physical performance.
This is still at the optimization level. So overall HPCL team is mightily proud of what has been done and of course we’ll be happy to take on the questions. The second big elephant. Well, that is also progressing well, at least the first part of it. All four pipelines have been commissioned. A lot of the units are in the process of commissioning. We have crude in the refinery already. Natural gas is already in the refinery. Both Mangla and imported crude are in the refinery. Multiple units like boilers, priority crude tanks, etc have been done.
We’ve got the peso approvals and as we speak we are doing the commissioning process in the CDU plant. We’ve explained in earlier analysts called the commissioning sequences run few weeks. But we are right in the middle of a commissioning sequence and once the CDU is done then obviously the downstream intermediate products and other products will come out. But. But we are expecting the products to be first tranche of the products to be out in February and ramping up the refinery to full capacity by quarter one of the next financial year.
This will be as you can imagine a Greenfield takes a gradual ramp up. Petchem will take maybe a quarter or so more but right now we are focusing on getting the refinery up and running again. That would be the most complex greenfield refinery ever attempted in India. You would have also read about the ADNOC cash deal. We had done a heads off agreement earlier but earlier this week we closed the sales purchase agreement for a 5 million tonne 10 year deal with Adnoc. There are a lot of other things which are in progress but I want to keep time for questions so I’ll skip those.
You can ask us in the questions. In terms of physical performance, the key things I wanted to highlight are obviously our sales grew up by 3.1%. Interestingly a lot of our sales growth has been on the retail side not on the bulk side because we have very consciously looked at in fact all of our sales increases literally coming on the domestic market is coming on the retail side because bulk went on huge discounts which we did not chase that market. Instead we were steady and we didn’t go after the volume numbers but we went after the value numbers and happy with our growth there.
Refinery throughput is 6.38 103% utilization tad lower than what we should think it should be refinery GRM say.85. I’m sure there is a question around lower than this. Higher than this. Well this is after absorbing the impact of BAT crude which if you see the Mumbai refinery GRM numbers are lower. If there was and what let’s say that had happened because there was no BAT challenge we had or the contaminated challenge we had in Mumbai our GRM this quarter would have been 10.24%. So curious of you can quickly calculate the impacts etc around it.
So yes we did lose GRM because of the incident. There’s been strong performance on other businesses also so I’ll not delve deeper into that. Moving on to the financial performance there’s a continued strong run Q3 profits 4,072 on a standalone versus 3,023 up by 32.6% steady performance over nine months from against 4,000 crores you’ve been earning 12,274 crores up 206%. If you just see the last five quarters and it’s not a flash in the pan performance we have been steady over the last five quarters we’ve roughly earned 1300 crores per month of pact, give or take a few crores.
So it’s been a steady 15 month run during this period. Obviously this results in significant cash generation around 25,000 crores or thereabouts. This has allowed us to deleverage. Beginning of the year our standalone leverage was at 1.37. We had given a guidance of about 1.15 to 1.2 to the market. We are much below that. We are at 0.86 for this quarter. Having said that, I also want to caveat that this would be higher for Q4 because of the cyclical nature of our business and the year end stuff.
But we will end the year lower than our guidance of 1.15. The interesting bit is the lower leverage is starting to show up in our P and L. If you Compare interest in third quarter of this year, interest of third quarter last year, this is about 250300 odd crores in that range lower. So we are paying on a monthly basis lower interest which is starting to flow to our. There’s been a marked improvement in our performance and we are very bullish about our future as analysts. Sometimes you question whether it is flash in the pan, will it stay etc.
How will excise impact it etc. Well, we don’t look at it that way. We look at it the fact that operationally we have improved the performance and impact of this business. To me three things have happened and I wanted to call them out as my insights onto the call. First the operational efficiencies have come in. We had promised them on these analyst calls. We have been working on it but they are starting to show up in our P and L where it matters the most. In a way we are lowering our breakeven and more importantly we are building in a culture of efficiency.
We are altering the culture we had in terms of the way we were working earlier to work in this new paradigm. I just wanted to bring, you know, you noticed two or three very interesting facts which excited me. If I just look at opex’s turnover because that’s a clean ratio I think because you know other things can get muddled with how much product I’m buying etc. Etc. On quarter three last year my opex to turnover was 1.60% on quarter three this year it is 1.37% if I remember my numbers correctly.
So just one year down the line for every rupee we are selling we are. Every 1000 rupees we are selling we are spending less money in earning that that to Me is a real operational efficiency which builds in. If I look at a nine month number, the nine month last year was 1.47. This year it is 1.36 which also tells me that the quarter three is something where the gap is higher. So our capture of efficiencies has exceeded accelerated as we have moved quarter to quarter and this is starting to show in rupees per ton.
Quarter three last year we had 14,773 as rupees per metric ton. This year it is 1278. For nine months it has dropped from 1371 to 1246. So real numbers which are changing and which bode well for the future. Our program on Samriti has helped us on that. It gave us benefits and it also allowed us to deliver a reasonably good quarter despite the challenges we had. I personally am not happy with the numbers. I thought it should have been higher than this. But despite the fact that we had a significant challenge, we were able to deliver a strong quarter.
So that was the first I said three things have happened differently. First, operational efficiencies have kicked in. Second, the deleverage I talked about the greater lower interest cost, greater flexibility. Our finance team’s been very diligent in managing the debt levels. We have refinanced certain things and the difference is starting to show. Compare the numbers on interest costs drop in the first nine months and interest cost drop in the last quarter. You will realize that portion is also accelerating and it is very natural as the leverage comes down that will.
And it’s not only the quarter end debt which you see, but we look at the average that sort of quarters are coming down as a result, the lower interest burden is there. The third thing is we have created the right to grow for our next wave. Many who, many of you as analysts, many others who had looked at HPCL had concerns about HPCL over the last year, year and a half, our delayed projects and all those kind of things. In last one year we have solved the harder exam questions. Our projects are coming to a fruition.
Yes, they have been challenging journeys. It’s very difficult to do capital projects in India but they are starting to come up to stream. So the harder exam questions have been solved and there is tangible progress in projects, operational improvement, etc. I think each one of us can have our own judgment on how it is look at it. I know many of you still remain skeptical at times it reflects in the share price shifts, the volatility of that. But we at HPCL are very convinced that on the direction and path forward and the momentum we had.
Let me very quickly talk about the future. It’s the time when we start thinking about the future. 2026 promises to be a great year for us and we are geared up to make the most of it. I talked about wisex, Wysag. The benefits should start flowing in where you guys would want to see them the most which is the PNL commissioning will happen. The stabilization journey will be a reasonable one and a challenging one. But we are geared up for that. And the good thing is that’s an easier problem which we are all capable of solving.
Now that the asset is coming to closure we will also start looking at the financial impacts and maybe in subsequent quarters. We’ll tell you how we look at absorbing the first few quarters which would be some challenges. There are other projects which will also start giving benefits. Let me very quickly move on to what are the focus for our next year. There are five or six focus teams as the management team. Maybe four focus teams as a management team we have first we are going to focus on efficiency drive.
Samriti 1.0 has till date given us 501267 crores of benefit of which 1518 is one time or other way around. Repeat is 749. Repeat is 7. Repeat is 1.
Unidentified Speaker
I will
Rajneesh Narang — Chairman and Managing Director
Give you the details but 1267.
Unidentified Speaker
519. Sorry 519
Rajneesh Narang — Chairman and Managing Director
Is recurring. I got the numbers wrong on my sheet and 749 is one time. The recurring ones are being built into the plan. We are already starting work on Samriddhi 2.0. In the first phase we got to the things.
Operator
Ladies and gentlemen, the management line has been disconnected. Please be on hold and we quickly get them reconnected. Sam. Foreign. Ladies and gentlemen, the management line has been reconnected. Please go ahead.
Rajneesh Narang — Chairman and Managing Director
Sorry we got disconnected. I was. I’ll recap. I don’t know when we got disconnected. I’ll start on the focus for next year. As I said Samridhi 1.0 gave us 1260 crores of benefit till now of which 518 is recurring. 749 is one time. The recurring ones are being built into the plan and we are starting to plan for Samriji 2.0 where we will target the harder to do more fundamental initiatives and this time we will run with external support. In the next analyst call we will give you the guidance for the next year.
But there will be a guidance coming on. What is our target? We will be very transparent with you on what is our target for next year. The second big initiative we are doing is Digital Focus. We believe that is the way to transform the organization to the next level of excellence and competence. We have done an exercise where we have laid out our digital acceleration roadmap. This was done with one of the leading global consultants and we are now starting to think through the implementation plan.
But the focus of this would be on three key aspects. One Value capture, needless to say, that drives everything. Second, there are process and efficiency improvements including increased use of AI and other taking some of our processes which are still being run in a paper way and make them completely digital. And third is preparing for the HPCLO future which is about imagining our future so you can expect progress on all three initiatives. Third area we are focused on is our customer focus. At the end of it we are a customer facing brand, one of the largest ones in India.
To reinforce our customer effort and I hope some of you have visited our retail outlets. The recently renovated retail outlets. You’ll see the look and feel of them are by far the best in the market right now. See some of the city outlets we have done. We are doubling our effort on strengthening our customer focus. We have tweaked our retail organization to bring it closer to the customer. Improving delegations, strengthening the field and fighting the battle. The retail battle that is going to be one of the top priority for next year because as I said we are a consumer brand which wins and loses on the consumer forecourt.
In our case we’ve also created a separate CGD vertical which we’re running it as a separate division now and in some ways preparing for growth and potential value capture in the future. Petcamp we are already in the process of launching that business and in lubes also as you said in the earlier calls, we are doubling down on the customer segment. The theme around it is we are making our businesses more customer facing and strengthening the brand. Some of you would have seen increased advertising from us and claiming a rightful place as one of the most premium customer facing brands in India.
So if you go, please go to our retail outlets, innovated ones. If you have feedback for us, give us you see a lot of improvement in those retail outlets. Some of them we have not been able to do the whole network but we are slowly getting there. The fourth area we are going to go deeper in the coming time is deeper into the green and alternate energies. We have already done some focus on that. We have our CBG plant at Padang has been running for now 612 months. We have been improving the efficiencies getting to the basics of it on renewables we have done mostly captive but we are starting to see how we can extract more money around it.
And gas business. I just announced talked about the ADMOC gas deal. So with that we are also going to be planning for our next wave of industry growth. So those are our four agendas as a management team for going forward. Before I stop, let me. I’m sure there’s a question on everybody’s mind on the Mumbai refinery. Well, the issue is fully behind us. We came back to stream fairly quickly and managed issues there. So I think there are only residual matters to be solved which are more of financial and commercial matters.
But the asset is running back and full and the run rate GRMs would be what they ought to be on an asset of that scale and class. So I want to reassure you that that is back on stream. Wanted to thank you for your continued interest in HPCL and our journey. We are on a solid trajectory and are committed to delivering for all our stakeholders. Let me stop here and we can throw it open for questions.
Questions and Answers:
Operator
Thank you. We will now begin the question and answer session. Anyone who wishes to ask a question may press star and one on the 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 will wait for a moment while the question queue assembles. The first question comes from the line of Prabhal Sen with ICICI Securities. Please go ahead.
Probal Sen
Thank you for the opportunity. Very good morning sir. First of all let me thank you for the briefing that you gave. Extremely to the point and extremely useful in terms of the issues to be looked at. Thank you for that. Just a couple of questions. Firstly, with respect to the ADNOC deal, can you just share some details in terms of the sort of.
Rajneesh Narang
We are. We can’t hear you. I don’t know. Mr.
Operator
Rohra, please go ahead. Mr. Rohra, please unmute yourself and go ahead with the question.
Probal Sen
Yeah. Hi.
Sumeet Rohra
Hello. Can you hear me? Yeah. Yes, please go ahead. Yeah. Hi sir. A very good morning to you and your entire team. So firstly, I mean you know I would like to congratulate you on a fantastic performance as you reported. So you know, it is so heartening. I mean, you know I’ll take a few minutes of your time to talk to you as an investor. It is so heartening to see, you know our company reporting a profit of 12 and a half thousand crore in nine months and on cost to do a profit of 15,16,000 crores.
So there are only 25 companies in India today, you know, who actually report a profit of more than 15,000. So extremely happy with you guys. I mean you guys are doing a wonderful job. Congratulations on that to you and your entire team. But you know, this just a couple of things I would like to bring to your attention. If that’s, you know, today, you know, in spite of being, you know, the 25th most valuable company in the country, you know, our market cap, you know, is clearly, you know, divergent as we rank today at you know, 117.
Now sir, the reason why I bring this up is today because you know, the great work which is, you know, being done by all of us, you know, is not being translated into market cap. So clearly you know, there is some, you know, kind of fear or apprehension which is, you know, kind of weighing on the stock price. Because today, I mean you look at it, you know, our roes are at 28%. Now I can’t find any company, okay who is trading at a five and a half times multiple and has a 28% ROE and a 6% dividend yield.
I mean today we trade at a 50% discount to asset value. Now sir, you know, of course these are India’s companies and this is India’s wealth. Hence I touch upon this crucial aspect of market cap. And sir, I would really humbly request you, you know, to please look into this because it is clearly ambiguous for a great company of this size, you know, to trade at a market cap which is, you know, trading under the market caps of you know, the quick commerce companies etc, which are trading at 8 times sales and whereas we trade 0.2 times sales.
So since these are important matter, I wanted to bring this up now. Sir, I just wanted to only ask you one, one thing is that can you quantify the impact of the Hindustan oil, you know, impact, how much is that in terms of quantum and sir, that’s it. Sir, thank you so much for your time.
Rajneesh Narang
Thanks for your compliments. We take them graciously and humbly on the market cap. Let me opine on that. See I think you guys are better judges of market cap than a management team. The management team can be held responsible for delivering on the promise which we have given and we have consistently over the last many quarters delivered on the promise. Not only many quarters. Couple of years ago we had laid out a path of taking 40,000 crores. As EBITDA we are towards that on that journey. So we hope the sentiment also Turns around it I’m the CEO running the company.
But if I was an investor I would have taken a different decision knowing the strength of the company right now it is a really strong company and up to you guys to make what value it should we figure out on it the impact of bat. I would not like to give a number. As you can imagine something like this is is in disputes and there are claims and counterclaims from parties around it. But what we can easily say is that the Mumbai GRM was down by 3.5. You know the numbers around
K. Vinod
300.
Rajneesh Narang
So overall basis
K. Vinod
There will be a dollar improvement. Yeah.
Rajneesh Narang
So the Mumbai refinery GRM for the quarter was impacted by 3.5 because of the total impact of it. If we had been higher, if we didn’t have that incident we would have been higher by around $3.50 per barrel in Mumbai and overall HPCL we would have been instead of 8.8 or whatever that number was we would have been 10.24. So dollar plus kind of a barrel per barrel impact for overall HBCL. I would want to give the exact numbers or calculations there because you can imagine that there is a claims and counterclaims on those kind of aspects.
Sumeet Rohra
Thanks sir. And sir, I mean sorry if I may just ask one thing. You know sir, I mean continuously that there are perpetual you know talks of FE about excise duty. I mean you know whatever I can understand as an investor and you know tracking the sector for the last few years. I mean the government has been very prudent and you know, stable in its approach. And you know the policies are very much stable. As you know the oil minister had spoken in the you know, analyst meet which you guys had organized.
So sir, can you basically allay some fears Because I mean the government actions are very clearly stable. But you know our friends in the community keep on emphasizing on you know, excise duty which is kind of, you know creating havoc in investors minds, you know. So if you can clear something on that, it’d be wonderful sir, thanks a lot.
Rajneesh Narang
That’s a great question. I also read about those reports and I’ll opine on that. But see it’s not for me to comment on what Government of India’s policy on excise duties. It is for government of India to comment. So I will not delve into that topic. For me whatever is the duty is the law of the land. It is applicable to everyone. Now coming to the point, there are two aspects I would like to say. What can I do about it? We as a management team can prepare for different scenarios. Crude goes up well, that’s the scenario we have to prepare.
Dollar or rupee depreciates against dollar. That’s the scenario we prepared. We dropped significantly yesterday. And how do we prepare? We prepare by lowering our breakevens, by improving our operational efficiencies. That is what we have been doing and that is within our control and we as a management team are responsible for that. That’s why we did Samriti 1.0. That’s why we are going to do Samriti 2.0 and that’s why we are doing digital transformation, because we want to capture in all the efficiencies we can capture in.
And a stronger company will be much more resilient to bear any challenges. Whether it is an excise duty change, whether it is crude volatility, whether it is exchange rate volatility, we will be ready to. So we are working on the fundamentals of the company, not necessarily just on the excise duty. On the issue of excise duty, I think that’s a favorite topic for many of you. You guys seem to know more about it than we do. The only joke, I would say if I total all the recommendations which came out that excise is going to be increased this week, in next week, over the last quarter or two, then probably the excise would have increased by 20 rupees by now.
Because every day one of you puts out a recommendation saying excise, maybe you have more information than we have. You put out a recommendation. Obviously our shares drop after that. But that’s not for me to fight the battle. It is for the investors to figure out who’s giving right advice, who’s not giving. Some of you have been calling Excise will be increased this week for four or five months. I’ve been noticing it has not increased. And if people still want to believe those investors, then those people, it is their call.
It’s not for me to judge whether what you know about excise duty or not. It is for me to prepare my company for every eventuality that part me and my management team are responsible for. Otherwise, you guys are free to believe whose view somebody might know that they’re better on excise duty than they can give. It’s very easy to give a scenario 1 rupee change in excise duty will drop. By that math anybody can do. But then some people have been writing about this for six months without an increase.
And if people still believe those reports, then they must be very well informed, I must say. But for me, I have to just worry on what is the law of the land today, what will be the law of the land tomorrow and respond and take my company forward with that. That’s all I have to say on this. The fact that we are traded at 50% of you gave some numbers discount to market cap, etc. As a management team we want to better it. But then we are not in the middle of fighting the bulls and the bears. We are in delivering the performance for hbcl.
Sumeet Rohra
Thank you so much
Operator
Sir.
Sumeet Rohra
I wish you all the best and good luck sir. Thank you sir.
Operator
Thank you. Next question comes from the line of Prabhul Sen with ICICI Securities. Please go ahead.
Probal Sen
Thank you for the opportunity, sir. I hope I’m audible right now. I apologize for the disruption earlier. Yeah, dropped
Rajneesh Narang
Off. Rahul, you said something on ADNOC deal?
Probal Sen
Yes, I just wanted to understand, sir, is it possible to share any pricing framework that has been agreed? This is a Brent Link contract I would imagine. Or you know, what are the pricing terms and you know any range that can be sort of spoken about.
Rajneesh Narang
Yeah. So Prabhal, thanks. This is a Brentling deal. Obviously we will not give the pricing ranges here. But all I can tell you is one of the very competitive deals which we have done 0.5 mpa for 10 years, the gas is going to come from Middle east sources. It’s basically the source, not a trader gas but a source gas. That’s very competitive, I would say.
Probal Sen
Understood. And the second question sir, with respect to the Rajasthan refinery, you know you mentioned, I think about the first branch of downstream refining products will be likely starting from Feb and Petchem will follow basically a couple of quarters. So is it fair to assume that FY28 we will have the full capacity alongside the Pet Chem? You know, conversion of every barrel in place for this refinery?
Rajneesh Narang
Yes, that’s a fair assumption. Things can always go here and there but that’s a fair guidance we can give.
Probal Sen
Right. And sir, with the current margins being what they are, as far as PetCim, obviously you would have done your budgeting at a certain pricing level. Are we comfortable with margins being what they are at least for the first couple of years? Is that something that’s factored in or is it? I mean, what I mean to say is are the returns going to be impacted if margins for Pet Chem remain as low as they are right now? Just your sense of how you’re looking at it strategically.
Rajneesh Narang
Prabhel, I’ll actually, you know, you guys know I was a service professional for A long period of time before I came to run the asset company here. I look at things very differently. I’m to be very, very honest, while we have done the financials and done to keep an eye on the scenarios, that is actually not which is on top of my mind. Because where I or HPCL or HRRL stands right now, whatever is the cost, whatever is the external market, whatever is the prevailing prices, is a fait accompli at this point of time.
What is most important for me is how fast, how smoothly, how efficiently can I look at it. I can assure you that 100% of our teams are focused on that. Yes, some people in finance do the numbers, etc. But am I losing sleep on the numbers, on what they’re coming? Absolutely not. But if a vessel which is going to be dispatched to Barmer, if that gets delayed by two days, that’s where we lose sleep on. So we are absolutely razor sharp focused on closing out the refinery and bringing it on stream. Everybody has done those numbers and I’m sure you guys have your own numbers.
As I said earlier, we will come out with transparent numbers. We have been very transparent in giving the guidances over the last few quarters wherever we want to be sure of the guidance. But right now I’m not even bothered about what is there. What if the crack is lower, what will I do with it? I still have to run that asset. The good part is I have an integrated asset. We could sell more diesel. We will have multiple options. The crude which we can pump in, we are already doing the simulations on what crudes we will run in different scenarios.
We could do liquid products to some extent. We could sell LPG and naphtha and not crack it. We could crack it and eventually we could even do downstream. So the fact that it’s going to be an integrated asset gives us a lot more flexibility and we will use it to the hilt based on the numbers prevailing at that time. For the moment, the whole focus, 150% focus is on completing the asset as quickly as it can come on stream. Whatever be the costs or the margins. That’s a secondary question.
Probal Sen
Understood sir, Perfectly clear. Third question, if I may ask one more is as far as Vizag is concerned, you spoke about the massive changes in terms of the bottom of the barrel conversion on an overall basis for Vizag. Therefore, what kind of distillate yield can we expect once the commissioning and once the stabilization is done of the rough unit?
Rajneesh Narang
So 82% distillate yield. We were Vizag, if you recall. A few years ago was in mid early 70s. Mid 70s
Probal Sen
We’ve done two
Rajneesh Narang
Parts of it. The capacity expansion, the BS6 etc. We had done and then subsequently we have once the this is 82% is the full guidance we have given and we are confident it will come to that level.
Probal Sen
Got it sir, one last housekeeping question. What kind of capex have we. Are we looking at closing the year for this year and for 27? Any guidance on CAPEX and if you can break it down in terms of. Segments that will be given guidance
Rajneesh Narang
I will not give right now because our board has not approved that. We discussed it in the board yesterday but there’s going to be another round of discussion but broadly it will be in the line of similar numbers. What we have done this year’s capex we had told you earlier that we are going to be lower on capex so it might be a shade under the somewhat under the budgets which we had planned. If I keep HRL side overall it might be in 13,000, 14,000 crores. If I remember the budget number was 15,000 crores so it might be slightly low, tad lower than that which is not bad for us because we were running a high leverage.
We consciously picked and choose where we could look at investments. In terms of nature of investments going forward you can expect a wider spread because the last five years the capex was very skewed towards refining. You would expect a wider spread across different assets including increased marketing expenses, some new energy expenses, new exchange energy capital in the next five years. We will work out those and come out with the guidance at the right time.
Probal Sen
Thank you sir. Congrats on a good set of numbers and all the best.
Rajneesh Narang
Thank you Prabhupada.
Operator
Thank you. Next question comes from the line of Yash Nadwani with IFL Capital please.
Yash Nandwani
Thanks for the opportunity sir. So my first question is on LPG doses. What was the loss per kg in the quarter and how is it shaping up in January after the increase in Saudi CP prices?
Rajneesh Narang
If I remember last quarter was 2 digits so 39 or something 35 somewhere in that region per cylinder. And for this quarter the under recovery is higher because CPU prices have gone up. I think it
K. Vinod
Was around. Around 30. 30
Rajneesh Narang
Yeah. Vinod will give you that answer. Around
K. Vinod
35 rupees per cylinder and during the quarter three we had an under recovery of 503 crores. Going forward the CP Saudi CP has gone up so we are expecting the cylinder prices the under recovery to go up by close to under 120 rupees percent.
Yash Nandwani
Okay sir. And secondly sir, just wanted to understand if there was any impact of inventory losses during the quarter. And if. Yes, could you please quantify that into. Refining and marketing segment
K. Vinod
In marketing there was a gain of 40 odd crores. And refinery which is part of the margin is about 540.
Yash Nandwani
Sure, sir. And lastly sir, the book question on HMEL, if you could help us with the EBITDA and pat for hmel.
Unidentified Participant
The HMEL ebitda was around 4000 crores. And mind you, the company had taken a turnaround during this quarter for almost 40 days.
Yash Nandwani
Right. Okay. Thank you so much.
Operator
Thank you. A reminder to all the participants, please restrict yourself to two questions. Next question comes from the line of meet Parikh with Mihir Shah and co. Please go ahead.
Unidentified Participant
Hi sir. Thank you for the opportunity. My question was I wanted to reconfirm the HMEL number that you said was 4,000 crores for the quarter.
Unidentified Participant
For the nine month. Nine months.
Unidentified Participant
Right. And sir, what kind of ROC like HMEL is a very mature asset now. So what kind of ROC are we seeing on that asset now if you could your sense of
Unidentified Participant
I don’t have the number color readily available. We’ll let you know.
Unidentified Participant
And sir, another thing as a lot of participants have said about the valuation and everything. So with the LPG subsidy that we are, the what the government is paying us the seven and a half thousand crores approx. And the margins staying so stable now with the refining margins staying so strong. So is the company, is there a buyback in the plan? Like is that something that can be on the table?
Rajneesh Narang
So we’ll if, if and when there is anything like that we will let you know. Right now as I said, we were more focused on our projects and our performance there. As and when these plans, if there is any plan at any right time, we’ll let you know.
Unidentified Participant
Right? Right. Thank you. Thank you so much.
Operator
Thank you. Next question comes from the line of Achal Shah with Ambit Capital. Please go ahead
Achal Shah
Sir. Am I audible?
Sumeet Rohra
Yes
Achal Shah
Sir. Just wanted to know have you done. Any study with respect to how many outlets can India reach let’s say next 10 years or 20 years down the line? I understanding that around 1 lakh outlet are there. So what can be the broad number 10, 15 years down the line.
Rajneesh Narang
So as a company we have not done that study. As a company we are more focused on where can we put in our retail outlets and be more profitable around it as a nation. I think your question merits a discussion at a level where somebody thinks around this. But again the question is not only in terms of number of retail outlets. There are different models on retail outlets. There are countries where there are huge retail outlets with throughputs of 2000kl per month. But if you look at countries like Japan, etc.
They run huge number of small outlets. So different models exist for each one of us. Who’s putting retail outlets. The question is not the number of outlets but the question is how am I getting those outlets to be viable for me and for the partners who are putting up that thing. So that’s a lot of our focus is on those aspects right now. But to be frank, we have not done a nationwide study on this.
Achal Shah
My second question is on the Rajasthan refinery. So has there been any cost overrun from the last updated numbers and currently what is the total outlay? Is it near to around 80,000 crore?
Rajneesh Narang
Yes, roughly in that direction. We will not be able to give you an exact number right now because there are some government approvals which are being in the final stages. Once that comes out, we look at it. But there is no further increases from what has been discussed earlier. And you know, give and take, few hundred crores here and there don’t matter in that number. But broadly it will be in that kind of a range.
Achal Shah
Got it. Thank you.
Operator
Thank you. Next question comes from the line of Malik Patel with Equidus. Please go ahead.
Unidentified Participant
Yeah, hi. Thanks for the opportunity. Just two question one on that. You have so far done around 1 million ton of LNG sourcing from the ADNOC, right? One was in HH and one is in the latest. One is a brand link. Are these cargoes going to come only at Chara terminal or you have a provision to take it to the other terminals. Let’s say the hedge or Dabol.
Rajneesh Narang
Yeah, we have flexibility to do that. We have different parties. With some of the parties we have interoperability things. They can land cargoes at our place place and vice versa. But primarily our gas we are planning to bring at Chara. But there would be situations there. Like for example Chara is not available due to anything, storage capacity is not there or weather is bad. We can take cargoes to different terminals also those flexibility and
Unidentified Participant
The primary consumption will be your refineries and the CGD business, right?
Rajneesh Narang
No, we are also selling in the market
Unidentified Participant
And we will ramp up
Rajneesh Narang
That business increasingly.
Unidentified Participant
Got it. And second question is that on the sourcing side earlier you mentioned that as a part of Project Samriddy you have a couple of line items and one of that Was sourcing. Can you just highlight that how you have improved the sourcing in terms of various makes and second is on the hedging part and so that I think really helpful.
Sabri Hazarika
You’re talking of crude sourcing. Yeah,
Unidentified Participant
Crude sourcing.
Rajneesh Narang
I think on crude sourcing there are three or four things we have done. As you are all aware, any company like ours does term cargoes and spot cargoes. So based on our views on the future, we have been looking at how much to do on term and spot. On the spot. When you go to the market, what do you do? What do you buy? Is a very big question. And in every purchase you can, by getting it right, you can get a dollar lower, half a dollar lower, $2 lower, depending on what you buy. So we have done a lot of work on optimizing our models, et cetera, where the way we go to the market earlier we would go on a set pattern, buy one cargo.
We have experimented with things on trying four cargoes at one point of time, looking at opportunity crude. So we have brought in agility into our sourcing, we have brought in science into our sourcing increasing. We updated our models, we’ve gotten the latest versions of the models, including using some AI tools, etc. Which
Yash Nandwani
We
Rajneesh Narang
Are still in the progress of documenting. So there is a lot of effort which has been done there. But the line. Can you guys hear? Yeah, yeah,
Probal Sen
I am here.
Rajneesh Narang
I thought the line has got. The most important thing which we have done on the sourcing is actually getting the WIZAG project up and running because it allows us to buy very different kind of crudes and as a result take up the, you know, capture more value. I said earlier in the call, if we just do the maths between what crudes we are buying and what we would have bought in the last month if we had not had rough with us. There is a difference in what every single parcel we would have bought a more expensive.
So those are the things which we have done. There is more value to be captured out here by being smarter, agile. Now in terms of sourcing, that’s not the only thing we are sourcing because we also source LPG, a lot of LPG. We import 67 million tons of LPG if I remember correctly. And we also because HPCL.
Unidentified Participant
Hello. Ladies
Operator
And gentlemen, the management line has been disconnected. Please be on hold while you quickly get them reconnected. Ladies and gentlemen, the management line has been reconnected. Please go ahead.
Rajneesh Narang
I was saying sorry, our call seem to have a jinx that they get cut after some period
Unidentified Participant
You are discussing about this profile, LPG sourcing.
Rajneesh Narang
Yes. So you would have read about the deal which has been done for sourcing from us by all the three OMCs. We have together gone and done that. We have looked at propane, butane mixes on sourcing. So there is a lot of effort which has been done on each of these areas and that’s what is starting to show in our results in some ways. Having said that, there is a lot more which needs to be done and can be done going forward.
Unidentified Participant
Got it. Thank you very much and wish you good luck.
Rajneesh Narang
Thank you.
Operator
Thank you. Next question comes on the line of Amit Radhaka with Access Capital. Please go ahead.
Amit Murarka
Hi, good morning. Thanks for the opportunity. So my first question was on opex. So in this quarter it seems to have gone up. Almost like even if you adjust for FX gone up by almost 10%. QoQ wanted to understand the reasons for that increase.
K. Vinod
Did you mention OPEX going up,
Amit Murarka
Other expenses? I mean in the P and L.
K. Vinod
In fact in terms of expenses there has been a net reduction. If you recall the opening remarks of our chairman, the OPEX per tonne for the quarter three has come down by about 13% and on a nine month basis it has come down by about 9%. This is on a per metric ton basis. And as a percentage of turnover in Q3 of the last year it was 1.6% and that’s come down to 1.37% in FY26. If there are some specific numbers that you’re looking at that we can, we can engage with on the, on those numbers separately.
Rajneesh Narang
Yeah, maybe there are some specific heads you’re looking at. You can just drop us a note on it and we’ll clarify. I’ll
Amit Murarka
Do that. And also I read somewhere in your notes to account or presentation that you mentioned that the Mumbai refinery incident has been fully accounted for in the quarter. So while I understand that there’s an impact on grm, was there an impact on other items also let’s say and other expenses or anything like that.
Rajneesh Narang
There will be an impact in terms of there is a unit down, so there is a cost on R and M, there are costs. There are also impacts which when a unit goes down at suddenly and remember this happened around the Diwali period. So there is a cost which happens in extra transportation etc. So there are a lot of allied cost on it. As a management team, whatever we know best, we have captured it into the entire thing. But having said that, because this is a matter. Now there are some disputes obviously you can imagine in these things so it is hard to say oh this is the exact number but whatever best we know has been factored in into the entire thing.
Having said that, I would not say that’s the end of it. There might be some elements which come here and there but by and large I would say the quarter factors in our best estimate of the overall impact, not only crude etc. Etc. Factors in our best estimate.
Amit Murarka
Got it. And just a last question on deleveraging that seems to have been a key focus area for you and it seems to be going well. So next year like what kind of additional net reduction can you target and by when you think you will start thinking about their next leg of capex beyond the Rajasthan refinery?
Rajneesh Narang
Yeah, I think on the numbers for next year we will come back in the analyst call in the first quarter. Yeah so that’s something which we’ll kind of come back to you in terms of when would we look at the next wave of capital? I think we are already starting to develop what are the projects which we want to take in the near future. They will not be large and these are all of course we have projects on green side, we have CBG plants, etc. Etc. We will take those but on the refinery side there will be more of debottlenecking some small value addition projects etc.
We are not envisaging a large capex. So somewhere during the course of the next financial year we will develop our next year, next 5 year roadmap on CAPEX etc. By that time we would expect VIZAG to be fully stable. We would also expect BARME to be on the path of stability. That gives us a greater muscle to do that. We do not want to get to a complete underleverage situation because as a management team we believe certain leverage is very good in the business and that’s what many of us have learned in our school and colleges.
The debt is good, some amount of debt is good but we definitely want to come down on the overall leverage including. We don’t not only look at HPCL leverage alone, we also look look at the console leverage and get it. Once that gets more comfortable we will take the next wave of capex. We still are doing reasonable amount of capex but a lot of it is focused on marketing and some of the other areas right now.
Amit Murarka
Understood. And just a last question on lubes. In the last call I think you explained that you are looking to build a bigger consumer facing business for that Are you doing any specific steps to do that or what are the plans on that front?
Rajneesh Narang
So yes there is a. We have a multi year plan. It’s been done by one of the leading consultants and we are executing on that on ground. You will see if you are noticing some of the recent cricket you would see HBCL loops just Advertisement that’s the smallest small part of it that was more to just create a brand awareness but we are also doing things like racer station, neocar stations. These are places where we are starting to provide more services than just sending a bottle of lubes. We are introducing more of high grade lubes.
The synthetic lubes we have sourced we’ve done some agreements with a couple of international players on those. We are also looking at expanding our portfolio into allied products like greases etc. We have doubled down on our R and D around lubes so that we can tailor make lubricants for specific like mining equipment, require specific grades of lubes. So we are testing them in our labs and taking them to our mining clients. So a lot of groundwork effort happening on those and it’s starting to be a result in next couple of years we will see a much more stronger customer facing efficiency.
MCG brands induced from hpcl.
Amit Murarka
Thanks a lot and best wishes here.
Rajneesh Narang
Thank you.
Operator
Thank you. Next question comes from the line of Sabri Hasarika with MK Global. Please go ahead.
Sabri Hazarika
Yeah, good morning. So I have a few small questions. Firstly on the marketing front I think I mean there has been some decline in margins for Diesel QOQ but there has been growth in the volumes because of the seasonality. LPG also improved quarter on quarter in terms of reduced losses. So still I think if we do a back calculation the total marketing earnings seems to have fallen Q OQ So I don’t know whether it’s like rightly to ask it or not but was there anything exceptional on the marketing side or that contamination affecting marketing, anything of that sort?
Rajneesh Narang
Sabreet Two parts to that question. One I think we did have you know when Mumbai incident happened suddenly this was also a peak marketing season so we did have a market related impact on that. We were able to manage it but and prevent any dry outs et cetera. But obviously you have to do extra movement and the product we should have gone from Mumbai we had to get do coastal movements. A small effect of that clearly. Second, even right now if you see our portfolio we sell more than we refine and those of you track cracks would know that cracks were late 20s, early 30s touched diesel cracks late 30s also.
So for a company which is more skewed on marketing there would be a dampening effect of that. Definitely. But then cracks have come back to normal levels. Right now I would call them both as these are like more as business as usual. These things will keep happening up and down. So nothing majorly off Diesel cracks went to 30 on that fortnight. When we sourced the remaining product from others obviously we paid more for that with dampened slightly the marketing margins.
Sabri Hazarika
Got it. Thank you so much. And secondly on barmail you mentioned that, I mean in the presentation I think you’ve given 79,000 crore of revised project cost. So is there any anything further being like discussed with the government or this is the end of it.
Rajneesh Narang
I said that the only reason I didn’t give a specific number is because that’s under an approval process right now. But I also said when somebody said 80,000 I said broadly it’s in that range. That’s the final thought.
Sabri Hazarika
Should not escalate anything from here. No, that’s
Rajneesh Narang
Not our anticipation.
Sabri Hazarika
Right. And last one small question. So Venezuelan crude dynamics I think with Vizag bottom subgrade project, do you see it to be an additional opportunity beyond the $2.50 per barrel BRM increase?
K. Vinod
Venezuelan group apart from the bottom heavy are also having high viscosity and high acid number. So we will have some opportunities. We will evaluate as and when we can get offers and we will take it accordingly.
Rajneesh Narang
I think the good part is if Venezuela crude is coming out right now then having rough
K. Vinod
And
Rajneesh Narang
Also having Barmyr which has delayed Coker and all at least gives us an opportunity to evaluate and see. And as director refinery said that’s also not an easy crude to handle. It’s a tough one. But the fact that we have that asset gives us that opportunity.
Probal Sen
Got it. Thank you so much and all the best.
Operator
Thank you. Next question comes on the line of Sourabh Jain with hsbc. Please go ahead.
Unidentified Participant
Hi, thank you for the opportunity. Just taking a couple of clarifications over here. When you Talked about the LPG losses per slender as of now you gave us two numbers. That is 35 rupees per cylinder and then you expect it to go up 200 to 120. So what is the broad expectations in January you think it’s going to be 35. And this increased price would be applicable from February. That’s the first question.
K. Vinod
Around around 130 is what is expected in in January.
Unidentified Participant
Okay.
K. Vinod
Because the Saudi CP has since gone up.
Sabri Hazarika
Okay,
Unidentified Participant
Understood. So running rate is about 130.
K. Vinod
So. Okay, I’m sorry, I’ll just stand corrected. 95 in January and then 120 thereafter.
Unidentified Participant
95 in January and 120 there. Based on the current Saudi and on the inventory process, you mentioned marketing gains of 14 crores and refining 540 crores. Small loss or gain?
Unidentified Participant
Yes,
Unidentified Participant
That is. That is a loss, right?
Unidentified Participant
Yes. Okay,
Unidentified Participant
Thank you. The other question I had in mind, we appreciate that you looking to kind of focus more on the customer end of things and renovating all of these retail outlets. What is the end goal? What is the desired benefits that you specifically see? Because we are not in a business unlike the other B2C businesses where companies have a right to even charge higher prices from the customers for the experience they are providing. So that remains to be a limitation from HPCL point of view, in my understanding.
So would want to be knowing more insight on that side. What are the specific targets when you renovate or invest more on retail outlets?
Rajneesh Narang
So you go to a retail outlet yourself and you drive your car. If every retail outlet on the street is of the same caliber, then you have a choice and you might go on there. But if there are some which are better than others in terms of looks, etc. You will go there. So there is a big impact. Doing the renovation and modernization on the right retail outlets has an immediate impact on the volumes. That’s point number one. Second, we are looking at the business as it was done in the past where okay, people will come and only sell fill gas tanks and go away.
This business is also changing. There are places where we are starting to put in chargers. There are places where we are starting to put in non fuel retail. There are places where we are starting to do different things. So a lot has to be fought on the forecourt in this business in the next five years. Just keeping the pumps. The companies which don’t innovate first, you’ll have to even keep pace, you’ll have to do that. But whenever you do innovation, you know how smooth is your process. When you come to my retail outlet and if you can pay through hp, pay, it gives you flexibility.
Now I’ll use a bit of time for airtime for marketing. Those of you send your drivers to fill, sometimes you worry whether the driver is doing the right fill or not. If you’re using HPPay, you can actually directly keep the payment in your control and the bill comes directly to you from the machine. So those are kind of services if you provide, obviously we become a stronger consumer brand. So There is a. I think there is a lot to be fought out there.
Unidentified Participant
Understood. But do you have a clear cut roadmap as on how many retail outlets will be renovating every year, how that percentage is going to grow and any targeted market shares that you have in mind. And will it also be useful to kind of have schemes like loyalty, discount and stuff which can kind of help you retain your customers, make them more loyal to you?
Rajneesh Narang
Sure. We do have loyalty schemes. We are also working further. We do have a very Fantastic app, app HPPay. Those of you have not used it should use it and see benefit it gives. You can trust us that we have a roadmap on the entire thing. And the only thing I would say the roadmap and connecting it to market share, etc. I don’t want to get into those Excel sheet calculations. But wherever we do renovate every single retail outlet which is renovated, a specific IRR is collected, calculated for that and post renovation we look whether that IRA is met or not.
So there is obviously a lot of homework which is done. It’s not like a random exercise on it. There is an absolute roadmap on how many. And we are not going to do renovations for all 24,000 because 25,000 because that’s a huge number. But we pick and choose where we want to do.
Unidentified Participant
Okay, sure. Thank you. And all the best.
Operator
Thank you. Next question comes from the line of Mayank Maheshwari with Morgan Stanley. Please go ahead.
Mayank Maheshwari
Hi sir, thank you for the great introduction. Just two questions. First, on Vizag, in terms of the scale up of the rough unit, when do you think you can run to full utilization? And can you just give us an idea of what percentage of the HPCL group will basically be sourcing diesel after the RAF coming through and after the Rajasthan coming through in terms of as in coming from outside your ecosystem.
Rajneesh Narang
Okay, Mike, thank you. Thanks for the question. As I said in the introduction, we are targeting a performance guarantee test by the licensor in March. Performance guarantee test means that they have to show the unit running to us at all systems at 100% utilization for a period of three days or seven, three days. So basically we are targeting March where we will be able to run the asset fully on a continuous basis. That’s the performance guarantee test. So that’s the best outlook I can give at this point of time.
We would get there. I think we are, give or take a few days. It’s a complex asset. But I think we are in that direction because we are monitoring it On a daily basis. What is happening out there in terms of crude sourcing? Yes, we would have a lot of. Sorry, diesel sourcing. We would have a lot of diesel. I think if I am not mistaken, we will be able to meet our 100% of it
Unidentified Participant
With rough almost only leaving 14% rest would be either HPCL or HPCL group.
Rajneesh Narang
Yeah.
Unidentified Participant
And after HRL comes in, entire HR would be in
Rajneesh Narang
House of the
Unidentified Participant
HPCL group only except for MS, around 11% would be will be sourced outside.
Mayank Maheshwari
Got it. So once Rajasthan plus mrpl, your state plus HMEL plus HP all put together, you’ll be pretty much completely neutral on diesel in terms of refining. Plus refining how much you are refining, your marketing. Correct. Is that right? We’ll have product security.
Unidentified Participant
Yeah,
Rajneesh Narang
Yeah. Except in our case because some sits in joint ventures or some of the margins will be captured there. But yes, from a product side we’ll be completely diesel. We won’t need anybody’s.
Mayank Maheshwari
So is that fair to say that from a market share perspective, obviously you’ve lost a few basis points in market share on diesel this quarter and last quarter as well. When do you think that you can recover that fully back?
Rajneesh Narang
Yeah. So Mike, if you distill that market share loss now you would find because you look at diesel, but diesel is bulk diesel and retail diesel. So we actually have not lost share in the retail side and bulk diesel. If you were close to the market in the last quarter, you will realize that bulk diesel in India has been going at a discount. So actually shareholders or potential shareholders, you should be happy that we did not chase the volumes because we did not lose the value. It wouldn’t have made sense to buy a product from somewhere else and sell it at a discount.
So our retail market share on diesel has also not. It’s literally at, if I’m not mistaken, it is higher than at least other two state owned companies. All the state owned companies lost to Reliance the Govp in this period market share, that is even on the retail side because they did some very aggressive pricing on the retail side. But we did not run the bulk diesel race in the last quarter because of the discounts. Now if and when we have surplus diesel with us after commissioning and running of all the two products, at that stage we will have to take a choice of whether I sell it in the domestic market at the best price I can pitch, which is potentially discount to the retail prices or should I export that product.
So I will have to do that optimization on a regular basis. But we did not lose market share on the retail side in the last quarter, at least amongst the OMCs.
Mayank Maheshwari
No, that’s very clear. Thank you. The second question was more in terms of LNG sourcing. I think the two deals that you signed, how comfortable are you in terms of competitiveness of your LNG portfolio now versus what others are kind of signing in India because you are going to sell in external market as well. So where do you stack up your portfolio versus the rest?
Rajneesh Narang
So I think we have signed two deals right now. I would say we are in the infancy stage on that portfolio right now. I’m kind of fully covered with those deals because I can use that literally in my own refineries. But that’s not what we are doing. In fact, for one of our refineries we are currently buying from outside and selling LNG because we get more money on that. The latest deal which we have signed, I’m not going to go into the numbers but I have reasonable assurance that is one of the most competitive deals which has been signed in India, the Brent Link Lee deal, the slope is one of the most competitive in India and we’ve been very aggressive in getting the right deal.
We will learn and we’ll obviously sharpen it further. But very, very comfortable with the first one is a Henry Hub deal which is difficult to compare with the Brent because on some quarters you do better, some quarters you don’t do better there. We manage by trying to hedge at different quarters. But the second deal is one of the most competitive deals in India.
Mayank Maheshwari
Got it. And it is. Normally it’s going to be wet gas or it will be dry gas that’s coming in. Can you share that?
Rajneesh Narang
Mostly it is dry gas. I think if I don’t know the exact answer but
K. Vinod
It’s from the. Directly from the noses from their feedback. So yeah,
Rajneesh Narang
No, it’s a, it’s a dry gas only because if I’m not mistaken it’s only Qatar, the RAS gas which is the wet gas. But I, I would say this is a guess. I next time onwards I speak to you, I’ll give you an answer on this. Sure.
Mayank Maheshwari
Okay, thank you. Thank you.
Operator
Thank you. Next question comes from the line of Ramesh Sankaranarayanand, an individual investor. Please go ahead.
Unidentified Participant
Hello. Thank you very much. And on your results, so can you give us the profit after tax in HMEL just to get a sense in terms of how the petrochemical business has fared and secondly, if you were to look at your depreciation run rate, has it stabilized based on the capitalization or Is there some more assets to be capitalized for the full year? FY26 and some in FY27.
K. Vinod
HMEL as the chairman mentioned also in the course they had a turnaround in this quarter and for the three months of 2523 that is Q3 the PAT was it was a loss of 94 crores and for nine months it is a loss of 18 crores.
Unidentified Participant
And on the depreciation,
K. Vinod
HPCL depreciation.
Unidentified Participant
Yeah. What
Unidentified Participant
Is the question Ramesh? On the.
Unidentified Participant
Yeah. So based on a nine month. Yeah sorry, yeah,
Unidentified Participant
Yeah. Significantly most of the assets have got capitalized including the rough unit. So more or less except for the fact that in case of this quarter q3 quarter only 1 month depreciation would have come for rough rest. All is more or less stabilized.
Unidentified Participant
Okay so basically the rough depreciation will be fully annualized from next quarter onwards. So in terms of your CNG business on standalone basis when do you see that making a meaningful impact on your top line and bottom line?
Unidentified Participant
See we are gradually making the portfolio and in fact we are already making. We are EBITDA positive as regards all the CGDs are concerned. So the portfolio is increasing and maybe in a year or so you will start seeing the significant impact of the contribution from this segment.
Unidentified Participant
Okay so one last thought. On exp lng when do you think it will become EBITDA and PAT positive based on the current utilization future ramp up?
Unidentified Participant
You’re talking about the terminal side or the gas side?
Unidentified Participant
I’m talking about the overall HPC LNG business.
Unidentified Participant
HPCL LNG business. If you look at currently our our utilization levels are lower. Maybe in a year or so the the. The utilization level will increase and will become part of. We have already EBITDA positive as regard the terminal is concerned. But to be cash positive it may be a year or so.
Rajneesh Narang
And ravish the way we look at it is for Chara. While Chara is the terminal is housed in a separate entity. The gas business is obviously on the parent entity. Our first endeavor is to get you know can we leverage CHARA to make more money on the gas
Sabri Hazarika
Side. So on the combined sourcing of gas plus
Rajneesh Narang
Chadha can we get a bid up and cash positive very quickly? Our endeavor is to get there very very quickly. Maybe once there’s a breakwater to be completed there which is going to be completed hopefully in the next couple of months once it becomes a non weather port the utilization as Rajeshi mentioned will go up and hopefully we’ll get to break even on the terminal itself and a cash positive on combined business.
Unidentified Participant
Thank you very much and wish you all the best.
Rajneesh Narang
Thank you Ramesh.
Operator
Thank you. Ladies and gentlemen, due to time constraints we have reached the end of question and answer session. I would now like to hand the conference over to the management for closing comments.
Rajneesh Narang
Thank you Shiva and thank you all. If there are any residual questions, please send it to us. Our corporate finance team would be very happy to answer those questions. Thank you for your continued interest and continued probing because that keeps us honest and every time we take away one or two new questions from the call which we think about. Look forward to connecting with you again in three months from now. Meanwhile, if anybody has individual questions, wants to have an individual chat with the management team, we’ll be more than happy to have a discussion.
Operator
Thank you. On behalf of Antiq Stockbroking Ltd. That concludes this conference. Thank you for joining us. You may now disconnect your lines.
Rajneesh Narang
Thank you.