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) Q4 2026 Earnings Call dated May. 13, 2026
Corporate Participants:
Vikas Kausha — CHAIRMAN AND MANAGING DIRECTOR
Rajneesh Narayan — Director, Finance
Analysts:
Vardarajan Sivasankaran — Analyst
Unidentified Participant
Sabri Hasarika — Analyst
Presentation:
Operator
Ladies and gentlemen, good day and welcome to the Hindustan Petroleum Corporation Limited Q4FY26 earnings call hosted by Antique Stock Broken Limited. As a reminder, all participant lines will be in the listen only mode. And there will be an opportunity for you to ask questions after the presentation concludes. Should you need assistance during this conference call, please signal an operator by pressing star and 0 on your Touchstone 4. Please note, this conference has been recorded. I now hand the conference over to Mr.
Vartarajan Sivasankaran from Antique Stock Broking Limited. Thank you. And over to you sir.
Vardarajan Sivasankaran — Analyst
Thank you, Sopnali. A very good afternoon everyone. It’s my pleasure to welcome all the participants on this call and the top management of HPCL this afternoon. For the discussion on the fourth quarter results from HPCL we have Mr. Vikash Kaufal, Chairman Managing Director. Mr. Rajneesh Narayan, Director, Finance. Mr. S. Darikan, Director, Refineries and Mr. K. Vinod, Executive Director, Corporate Finance. I’ll hand over the floor to Mr. Vikas Kaushal for his comments.
Vikas Kausha — CHAIRMAN AND MANAGING DIRECTOR
Thank you. Madhurajan. Good afternoon everyone. Pleasure speaking to you on this call. As you all know, we declared our Q4 and results just a short while ago. And we thought this would be a right time to do a call early today itself. We wanted to beat you before to your writing the first reports and asking questions. We wanted to give you data so that you can write the informed reports before we start the conversation. I would say like in the past, all the detailed results investor presentations are both reported to the stock exchanges and also on our website.
So we are not going to make a formal presentation like in the past. But I’ll start off by talking for a few minutes about how we see the situation, about our numbers, highlighting a few points and then remaining time we will use for an open question answer session just to get started. We all know the turbulent times we live in. The geopolitical uncertainty is all around us going on for a fairly long time. The crude prices have gone high and more importantly they are very volatile sometimes shifting 8 to $10 in a day.
Product availability of crude raw material, LPG availability has been challenging with supply chain disruptions. And Forex we all know has had challenges in terms of rupee depreciation on top of it being in a business which supplies energy to the millions of homes and millions of vehicles. We get very impacted by fears and perception. So in some geography someday people think there is going to be shortage of fuel and then so many people turn up at the pumps, et cetera. So that’s been the life we have been living in the last 70 odd days.
Our focus as a management team has been in terms of few things. First, really ensuring that the supplies are met. Our teams have worked incredibly hard to make sure whether it’s LPG supplies, liquid fuels, all kind of supplies are met. The retail stations are working, the LPG is getting home, et cetera. That has taken a lot of effort, but we are very happy that we, along with other companies in the sector have maintained the supplies. Second question which keeps on coming and perceptions which keep on getting oh, crude is going to run out.
I can assure you that we as a Company and other ONCs also have fully secured the crude for a long period of time. And we are, we don’t see availability of a crude as an issue. Of course pricing, we all know has been a challenge there. Lpg. There’s been a very nice pivot in the country on LPG from a situation where we were very dependent on Persian Gulf on imports and those import sources dried out rather quickly. We’ve been able to increase domestic production, we have been able to increase alternate sourcing, etc.
And as we speak we have a very good forward coverage on the supply availabilities. I can assure you, those of you who are connected with LPG cylinders, your kitchens are not going to go dry. You will get your cylinders in time. Of course you will have to wait for the 21 day cycle which is the rule. Now. This has all required a lot of hard work and before I proceed further, it will be remiss on my part to not thank my teams in HPCL who have done incredible work over the last 70 days of this crisis.
It takes a lot of toll to supply those cylinder and keep those pumps working in these situations. Also I would call out a very good coordination between all the oil companies. We have not let each other down and anybody needs product. We have been helping each other and also there is a very active guidance and interactions with the Ministry of Petroleum and Natural Gas and other government stakeholders to ensure that there is continuous supplies of the product in the country. All people have worked very hard to solve this.
Of course we hope normalcy comes back very quickly and some of us get some well deserved rest and some chance to sleep with that. Prelude. Let me come to what you are waiting for in terms of our views on the results. I am excited to present after every quarter we have come and talked on this forum, talked to all of you and many of you have otherwise reached out and we have been very open in giving time and also very open in sharing our views and also listening into your feedback and suggestions.
You will recall by quarter three we had clocked 12,274 as standalone profit. This was up 206% from last year’s. So you knew we were on a good trajectory for the year. We carried that strong momentum into January and February also and locked in good numbers in both those months. In March the crisis hit. Obviously all kind of volatility happened but and we had to take a lot of mitigation measures both in terms of the physical aspects of the business but also the financial aspect of the business. All I can say is the HPCL was very swift to react balancing actions with financial prudence.
Now not all of those we will discuss in the call, but I would say every inch of effort was done and every ounce of energy was extracted to make sure we are balancing the supplies with also managing financial prudence. It’s not just for supplies. We are not letting go of all financial prudence there. We all know that our business has a lag effect. In March we pretty much consumed the Fed price crude. So this mitigated the impact for March. And this coupled with many other factors have helped us in salvaging a strong performance and decent performance in March.
That coupled with the January February momentum resulted in strong quarter quarter four numbers. Our revenue for quarter four is 1:23,000 crores if I remember it correctly 4.5%. But that was largely because of the price increase in the some of the segments industrial consumers and also some volume increases. The pack for the quarter is 4,901 crores. It’s up if I remember correctly, 46% or something of that number. I don’t remember it offhand but it’s a reasonably large number. So part which is exciting is when we look at the year as a whole.
Our pat for the year standalone is 17,175 crores. This is 233% of the PAT of last year, soft 133% and the previous best ever HPCL has recorded was 14,650 or something. So this is 17% higher than the previous best HPCM has ever recorded. The consolidated pack was 18,047 crores. Two of our refinery investments, HME and MRP are contributing strongly especially in the fourth quarter. We are excited about this performance. All through the year we have been talking to you very transparently about what we are doing and many things we are trying to do into our business.
I’ll talk on that in a minute but let me give what these numbers lead to. I think you would recall and many of you had questioned us on our debt equity for a period of time. We have been carrying high debt equity for a period of time. At the end of H1 of FY25 our debt equity was as high as 1.63. At the end of the the financial year it had dropped to about 1.38. But with this strong performance this year it has dropped to 0.8. This is well below the guidance we had given to UF at 1.1. And then towards the middle of the year we have revised the guidance to close to one.
So we have managed to successfully deleverage for the last year and I’ll give you the breakups on how we think about it what has driven this performance I once again say it is team HPCL which has delivered this performance and as a management team we are very proud of our team which has delivered this incredible performance. Going into some of the factors and of course market momentums contribute to it and the pricing regimes helped in the last quarter many of you were part of the 10 list meet we have done including the one where Anuran Mesha spoke about it.
So that has contributed. But there are six key factors in which the management drove which have also contributed to the strong results. First, our cost takeout program summary theme. We all know that we’ve been talking about that in every analyst call we had given a guidance of 1000 crore which we later revised to 1500 crores. The actual achievement for the year was 1691 of which 947 was one time and 744 if I get the map correctly are recurring. The recurring one have been baked in into our budgets for this year and one time ones are interesting because it shows a sign of hunger that we are spotting those opportunities and grabbing those opportunities to improve the financial performance.
The second key aspect was actually translating the savings into pnl. Sometimes we do these large programs show savings but it does not show in the numbers. In our case you can very well see in the numbers and I’ll just give you two data points. First if you look at OPEX as turnover in FY25 we were at 1.54%. In FY26 we have come down to 1.45%. It’s a 0.09% which on the base on which we operate is a phenomenal number to get In a year we might have got even better except for that march a lot of extra costs had to be incurred for last minute movements, et cetera.
If I just talk in terms of OPEX were empty. In FY25 the number was 1438 per metric ton and this has dropped to 1344. That’s the hard cash which has been conserved in the business. You can multiply it with the huge volume and that’s where the savings and the uptick on the numbers had come in. Third, we had a very tight control on the CapEx 3, 4 aspects. First, we obviously had rough and HRL impulse wings so that CapEx we were funneling all the CapEx which was required there but we had curtailed and phased out a lot of other capex.
And on the curtailment also we went very slow on the CapEx in the first two to three quarters of the year. It’s only towards the end of the year we allowed some of the what I would call as discretionary or less important capex. This allowed us to carry or lower our debt throughout the year and also be very prudent in where we spend the capex. Fourth, very tight management of borrowings. March 31st, 2025 we were 63,323 crores on total debt. This was on standalone, not consolidated. March 31st, 2026 we have dropped it down to $47,599.
That’s an incredible drop and there are two, three reasons behind that entire thing. Later on we can talk about the short term borrowings, long term borrowings which is there. But from my vantage point, very astute working capital management is one of the reasons behind it. If I remember my numbers correctly we probably shaved off around 8,500 crores from our working capital between the last year and to this year end. That obviously lowers the borrowings. And then as the prices went out our teams were very sharp in managing the situation including things like how much credit we had in the market, managing to get hold of that and significantly reducing the outstanding credit.
All the steps which are in management’s control were exercised. The fifth element was lower interest. Last year we carried an interest of 3,914 into our PNL. That dropped to 3,300 337 during the year, literally around 600 crores less. This is lower due to two counts. One, lower debt burden. As we started performing better we started started lowering the debt and second, we took actions in specific refinancing of debt lowering some of our. We managed to lower our forex exposure by maybe $253 hundred million dollars during that period.
All of that helped in tightening the numbers towards the end. Last but not the least very strong operational performance refining best ever. Both are refineries put together produced more than 26 million tons. Highest ever 3% growth over last year. And on marketing it was 51 point something of sales. You can see it in the investor presentation again a 3.3% growth. All I would say is during the year we focused on growth on profitable segments. We did not chase growth at all costs. So our growth numbers might be tad lower than what you would see for others, but that was a very conscious call of not chasing volumes but chasing valuable growth.
These steps are a culmination of a lot of hard work by the entire team and over the year I’ve seen the team push the boundaries on multiple dimensions. Once again I thank the team for all the effort there. I’m sure there are some updates you would want to know before we throw it open for the progress. Let me preempt some of the questions. You would surely have a question around rough. We had commissioned rough on 3rd of Jan. It is progressing in stabilization, but at a slower rate than what we would have anticipated.
We did have, I would say, a situation where there was a clogging of catalysts in the vessel so we had to take a shutdown, restart it, etc. We are learning how to handle that big beast. The unit is now, as I speak, back on stream and now it is ramping up fully. We are expecting full ramp up in the next month or two and it’s already giving smaller benefits to us. But I would expect more incremental benefits to start coming in towards end of this quarter or any part of next quarter. So from a financial perspective, it it is not iterative in the numbers.
Those of you run Excel sheets very passionately. You can take that block and say that is going to come over and above the numbers which we have delivered there. I would expect the numbers to kick in in quarter two on hrrl. You were aware that we were very close to commissioning or getting the project started with an event scheduled for dedication to the Nation on 21st April. Unfortunately there was a fire on frontier happens in these businesses. As we reported to the stock exchanges, there was a vacuum residue leak in the unit which caused a localized fire.
Thankfully it was brought under control very quickly and it was very localized. Just for context, it impacts six heat exchanger bays in the refinery and last time I was asking that there are at least 600 to 800 such heat exchangers in the refinery itself. So it’s a very small portion when you see on the map. But obviously it delayed the kickstart of the thing. The good thing is that it is getting back on feet. Other units are in the commissioning cycle. We actually have produced and sold LPG in the trial runs of cdu.
We have run at least one VLCC of crude already and produced intermediates and hopefully in this month we would start producing the diesel and Ms. And CUB will also be back on stream. So we are hoping towards that and aiming towards achieving a COD on the project shortly. Initially the refinery would operate at around 60% capacity. We are expecting that run in June itself. We have ordered crude etc. Accordingly and from quarter two we are expecting the refinery section to ramp up fully. And then slowly we will add Petchem anyway.
Petchem right now under control order, we have to produce LPG rather than propylene. Downstream on Chara, which was our third project we were able to complete or the port was able to complete 90, 95% of the breakwater. I think around 18 or 18 under 50 meters of breakwater has been completed. About 100 is left with this. We expect the permission to run the asset at full capacity for 11, 10 and a half to 11 months of the year, barring the peak monsoon season. For running a peak monsoon season, we need to do the remaining 100 meters which now can only happen early part of next year or early part of the post monsoon cycle.
But we are starting to bring in more cargoes. Of course right now everything is disrupted with the supply chain. Last update on the project side, 2G ethanol which has been going for some time. We have achieved mechanical completion by the 31st of March and we are hoping to start that project in the next two to three months. It’s technologically a big challenging project, so we don’t expect massive value from a financial perspective. But nevertheless it will be an important project to start. Just closing out on the forward looking views.
Quarter one, we expect it to be very tough. You all are aware of the situation. The crudes are very expensive, product prices are low and everything is quite volatile as of where we stand. There would be losses in the first quarter. Enough of that has been said in the public domain. I think just yesterday at the seminar, Hon. Minister of Petroleum and Natural Gas also talked about it. And earlier in the week, honorable Prime Minister also talked about the fact that oil companies have been under stress.
Given the current numbers. The numbers would depend on multiple factors and we are not going to give any guidance on this because it’s just too volatile to give a guidance. As a management team we are very focused on the controllable aspects, mitigating the impact where we can maintain the supply and also getting ourselves ready so that we bounce back very quickly and the business environment turns around. What gives us confidence is our balance sheet strength. We are the strong financial year. Improvement in the balance sheet gives us the headroom to fight the current situation.
Even as we manage that, we are still steadfast on our agenda for the next financial year. We’ve been talking to you on these things but I’ll very quickly, in a minute or two just talk about it and then open it up for questions. Samriddy 2.0 we had said that we will give guidance in the first analyst call. We have withheld that guidance because in this volatile environment we find very uncomfortable to pin down a number there. However, we are focused on this. The first wave of Sanridhi we had done in house.
For this wave we have selected consultants because we are now getting onto hard to achieve a section. But hopefully in the second this call we’ll be giving you guidance on what we are looking at. But I want to leave everybody with a message that we are going to continue on the cost journey and once the whole turmoil settles down we will get back onto the cost reduction curves again. Second on digital front we have making considerable progress driving towards efficiencies, capturing in the efficiencies and ease of work.
A lot of parallel initiatives are going on and you would see leapfrogging of SPCL on this front. I would encourage you to start visiting some of our refurbished retail outlets and you’ll see that slowly we are starting to make a difference on the refinery side. HRRL on getting on board, getting it stabilized is one of our topmost priority. And then getting Petchem rolled on and rough. We need to start getting in the benefits and we are confident that having gone through the learning curve we will get to the benefits soon.
The next area I want to talk about is trading or buying of products and selling of products. That has been an increased focus for us over the last few quarters. We have diversified our crude buying. We have brought in flexibility, we have brought in a lot of agility. Many of that 900 crore savings actually came in from some of these smart moves on trading. So we are gearing up and also gearing up a bit towards product trading because there will be times when we have surplus products retail. We are already on the part of strengthening our brand.
We had launched ABUDE last year. It did not give us as much of throughput increase but it gave us a lot of learning. Having learned from that, we have launched an abude 2.0 where we are now learning from what we could not achieve last year. We are aiming to achieve that this year. And in line with our capital cycle coming to an end, we are increasing our focus on renewables and gas and making sure both the investments we have made are paying for themselves and also thinking of the next wave of investments.
Also last point coming to close on this capital cycle we are starting to think of our next five year agenda. Just to conclude, over the last year we have started aggressively on our transformation journey. We have taken many initiatives. Some have succeeded, some have failed but we have learned in this we have demonstrated our capabilities to all hardness critics like you and the external world but more importantly to ourselves because the moment we know of our capabilities we can win further. Team HPCL has a hunger and desire to win and we will hope to continue this strong performance.
We are on a strong trajectory and confident on delivering to our shareholders even despite all the crisis with us. Thank you for your interest in us. Before I open it to questions, I also want to take this opportunity to thank my fellow director Rajneeshi. Many of you have heard his voice. As some of you might know, he’s superannuating after a long tenure in HBCL including many years at the helm of board of hpcl. Many of you who have followed HBCL for a long time remember his 40,000 crore EBITDA slide.
Well, I was joking with him earlier in the day that we have reached 34,381 as consolidated EBITDA which is a fitting tribute to his contribution to HPCL. With that let me thank everybody for their participation and we will throw it open for questions.
Questions and Answers:
Operator
Thank you very much. We will now begin with the question and answer session. Anyone who wishes to ask a question may press star and one on the touchtone telephone. If you wish to remove yourself from the question queue you may press star and 2. Participants you are requested to use answer while asking a question. Ladies and gentlemen, we will wait for a moment while the question queues ends. We have the first question from the line of trouble. Sen from ICC securities, please go ahead.
Vardarajan Sivasankaran
Thank you for the opportunity. Good afternoon sir. Congratulations for a very strong set of numbers. I hope I’m audible. Yeah. So just a couple of questions. Firstly on the supply situation you did mention that you know there’s no need to sort of you are fully secured For a comfortable period of time as of now, just wanted, if possible, can any granularity be shared in terms of which are the sources that we are sort of tapping at this point of time? And from HPCL’s perspective, any time period you want to attach to, you know for how long we are secure.
I’m assuming of course that the conflict continues to drag out through the first quarter as well. Then how are we placed and what are the geographies we are targeting for alternative supply?
Vikas Kausha
Okay, any other question or.
Vardarajan Sivasankaran
I have a couple more, sir. Yeah, yeah. So the other question was did inventory gains actually help the numbers this quarter? And if so, if it is possible to quantify. And the third question was, what was the LPG loss given the net negative buffer? Just wanted to understand the LPG loss that was there in this quarter. Those were my three. Thank you.
Vikas Kausha
Thanks, Rabal. As always, given the early bird price this time, we have to send you a nice hamper for that. But on the supply situation, see dial back to February of 2026 and there was no crisis. What would be the crude I would have secured? I would have secured crude for two months of running. That’s all I would have secured. Of course we would have had term agreements and we would buy spots there. So at no point of time, let me, barring a few days here and there when markets were there, but for most period of the time we have been having two months outlook for crude all the time.
So the normal situation which I have had on crude prevails. The challenge has been that in the past we were relying say half on them. I’m just seeing half as a figurative number not to be quoted exactly. But we were replying on half to term contracts and half on spot. Of late, given the challenge that a lot of term contracts were from Persian Gulf, we had to rely a lot more on spot cargo. So we have to do our spot purchases a lot more frequency. But at no point of time, except for the first three, four days of the crisis in first week of March, when there was the shock and awe of what was happening, were we not covered with roughly two months of inventory, which is normally what we carry, two months of secured supply.
And right now we are already in the market starting to lap up cargoes for July and we are getting enough cargoes, although cost is more expensive in terms of geographies. Well, this was not a time to be either optimizing the crude which you could run in your refinery. And that probably also impacted our GRM to some extent because in neither situation we would have run a particular mix of crude. But right now we were running crudes which were available rather than which were the most optimized for me.
So we have not bothered a lot on geographies which we are looking at. But if I just give you broad trends pre crisis. Give me one second, I have that number written somewhere. The crisis we were buying obviously a lot from Persian Gulf and of course from many other places also. But post the crisis situation, significant amount of Russian crude also came into the picture and in fact very early in the cycle we picked up a large chunk of all seances together picked up a large chunk of Russian crude oil.
So things like Iran has gone down very considerably. Jan, we ran a lot of on those ones. 20, 25% of my purchase was Iraq. It has gone down considerably because nothing’s coming out of Persian Gulf.
Unidentified Participant
On
Vikas Kausha
The contrary, Russian crude was available in the market on Siege that was procured and there was a lot of other crudes, even African crudes went up during this period. Some of we also got crude from us. Some of you would know that we even picked up a cargo or two from places like Venezuela. So that’s the broad shift in the numbers which you have had. I hope that answers your question on lpg. To be fair, it shifted from a lot of term contracts in Middle east to actually a lot of spot cargoes where at the time you were even buying sports cargoes on the sea in the market where you’re less worried about whether it is coming from geography or geography, but more on when it can reach my shores.
But that shift has definitely moved away from Persian Gulf to other locations now parts of that world is also existed and some of the gas from Persian Gulf is also coming out in different forms. On your second question on inventory gains, maybe I’ll ask Director Finance to give his opinion.
Rajneesh Narayan
Yes, it’s true that there were elements of inventory gain which are sitting in our booksoft account. But to be realistic, considering the fact that there have been so much of volatility plus the accounting adjustment because of the NRV reductions and all, we would not like to share the numbers once the stability is there as regards the pricing and it returns back to normal, I think that would be the right time for us to share the number so that you can accordingly put it in your model. Whatever numbers I would give otherwise would lead to some incorrect adjustments in your model.
So I’ll refrain from giving the inventory gains or losses numbers there. But coming to your LPG under recoveries, the full year under recovery was rupees around 5200 crore and for the quarter it was around 1350 crores but against this, not against this but we also got around 5 installments of the LPG compensation totaling to around 3300 crores during this period in this current financial year. Thank you. Got
Vardarajan Sivasankaran
It sir. Thank you very much sir. I’ll come back if I have more questions. Thanks for your time and all the best.
Operator
Thank you. We will take the next question from the line of from Philip Capital India. Please go ahead.
Rajneesh Narayan
Hi sir, good afternoon and thanks for the opportunity. So there have been a number of figures which are there in the market in terms of the kind of combined losses that all marketing companies are currently incurring abroad. Ballpark is pegged around thousand crores. I just wanted to understand what’s that number for us in terms of our daily and rate of a loss? That would be my first one.
Vikas Kausha
Yeah, thanks. I think that’s a question on mind of everyone but as I said in my opening remarks we are not going to give a forward looking guidance on this. I’m also fully aware on what kind of numbers we read the press every day. I think Andrew Van Vanessam on the podium at a CIA conference yesterday talked about directional number for all the OMCs there. Obviously he does not know the exact numbers which we have because being listed companies the numbers are with us only. But all I would say we are incurring losses right now and we are doing our best to manage the losses there and what could be the order of magnitude is known and I’m sure at the right time right decisions would be taken but we will not be giving a form forward looking guidance because being a listed company, being financially responsible it becomes very risky to give a guidance in a volatile environment right now like we have right now.
Rajneesh Narayan
Fair enough sir, I’ll take that. Secondly sir, my query was with regards to procurement and days of inventory so you said that like you know, you mentioned about code that we are covered for coming two months. So what’s the situation with respect to key products? How much of product inventory are you holding as of now in terms of days of holding for petroleum diesel and also for lpg if you can help us understand that. And secondly on procurement front when we are reaching out in the spot market so is that through traders and how does that procurement work?
I mean do we have basically a say in terms of which geography we are going to procure from or it’s just a tender put it out for a trader to fulfill irrespective of where it is getting fulfilled from.
Vikas Kausha
I think on first point on days of inventory. Let me keep it very simple for all of you. At a macro level, the supply chain on liquid fuels is roughly moving similar to what it was pre crisis. What, what do I mean with that pre crisis? I will always book. If I was sitting in middle of May I would be looking July cargoes. That is what I’m doing right now. I have my June fully covered. That is for Vizec we always have 45 to 50 days fully covered and for Mumbai we would have 30 to 35 days covered because that was a typical cycle.
All through this period, barring a day or two here and there we’ve had this fully covered and we are very comfortable on the crude supplies. We don’t see an issue on the crude supply at all. LPG there were challenges there but with the passage of time doing multiple things and also depth management at the country level on LPG by increasing production, managing or directing the supplies and also some amount of demand dampening, that situation has been managed and there is on a daily basis across all OMCs across the ministry we look at coverage.
Are we comfortable? We are very comfortable on the coverage we have for LPG available with us. There is going to be no shortage in May, there is going to be no shortage in June and as July comes in there is going to be no shortage in July also. We are. That’s anyway we always looked at 45 to 50 days there on the product availability in my supply chain that’s roughly similar to what it was I would carry sometimes if I remember correctly, 30 days roughly I would carry and depending on where I’m on pipeline or off pipeline, there’s not very.
But if I look at the quantum of inventory we are carrying, barring the operational variations which should happen some days, it could be a few higher or lower. We roughly have been carrying the same inventory from the product perspective. So nothing much has changed on that except prices
Rajneesh Narayan
And on the crude procurement front. So why I ask that question is that because there are a number of reports which have indicated that there’s almost a 11 million barrel per day shortfall of crude oil production globally. And I mean the procurement actually is a function of both time and the shortfall. So while a deeper shortfall in a short period of time is manageable, but as time progresses and if the shortfall continues, incremental procurement can get difficult. So just wanted to understand that when you’re procuring crude
Vardarajan Sivasankaran
From the spot market, how is it like, you know, how the value chain works and you reach out to a trader or you reach out to the market directly. How does it work? If you can explain that,
Vikas Kausha
I think I’ll again repeat what I’ve said twice in the call that we are fully covered as a company and as much as I know about the sector also we are covered on it. In our earlier analyst calls we have been saying that we buy crude from 41 different countries and that count might even this is only hpcl. Other companies might buy from a market or as a nation we buy that any year. We run multiple in our refineries. We can run anywhere close to 180 to 190 type of crudes. And it’s not that crude has disappeared from the market.
Enough of that is available. So there are multiple processes for buying crudes. There are firm agreements which we have, we’ve been doing as a firm also even in this current situation there are some term agreements on which crudes are coming. If I had a term agreement with any African country that is not impacted by this thing, by the term agreement with the South American company that is not impacted in the current prices that crude is coming. Then there are spot cargoes. All kinds of spot cargoes come in.
As you said, we buy through a tender. There are some. When you go to market there are different ways of inviting things. So as and when we have a need and roughly once a week we go into the market. Those of you are close to the trade can look at Kepler data and all those kind of things and don’t behave every transaction. Sometimes you do a transaction and next day it is reported in the breast what price we bought it. A lot of people have nice ways of getting it. But if you track Kepler and all you can figure out when do we go to buy?
When does IOCL go? When does dpcl? When does Reliance go to buy? All of us have been going very regularly. All I would say is the incidences on spot has increased right now because like we have some term contracts in Pershing Gulf which are not able to supply consistently right now. Hence we have to buy a lot more from spot. But that’s not a part of my business I get really worried about. Of course we are very. We keep an eagle’s eye vigil on it because any movement up and down even try to time out should I go today?
Is something going to happen tomorrow? All those things we try to do to mitigate the impact. But I don’t worry on the supply side of it. As I said, employees have said three Times are now said on the call. We are fully secured on the crude supply. We are very comfortable on the LPG supply.
Vardarajan Sivasankaran
Sure. So thanks so much for taking my questions. I will get back in the queue for further questions. Thanks.
Operator
Thank you. We will take the next question from the line of Sarthakita from DSP am. Please go ahead.
Vardarajan Sivasankaran
Hi, good afternoon. Am I audible? Yeah. Yes. Yeah. Congratulations to the team for the good set of numbers. I just had a couple of questions both revolving around capex. So sir, you highlighted on the opening remarks that CAPEX you have curtailed bit in this year and if I see the presentation we have maintained the number of around 77,000 crores for the five year period from FYI 24 to FY28. So. And in FY26 I believe we have disclosed that we have spent 15,700 crores. So all these numbers set aside and the current volatile, volatile market in Q1 also you mentioned the weakness.
How do we see the CAPEX going forward? Is there will there be a significant downward revision? Because I think that will be warranted. So how should we think about that?
Vikas Kausha
Yes, I think all good managements will respond to the stimuli which come from an external environment. When I said we curtailed CAPEX last year, maybe it did not show much in the numbers but you won’t know what our internal plans were. Maybe they were higher, they were brought it down to a level and overall numbers also do not show at what points of the time in the year I spent because that also has an impact. And third, we should not forget that we were already committed to a large CAPEX stream which is going now forward looking.
If I look at where I am today, obviously I am spending on HRRL whatever needs to be spent to finish that because I have to commission that project. So whatever capex has to go in there is going there irrespective of what is else is happening there. But wherever I have discretion on starting a new project, I’m taking the pause and saying okay, let’s come back to this decision after eight weeks or 12 weeks. Lot of our Capex, as you can know from a breakup is things like modernization of our retail outlets.
Sometimes we have a pipeline to lay, sometimes we have a depot to renovate. Sometimes we have to do a renovation in an emergency because there’s a safety thing. So if there is a safety emergency we are going ahead with that capex. But if there is a discretionary thing that okay, we have a choice to start that renovation three months later we will postpone that decision. So those are judicious calls the management team is taking as of now, I think I don’t remember the number offhand but our projected capex for this year is slightly lower than last year.
But that does not mean that we are wedged to that number. If war ends tomorrow and we get into a boom cycle, we might do more than that. But if the war continues for three more quarters you obviously will do less than that. That’s the response strategy I would have on this. Having said that, every committed capex and anything which is run towards completing our past capex is being incurred as we speak.
Vardarajan Sivasankaran
Understood, sir. Fair enough. This was a very elaborate answer. Thank you. Secondly, one small question you mentioned about the incident at Barmer and very few number of units that were impacted. Any extra capex that we had to incur due to this or that will be very small figure.
Vikas Kausha
I just said six heat exchangers in a refinery which has six to 800 heat exchangers and thousands of other things was impacted. There was a small amount for refurbishment and there will be some amount of I think insurance claims and all those kind of things around it. So it’s. Even if there’s this minor thing extra, it will be a rounding off error in that entire thing. So it’s a very localized thing. It’s just that when the physicality of that happens you have to take some. There is some kind of downtime which should be there and unfortunately for us it happened on a day when.
One day prior to the inauguration of the plant which was unfortunate but we have to live with that. We will be bouncing back very soon on that. I said earlier and we have given it in guidance to stock markets and the stock exchanges that we hold the guidance which the stock exchanges and if there is any further update on this we will duly inform the stock exchanges. As of now, I would say we have visibility of coming out with, if I remember the exact words you said in the second fortnight of May we will start producing some products from the refinery.
Sabri Hasarika
Okay, got it. This was helpful. Sir. This is from my side. Thank you.
Operator
Thank you. We will take the next question from the line of Mayank Maheshwari for Morgan Stanley. Please go ahead.
Vardarajan Sivasankaran
Thank you for the call, sir. Despite the tough times. Can you just talk a bit about in terms of crude sourcing what you are seeing in the market. You can be generalist, you don’t have to be very specific. But can you just give us an idea around when you’re going in the market today to source crude, what kind of premiums, insurance, how they are moved over the last few months. And how are you kind of thinking about that now managing it as you’re sourcing for July?
Vikas Kausha
Yeah Mike, I think that’s a good question. At the highest level I would say in every element there is a volatility in it, whether it is price, whether it is even insurance premium. This would be an example of insurance. Obviously insurance premiums have gone up, that’s a known fact. Earlier we would have taken a long insurance policy. Now sometimes you have to go cargo by cargo on some specific insurance policies. So that obviously increases the times involved. Then there is some movement related aspect.
Especially anything coming close from Middle east you have to be doubly sure on movement. You have to keep track of movements. Of course things coming from other sides are actually moving quite. When we go to spot, are we seeing lesser number of cargoes? I don’t think we are seeing lesser number of cargoes. Obviously there are certain grades which are not available because they are curtailed or they are very little available. But if in a particular inquiry 40 people would have participated earlier actually roughly around same number of people are participating in terms of we definitely see a lot more variation.
In the past the quotes would have been say if the delta was X earlier between the highest and the lowest. Sometimes these times there are 3x deltas. What also happens in this is there are times when you can actually be very opportune on this. It happened with us last two, three weeks ago. We sourced a particular cargo. Just as we finished internal approval on that cargo, an event happened outside where we immediately thought prices will fall down. Our team reacted immediately. This was after we had given the formal approval and approved and with the same parties they could negotiate a discount, a significant discount, a good single digit dollars in terms of discount and that’s obviously need saving.
So the need for agility in cargo buying has definitely gone up. Even as a state owned enterprise, I can’t always say that oh I will step back into my process, I will give you a tender, you give me a response after 24 hours. We’ve had to change processes where our decision making body is sitting right while our trading team just behind the trading team and giving them a decision on the spot. So that’s the kind of reaction and agility which is needed. I think in moments like this. Agility also gives you opportunities and wherever possible we have tried seizing those opportunities.
I don’t know whether I answered your question, but that’s how I see the market. If there are more specific details we’ll be happy to put you in touch with our trading desk for further questions.
Vardarajan Sivasankaran
Sure, sir. So the second question is more related to, and this is what you talked about I think, which is the digital ascent thing that you put it on your slide pad. I think you have been, I think a year and a half, two years back you guys talked about on AI and now you’re talking about generative AI in your processes. Can you talk us through of how you’re kind of getting it through? What is the story that you’re kind of pushing and what has been the impact in terms of cost savings if at all you are even thinking about these things into
Vikas Kausha
The
Vardarajan Sivasankaran
Cost saving focus that you guys have.
Vikas Kausha
Thanks. Let me just. I’m trying to figure out which specific slide my team has sent. It was 41,
Vardarajan Sivasankaran
Slide
Vikas Kausha
Number 41. Okay, okay. On the right hand side actually next time we will give you an updated version of this. My apologies, we should have had the latest version on this. In some ways parikalp was the program which HPCL ran for a long period of time and obviously we did some amount of movement on digital front in the last six to nine months. While we have not changed the name of the program, actually we have not even given it a new name. We have reenergized our digital effort. So what did we do?
There were a lot of different initiatives which had been done some good, some not so good. We had done a big SAP change rollover from legacy system into SAP. So a lot of things have been done but we got one of the best consultants to work on a North Star for us and give a very deep assessment on where we are. This happened in the last, I think third quarter of the year or fourth quarter, somewhere around November, December. They have looked at all our business and given us a frank as is assessment and a roadmap ahead parallel.
We have formed a large digital transformation team which reports to Director Finance and me basically SIB centrally. It has now been augmented to 35. We have hand picked people from across the place who are now tasked in a three year time frame to move forward on the digital initiatives so that there is a central coordination of all the digital initiatives. What are the themes? We are doing three or four themes. We are doing one. Bringing in digitization automation in many parts of our business.
Like I’ll just give you an example, many of you would know that about 85% of our retail outlets are connected real time with our central servers. We have a system where we can actually see how much petrol or diesel is in fill from which nozzle, in which of my retail outlets. I can see that sitting in my office actually, if I want, if I have that much of time. However, there were two things we were doing. We are not leveraging the data enough. And second, we were stuck at 85. Just to give you a theme, one thing we have said in two months, let’s get it down to all the legally operating.
By legally I mean to say there are some places where you have disputes with the pumps. But anything which is kosher in our system, we are connecting it immediately. Second, we have found in a team which is looking at data there. Now you can imagine in this current pricing regime there is proliferation of diesel from retail outlets to industrial customers. We are catching those guys using data. Every evening reports are published, mails go out. Sometimes dealers ask for show causes, sometimes they are suspended if we find they are doing transaction which is larger than what the retail outlet, my system can configure.
Oh, if it is greater than so much literature is filled in. There is a challenge in that. That’s an example which we are doing. So saturation, completing the setup is one thing. Second, there are parts of our system which are not connected by it. Like our supply chains are not fully connected by it. Some terminals, et cetera. I can’t read what is the capacity on all my tanks directly. I can read it at the terminal. But there. So those kind of interconnectivities we are doing. Third, we are using technology to drive inefficiencies.
And I’ll give you an example from our refining setup where in many of the units in last 12 months we have done the RTOs and APCs as they are called. Real time optimizers, those kind of stuff. And in some cases we are getting half a percent yield extra. Last year we had done pilots in both Mumbai and Vizag refinery. This year we have decided that every single unit where we want to put RTO we will put it in this financial year. We will saturate it this year. And hrl, once it gets steam will also get onto that.
That’s the third theme which we are bringing in. Fourth, obviously in line with the. Where do we use AI, Generative AI. Again, a real example I will give you. We have a vehicle tracking system where 30,000 of our trucks which go on the road are tracked every day. Now it is not they give us if it stops at any place. If it goes off route, it should give an alarm. We were getting 80,000 alarms a day. Obviously nobody is doing Anything with the alarms. But using AI systems now we have managed to get it down to few hundred real alarms a day.
Custom AI tool which we have put in. So that’s just as an example. We are doing procurement, we are trying to use AI so you can say agentic AI, use cases, etc. And we are also leveraging the power of our people. We are running as we speak organization wide hackathon where our youngsters are participating in some of these things and creating those. So it’s a holistic program. So next analyst call, we’ll give you an update on the parikalp. We might even give you a new name for that. But it’s a lot of effort.
Part of it is catching up, part of it is leapfrogging.
Rajneesh Narayan
That’s very clear. Thank you.
Operator
Thank you. We will take the next question from the line of Sumit Rora from SmartZone Capital Private Limited. Please go ahead.
Vardarajan Sivasankaran
Yeah. Hi sir, A very good afternoon to you and team xvcl sir. Firstly I would like to congratulate you and your entire team for absolutely stunning performance in an extremely tough environment. So great show sir. And I would also like to talk a few good words about Our Director Finance Mr. Narang. I mean it’s been a real honor and a pleasure interacting with him over a decade. So sir, thank you very much. It has been a real honor for all investors and analysts to always speak to you at conferences and on analyst calls.
Thank you and wish you all the very best and for a great future. Sir, after your animate. Now sir, coming to this few questions which I have from my side. So you know, firstly you know the this government has known to be a very proactive government as you know, for the conference we had in last September as well where our honorable oil minister spoke very clearly talking about bold initiatives. So sir, do you think that probably the time has come wherein there could be a possibility that we could go back to something like what we were in the past, like a daily kind of a pricing mechanism or something of that sort?
Secondly, there is absolutely been so much of noise in the media about this thousand crores figure. But sir, is my understanding correct that a substantial part of this thousand crore would be the LPG part which is actually the running account of the government and not necessarily borne by the OMCs. So is my understanding correct on that as well that you know the LPG losses are the ones which are contributing substantially towards the thousand crore figure, if at all. So it is which is quoted in the media.
My third question sir is on the Baumer refinery. You know now the fact, my matter of fact is that you know we are ramping it up so our dependence to buy products, products from third party would start coming off very sharply. So can you just throw some bit of highlight on that? And sir, just one last point. As our Honorable Oil Minister even yesterday spoke about that he interacts one and a half hour daily with all the CMDs of all the oil companies. So what is the general thought process? Because even today the RBI governor has spoken about fuel price hikes happening.
So what is it that the government is actually contemplating in terms of pricing? Because you know they are a very reformist government. So I’m fairly confident that they will take the correct measures. But you know if you can just share some thought on that, it will be, it will be very good sir. Thank you so much.
Vikas Kausha
Thanks Amit. That’s a lot of questions. I’ll have to check my memory to remember all but if I forget you can remind me. I think let me start the last point which is there. See obviously as honorable minister said on the stage yesterday, there has been a very active coordination across ONCs, across all the sector companies with the government and this does include a daily meeting at least six days a week if not seven days to look at things. We obviously discuss all the situations, what problems we are having, what issues.
Now what the discussion forward looking is I’m not going to discuss in this forum. Not fair for me to do that. But all I would say is again I’ll draw from what is in the public domain. The honorable prime minister said that the companies are facing the challenge of it. I think RBI governor also he was speaking at a conference today, he was on television about a couple of hours ago, spoke about it. The Hon. Minister spoke about it. I think there is a recognition and to be fair oncs have withstood the shock to the economy at this point of time.
Now whether the shock is yes, there is some on account of LPG losses also because LPG was very scarce commodity and prices were very high. To be fair there are losses on liquid products also because crude which you are buying at 60s in terms of dollars 60, 65, three months ago or four months ago is easily touching 100 at times 110, 120. So crude has gone up by 70, 75% on what we were buying earlier of 30, $40 in absolute terms. So it has obviously impacted the product prices, the realization product prices also which at times depending on source, refinery efficiency and other things can be significantly negative itself.
I think everybody understands the issues and I’m sure right decisions at the right time would be taken balancing all those factors. What those decisions are not fair. For me to comment on this, the only thing I would say is I think you were part of that group when we had that analyst meet in Mumbai a few months ago and both the then Secretary, Mr. Jain and the Honorable Minister actually both from the stage had talked about the fact that they understand the dynamics and they have encouraged everybody to look at the sector as a long term sector, not as a short term spike.
So just in the last three quarters there were enough people who were saying, oh, oil companies are earning more than what they should be earning and this quarter they are earning less than what they should be earning. But hopefully life from a longer term perspective, life would balance out on those. On the more operational question on bar mare product and all. Yes, once all those things stabilize, depending on how fast diesel grow, we do expect HPCL’s dependence on outside products to reduce. It won’t come to zero.
But there are obviously exchanges we do with other oil companies and there are some packets there because of the configuration we will need. But there will be times when at least for the next few years we’ll be potentially surplus with diesel. And we are working on plans on how to. Of course if the economy grows faster and diesel grows faster, we’ll be able to absorb it in India. If not, we will have some amount of product which we can export outside the country. And we are trying to figure out what’s the best way of it.
Some studies have been done, some outreaches have been done, but that we had moved further down on that. But after the crisis we have paused that because right now every country is looking at significant securing the product for itself. Once the situation eases and the world is back to the normal, we will again think of what’s the best way of utilizing our surplus product. But we are fully conscious of the fact that we would literally become dependent. I would say we will still take product from two of our joint ventures or three of our joint ventures.
But as an ecosystem HVCL would be reasonably self sufficient on most products.
Vardarajan Sivasankaran
Okay sir, thank you so much and wish you all the best. Thanks a lot.
Vikas Kausha
Thank you.
Operator
Thank you. We will take the next question from the line of Vidya Dar Gandhi from Soham Asset Managers Private Limited. Please go ahead.
Vardarajan Sivasankaran
The big losses on diesel and some petrol have started and the private players sort of tried to increase prices and price ventures out or their market share roughly remains what it was before this Event happened.
Vikas Kausha
Sorry, the line got distorted in between. Could you repeat the question please?
Vardarajan Sivasankaran
Yeah. So my question was that have. Has the market share of private players gone down in petrol diesel? Have they priced themselves out of the market or they continue to sell at these high losses and their market share is roughly what it was in January.
Vikas Kausha
I think you all are very smart analysts. You can just take a drive down the highways and figure out and you’ll get the answer to your question. All I would say in this is in this moment of crisis, there were three oil companies who were standing with the Indian consumers. They were the three onc, they stood by the Indian consumers, they faced the brunt. We got a lot of negative press for queues in front of our retail outlets. Well, the queues are only happening at the retail outlets which are supplying.
No queue was going to be ever reported at a retail outlet which was not supplying now. So if I have a wish right now, if I had more money I would have done a tagline which says that we stood by the customers. That’s all I would say on this. You, whether it’s your own judges, you take a drive around and you can figure out where the market shares have gone.
Vardarajan Sivasankaran
My second question is that you probably are having big losses on diesel and also significant losses on petrol marketing, but you are at the same time making higher cracks on especially on diesel. And to the extent what you outsource, you probably are making much smaller losses. So the number which the minister has quoted, is it, if you could give us some color, is it closer to the net number of the extent to which the losses are marketing exceed the losses which you make on refining? Or is it the gross marketing loss number?
Vikas Kausha
Yeah, twice or thrice said in the call. We will not be giving any forward looking guidances.
Vardarajan Sivasankaran
I
Vikas Kausha
Think there is a number which was put in public domain. It’s fair. That was maybe a directional number given by the honorable minister. I lead a listed company Moment. I give a guidance on an analyst call which is recorded in that I have to be sure of the numbers given the volatile situation. In two or three instances we have said that we are uncomfortable giving a number and we will not give that number because it’s unfair at this point. What if prices change tomorrow? The things will go all over the place.
I know you guys are anxious on that number but as a responsible listed company I will not get that number.
Vardarajan Sivasankaran
Lastly, just I hope that in the current year, if unfortunately the world drags on for a longer time, we won’t have a repeat of FY23 when you are allowed to lose money in the red. So I hope that it is ensured that to the authorities that matter it is conveyed that it is not fair to allow a company which is doing its national duty to go into the raid.
Vikas Kausha
I think there are enough instances of the government thinking on this in public domain. As far as I recall just in at the time Hon. Prime Minister was addressing the parliament in response response to the President’s speech at the inception of every year which is given in Parliament. He actually mentioned the fact that there’s a lot of pride that many of the state owned companies which used to languish earlier are performing very well and doing their duties similarly for those who were at the analyst meet both the then Secretary Mr.
Panka Jain and the Hon. Minister from the Diet last year at last had clarified this point very clearly and encouraged all of us to look at the long term. When you are dealing with these companies rather than looking at the short term. Just give me one second. So this is something which I think that should be enough for us to give the cue that nobody’s going to be left tiny, high and dry. All what we can say is from our side we are definitely doing what is required to manage the situation and we are doing it with a lot of custom right now.
A lot of skill.
Sabri Hasarika
Thanks a lot sir.
Operator
Thank you. We will take the next question from the line of Yogesh Patil from Dollar Capital. Please go ahead.
Vardarajan Sivasankaran
Thanks for an opportunity sir. Come number side again but I hope you will be able to share it. Not on the pricing side. What is the proportion of petrol, diesel and the ATF HPCL purchase from the other refiners to market at the HPCL pump? If you could share these numbers in the million metric ton that would be helpful.
Vikas Kausha
I think what I would suggest is on this one you can reach out to our corporate finance team. They can share the detailed numbers. You can drop them a query. They will give you the shared numbers. I’m conscious of everybody’s time on this. We do take product from others and I think that’s a fairly declared number. And what we have taken in the last quarter or we are taking right now is roughly in the same ratios which we were doing earlier. We can give you the exact numbers. Please take it offline with our corporate finance team.
Vardarajan Sivasankaran
Okay, second question again. The pre war level. We used to take the Saudi benchmark for the LPG prices. Now in this current scenario, a quite fluid scenario, what would be the ideal benchmark for the calculations for the LPG Prices and also wanted to understand a key challenges in sourcing a LPG from United States. If you could little bit throw some lights on this.
Vikas Kausha
The benchmark, obviously Saudi CP is used as the benchmark. That itself has gone very high. But not only benchmark, the premium of the benchmarks have also gone very wired in the recent past. I think there is one benchmark which is used in the government. I’m sure the government takes care of its benchmark. For what you guys do. I think you’ll have to fend for yourself in terms of what benchmarks do you want to use. Only thing I would say is from the benchmarks. It is a very volatile situation as compared to what it was earlier.
Both in terms of benchmarks being high and the premiums on top of the benchmark. That was the first thing. What was the second question?
Rajneesh Narayan
Sat execution. What elements go into a sig?
Vikas Kausha
That was the U.S. No, I got it, I remembered it. So us sourcing, I think oil marketing companies had actually taken an initiative to source LPG from us. We had already done a contract for multiple cargoes which actually incidentally started from January. So every year, every month, all the three overseas are getting four cargoes between them and there are some optional cargoes. So that is flowing all this while to source short term. I think the biggest challenge is two challenges exist. One, there isn’t too much of surplus LPG capacity anywhere in the world.
That is one second practically for us, the distances are too long. It takes about 80 days for a ship to turn around from here to there. The same thing for Middle east was 14 days. So if I need 10 ships for Middle East, I would need 40 ships for there. So all those things are practical difficulties on it. Having said that, our sourcing from US and LPG in this period has also gone up. Lot more has started coming in May and now will come in June than in March itself. Because immediately obviously even if you had actioned it, it would have come immediately.
Vardarajan Sivasankaran
And the last one, if you could just give us a perspective compared to Arab, Gulf or Middle east. The actual landed cost of LPG from Middle east to India and US to India, which one be better? Just for our understanding,
Vikas Kausha
It is absolutely impossible to calculate this at this point of time because you get situations, all kinds of situation in the market from premiums to super premiums to okay, somebody absorbing cargo freight prices, somebody not absorbing. So right now if I have to do a comparison, I do. I live on the comparison, not on a systemic basis. I live on the comparison on what’s happening on the time of the day and the daily basis comparison, because it’s in a normal situation, I would have given you those numbers.
And typically in the long run US LPG was marginally higher than what long run was marginally higher than what long term average on CPP into India would have been. But right now it is impossible to. There are cargoes which we suddenly find, oh, this is way cheaper than CPP coming in here. See, remember the last 70 days has been one where the availability of the product has been very scarce. A lot of effort has been to just secure the pipeline score, secure the ships, etc. Pricing is the later factor right now.
So it’s a very abnormal price to even do normal time to do the pricing comparisons.
Vardarajan Sivasankaran
Thanks a lot sir and wish you all the best.
Vikas Kausha
Thank you.
Operator
Thank you. The next question from the line of Amit Murarka from Access Capital. Please go ahead.
Rajneesh Narayan
Yeah, hi, good afternoon and thanks for the opportunity. On the refining side, I just wanted to understand like, given that there is too much volatility around the spreads which we see on the screen, but also on the crude sourcing, as you said, like a lot more spot cargo has been taken plus change in the slate itself. So just wanted to get a sense of like how should we look at refining margins? Like is it still fair to say that the margins that you’re earning with all these constraints around more LPG production and all that is, is much better than the pre war situation?
If you could just help us understand that part.
Vikas Kausha
Yeah, I think for an integrated company, I’ve always held a view though analyst, you always ask for Jerem, that refinery margins frankly don’t matter for me as an integrated company. For what matters for me is the crude and the selling price. But having said that, since the question is specifically on refining margin, I would say at the broadest level you can assume that if it was the perfect environment in the same situation, refineries could have produced better, they would have been optimized better because none of the refineries we know had the perfect slates for the products which they wanted to generate.
Not only our refineries, you know, for everybody else also because in the end people were running what they had available rather than what is most perfect for the slate which you are looking. So when you are running the less optimized one, you’re obviously leaving some margins on the table. So from that perspective you can expect refineries to perform strongly on that. On LPG conversion into this, actually very few refineries have been affected From a value perspective. So only if you are integrated, then you are more affected.
If you are otherwise the maximum you could anyway do is there is a limit to how much you can swing towards LPG and that is well within the operational parameters. So I think we are too complex to. Just because that depends refinery to refinery. But broadly I would say refineries could have done better in the same environment with all the pricing etc. If they had the operationally the best crudes available to that extent. From my vantage point, there’s a bit of understatement in refinery performance in the recent numbers.
Rajneesh Narayan
Sure, understood. But when you, if you could just add a bit more on that, like when you, let’s say buy your products from a refinery, any other refinery in the country, there is also that export rebate which is in place. So is it getting adjusted in the procurement
Vardarajan Sivasankaran
Or. That’s out of time, but.
Rajneesh Narayan
Yeah, to the certain extent it is getting adjusted in the procurement price.
Vardarajan Sivasankaran
Sure, sure. Thank you very much.
Operator
Thank you. We will take the next question from the line of Kirtan Mehta from Baroda BNP Paribas Mutual Fund. Please go ahead.
Vardarajan Sivasankaran
Thank you sir for the opportunity. Couple of questions from my side. One on the supply of crude. So for the ma, you mentioned that we have started sort of procuring crude for July and for July with the return of European refinery from maintenance and globally market short of the crude which has been lost. Do you see more challenges for procurement of crude during July as compared to May or June? That was the first question. Second question was are we also sort of seeing a lower diesel yield than which would have been otherwise because of the unavailability of the medium heavy grade crude which have a higher diesel yield.
So is that also sort of making us impact our crude slate at this point of time and would that delay basically the benefit that we see out of the RDUF unit?
Vikas Kausha
I think good questions on the availability from Europe. I don’t see any challenge on that because we are in the market and if I’m not mistaken, we have secured half of July already. As I said earlier, we typically buy on a 60 day cycle. So I think till about 15July we have covered ourselves the normal procedure and we have not had any difficulty in getting the crude which we want. Of course I would wish they were coming to me $50 cheaper than what they are coming. That’s a different aspect on your question on RAUc Etc.
Definitely if I don’t get the right crude which goes in for that, I cannot run that complex unit on the most optimum thing. So it impacts I will not shy away from saying those. It definitely impacts you when you don’t get it. And as I said earlier in the response to previous question, it impacts everyone in the cycle. I can bet no refinery in India was running on the optimum slate because they did not have the optimum crude. They did not have the optimum mixes. Given the challenges which we had, I’ll be very honest, a lot of our rough the best route to run is some of the question Gulf rules but if they are not available I have to run on the second best where some parameters definitely go down.
So it impacts and in an ideal situation the same assets as I said in response to previous question would give us more returns. That’s why I said broadly the refinery performance is understated in this quarter.
Vardarajan Sivasankaran
Sure. Can I also squeeze in one more follow up on the previous participant question?
Vikas Kausha
Okay.
Vardarajan Sivasankaran
In terms of the what we mentioned earlier is that we have been incorporating some amount of discounts while we purchase crude from the other refiners on the line of export duty this round the revisions on the export duty has not been very frequent and periodic. So are our adjustments run in line with the export duty or are we sort of adjusting more frequently keeping in view the volatility? And is the Target crack around 2022 dollar on diesel and ETF at this point of time?
Rajneesh Narayan
Procurement right. Of the RTPS are adjusted in in line with the declared SAED which is done. And that’s anyway fortnightly exercise. Yeah, yeah.
Vardarajan Sivasankaran
It has not been announced at least to the media in fortnightly business. So is it happening on a fortnightly basis?
Rajneesh Narayan
It is happening as and when the government declares the SAE.
Vardarajan Sivasankaran
Okay. And is the underlying target crack around $20 for diesel and ETF at this point of time?
Rajneesh Narayan
Government would be able to.
Vardarajan Sivasankaran
Sure sir. Thank you.
Operator
Thank you. Then we take the next question from the line of Vikash 10 from CLSC. Please go ahead.
Sabri Hasarika
Thanks for taking my questions. But before I ask my questions, firstly I want to thank Rajneesh Ji for all the help over the last few years and you know, of course congratulations on a great stint and all the best for your future endeavors. And with that I will of course start with an accounting question. Given that it’s Rajneshi’s, you know, super elevating depreciation that I see has gone up, can you confirm when is a large part of the standalone linked capitalization already done or and when was it done?
I mean what would the number look like say in FY27 when for the full year
Rajneesh Narayan
Part of the depreciation has gone up. Because during this year we have capitalized the rough unit
Sabri Hasarika
That
Rajneesh Narayan
Has happened in the last quarter primarily. Plus there is an impairment testing which has been done for some of our assets. So there is an element of impairment also included in the.
Sabri Hasarika
How much would that amount be? The impairment parts
Rajneesh Narayan
That is around 400 for 50 crores.
Sabri Hasarika
Okay. And so would. Is there any other pending capitalization left or. Almost all of the rough has been capitalized now.
Rajneesh Narayan
No, it has been capitalized.
Sabri Hasarika
Okay, so can I say that. That 2400 minus 400 crores, about 2000 crores would be the going run rate or was it capitalized during the quarter and not the full quarter?
Rajneesh Narayan
No, no, it was. It. It almost. It took the full quarter. Yeah. Okay.
Sabri Hasarika
Okay, okay, sure. And just on the LPG part, roughly what is the kind of, you know, LPG loss that we. That we saw for the month of April? I mean personal interlock that we were running for the month of April. Like.
Vikas Kausha
170 in April and 670 higher. You got the numbers? Vias.
Sabri Hasarika
Sorry. 170. Vikas, you said 170 in April. 170 per cylinder
Vardarajan Sivasankaran
For children in April and 670 in May.
Sabri Hasarika
670 in May. Yes sir.
Vardarajan Sivasankaran
Yes.
Sabri Hasarika
Okay. And this number compares to roughly about 84 rupees in 4Q. Is that right?
Vikas Kausha
Yeah. Yeah. Maybe Approximately. Yeah.
Sabri Hasarika
Yeah. Okay, thank you so much. Otherwise I think your opening remark was good enough to answer most of the. So thanks a lot.
Rajneesh Narayan
Thank you.
Operator
Thank you. We will take the next question from the line of Sabri Hazarika from MK Global. Please go ahead.
Sabri Hasarika
Yeah, just two questions. Firstly, already has been asked. So with the saeb, our integrated margins could be similar to the other Onco. So who had a higher refining to marketing mix, Is that right?
Rajneesh Narayan
Can you repeat your question please?
Sabri Hasarika
I mean our refining to marketing ratio was lower than other oil marketing companies. But SAT now takes care of it. Right. That the integrated margin of all the three companies would be similar right now.
Rajneesh Narayan
It would depend on the individual refineries as to what sleep they are having, what rate they have bought the crude fuel and loss. And there are various host of other activities apart from the Saab.
Sabri Hasarika
Right. But the disadvantage which HPCL had in procuring products from other refiners on a very high crack environment that gets sorted
Rajneesh Narayan
Not fully, but partially to an extent. What you are saying is right.
Vikas Kausha
I still don’t get the margin on that defining margin on that.
Rajneesh Narayan
And plus, we don’t know at what level the SAED has been fixed up.
Sabri Hasarika
Right. And second is a bookkeeping question. So what was the GRM, EBITDA and PAT for HMEL in Q4 and FY26 as a whole?
Rajneesh Narayan
GRM for Q4 was around $17 per barrel.
Sabri Hasarika
Okay. And EBITDA.
Rajneesh Narayan
EBITDA for full year was around 6,800 crore. And for the Q4 was 3,300 crore.
Sabri Hasarika
Excuse me.
Rajneesh Narayan
3,300 crores.
Sabri Hasarika
2,300 crore. Positive fact. For the full year. Okay. Sorry. Positive. Yeah. Thank you so much and I’d like to wish Naranji and all the best for his future endeavor. Thank you so much and all the best. Thank you.
Operator
Thank you very much, ladies and gentlemen. We will take that as a last question. And with that concludes the question and answer session. I now hand the conference to Mr. Vartarajan for the closing comments. Thank you. And over to you, sir.
Rajneesh Narayan
Thanks. I again would like to take this opportunity to express my Sincere thanks to Mr. Rajesh Narayan for his extended outreach to the investor community as well as all the support he has been giving to
Vardarajan Sivasankaran
All the analysts and the investors all through this year. It was a great effort and it is a heartfelt thanks from our side and also congratulate him for his future endeavors. I’d like to hand over the floor to the CMD for his closing remarks.
Vikas Kausha
Thank you. It’s been almost one and a half hours you’ve been on this call, so I won’t keep people back further. All I want to say is the team HPK is very committed, very excited with the momentum we have built, of course fighting hard to meet the current challenges, but also equally very hungry to create further things. So we have sat as a leadership group immediately after the results and we’re starting to do the projection which is the next time when how soon can we beat this number? So hopefully you will see great momentum ahead and hopefully these times would pass.
Till that time. I would say stay happy and healthy and keep focusing us. Those of you write reports on us, please share them. We love to hear your views and also learn from what we think, what you think. We are not doing well and again, we’ll connect in three months from now. Thank you and those of you who wish to meet us. We are more than happy to have separate dialogues in smaller groups or individually. Thank you and all the best.
Operator
Thank you members of the management. On behalf of Antiquestrip Broken Limited, we conclude this conference. Thank you all for joining with us today. And you may now disconnect your lines. Thank you.