Note: This is a preliminary transcript and may contain inaccuracies. It will be updated with a final, fully-reviewed version soon.
Mangalore Refinery & Petrochemicals Ltd (NSE: MRPL) Q3 2026 Earnings Call dated Jan. 19, 2026
Corporate Participants:
Swarnendu Bhushan — Co-Head of Research, Institutional Research
Unidentified Speaker
Devendra Kumar — Director Finance
Unidentified Speaker
Analysts:
Unidentified Participant
Mayank Maheshwari — Analyst
Unidentified Participant
Unidentified Participant
Unidentified Participant
Unidentified Participant
Unidentified Participant
Unidentified Participant
Presentation:
Swarnendu Bhushan — Co-Head of Research, Institutional Research
Yeah, we can start.
Unidentified Speaker
Okay. Behalf of we would like to welcome all the participants to this quarter three results conference call of MRPL from the management we have Devinder Kumar sir who is the Director of Finance and we have Subhas P who is head Finance and we also have Avin Gupta who looks after investor relations. So I would request the management to give a brief overview of the results post which we can open the floor for Q and S. Over to you sir.
Devendra Kumar — Director Finance
Good morning everyone. Welcome to the third quarter call to discuss the financial performance of the company. As you are aware of the numbers published last week MRPL posted a significant jump in year on year as well as quarter on quarter performance this quarter the EBITDA earned by the company was rupees 2824 crores versus rupees 1064 crore for the last quarter Q3 last year quarter Q3 healthy market prices, optimum energy consumption and throughput led to published bottom line numbers. Mrpl posted mbm of 67 mbn is a measure for energy efficiency for its capacity and its complexity.
So this was the best number posted in any quarter. The fuel and losses stood at 10.06% for the quarter and which is also one of the best in any of the quarters.
Unidentified Speaker
Further,
Devendra Kumar — Director Finance
Current Debt stands at rupees 9290 crores and debt equity stands at 0.63. If the market remains good and which we sincerely hope will we should be able to reduce the same further during the next quarter. Further for the sake of repetition based on several queries we get off and on. MRPL is now well past its summer water blues Water issues due to desalination plant. MRPL is also a unique refinery in India with three separate crude trains that gives us operational and maintenance flexibility with slightly higher refuenine losses.
The said higher funeral losses will also be taken care within the next fiscal year with grid power project which will bring it under 10 closer to 9.5 but it will be somewhere between 9.5 and 10. We are also the first Indian refinery that is establishing a bio ATF plant at a cost of rupees 36564 crores. The plant will help us to get in compliance with CORIA norms. CORMS is for carbon offsetting and reduction scheme for international aviation fuel and we’ll be able to supply blended ATF across the globe starting from 2027.
2027 is that 1% blended ETF. We have consistently won the prestigious innovation award at the Energy technology meet last visit Hyderabad four years in a row including the current year efforts of our innovation team will start to show from next year when the IBB pilot plant gets running. IBB is for isobutyl benzene. It is a base for pharmaceutical on retail outlets front we are delighted to announce that we have achieved 200 mark retail outlet marks and should be able to complete around the 250 outlets within this fiscal year itself.
For the upcoming quarter the refineries focused on maintaining its operational performance and we expect the market to continue to support us and we should be able to post a reasonably healthy q4 2526 also now we are open to questions and clarifications from our investors and analysts. Please.
Questions and Answers:
Unidentified Participant
Yeah Dhaval, you can go ahead and introduce yourself and ask your question.
Unidentified Participant
Hi, thank you for giving the opportunity. I understand that MRPL exports diesel to Europe and there is a 18 sections package that comes into effect on January 21st. So can you help me understand what is the situation in terms of sourcing of crude that MRPL has now as well as going forward and whether this will impact MRPL’s earnings by any chance or will it will it not be able to export to Europe or how is that?
Devendra Kumar
We are in strict compliance with all sanctions in place and currently there are no Russian crude which is being imported and we will continue to comply with any of these international sanctions regime or government guidelines on so in near future we do not expect anything to stop our export of finished products.
Unidentified Participant
Okay, this is really helpful. And second question I had was in terms of I do understand you have access to vlcc but in the terms of freight rates is the company doing anything to minimize this? And third question I have is on fuel and loss. So you said it is going to be lower in terms of power grid but is there anything else that company is doing to for energy integration as well? So one of course on the freight rates, how is company managing that? And second on energy integration any other programs being run by the firm?
Devendra Kumar
First question first freight rates the we did see a spike in freight rates earlier in Q3, but the freight rates have gradually come down to the normal levels. They stood higher than the averages but it has come down significantly from its peak. So freight rates are not a deal breaker in any of our imports. The point number two regarding energy integration see the location plays a very crucial part based on the availability of the kind of energy the energy mix we will continue to explore further.
Currently some of our energy is being based on the grid availability is being Considered it is already online and next year we should be this particular project should get completed that will bring bring down the FNL well below 10. Right now I do not want to put a number to it, but we are targeting somewhere between 9.5 and 10 and we’ll continue to keep improving because grid availability is something which is slightly or majorly beyond our control. Although we continue to have interaction with the policymakers and our other place in the region.
Unidentified Participant
Yeah, that is helpful. Thank you.
Unidentified Participant
Mayank, you can introduce yourself and go ahead with your question.
Mayank Maheshwari
Thanks. Hi sir Mayank here from Morgan Stanley. A couple of questions from my end. First was in terms of you talked about the crude sourcing changes. Can you just tell us the impact on margins you have had because these crude changes because you’re not disclosing refining margins anymore. So if you can just give us an idea of what’s the impact on the GRMs that you kind of seen. And second, in terms of costs that you are talking about on grid power etc. Can you just tell us is there a way you can also lower your costs on the gas sources side and how much has been the impact on of that if there is any.
And the third question related to was there has been a big of an increase in terms of sulfur prices etc. What has been the impact on margins for you and where do you see those going? Thank you.
Devendra Kumar
Okay, first is regarding the crude sourcing and GRM. If you recollect during half yearly accounts, that is Q2 accounts, we had taken a policy step that GRM computations and depictions and publications are not standardized by the different companies or in any of the forums itself. So we had discontinued publishing that and it is also in line with some of the other major PSUs and other companies also. However, we had given an indicative figure that it is double of what was the quarter one margin. It is still similar.
It is still in a similar range at a cumulative level. Coming to the crude sourcing part, we have consistently maintained our stance that Russian crude were opportunity crudes. They always played a marginal, that is they were in our overall strategy. They were always playing a marginal role in improving the bottom lines. But it was not kept as a crucial factor. We did have a margin on Russian barrels in initially and it had come down significantly towards the latter part of the that is Calendar year.
So loss of Russian barrels is not going to make a significant kind of a impact. Whereas on the finished product size you have seen the cracks going significantly up so that more than offsets the loss on account of Russian barrels. And that is how you see a very healthy Q3 performance of the company. Coming to a question too regarding gas. Can you just re state that I did not get it correctly.
Mayank Maheshwari
So sir, I think the reason to ask that question on gas was that you do use like LNG prices have been high for most of this year and fuel oil was kind of becoming the alternative source for most refiners to kind of run the refineries. As such it was much more economical from going forward basis. Are you seeing any areas where you can actually lower your cost by sourcing cheaper? LNG is where the question was coming from.
Devendra Kumar
See, our LNG consumption is relatively low. I’m not sure quite low. It’s relatively low and we already have a term contract with BPCL and it is at a significantly competitive price. It is not way above. And in fact the newer LNG may in fact be higher than that. So I can. I’ll not disclose the final prices. It is very competitively available to us. And parallel we are also exploring other sources including cgds, including the parent company because parent company also has a certain arrangement with the cgds, especially in the southern areas where there is some untapped gases.
So all those discussions are on. It is yet to be formed up. The commerciality has to be worked out of all the ends both at parent company level, our level as well as CGT’s. But it is still in its infancy. So gas costing is not going to be a crucial issue. It is a very marginal issue. Now coming to the third point. Sulfur. Again, sulfur. We still treat it as a secondary. This it is again treated as a marginal item if the prices are on the higher side. It is not part of a strategy, but it is all right with us.
Mayank Maheshwari
Okay, great. Thank you.
Devendra Kumar
Yeah,
Unidentified Participant
Thanks Menk. Kaushal, you can introduce yourself unmute and go ahead with your question.
Unidentified Participant
Audible.
Devendra Kumar
Yes, Kaushal,
Unidentified Participant
Yes, go ahead.
Unidentified Participant
Thank you for the opportunity, sir. I’m a little new to the company. Just wanted to know what is the revenue mix as in like what is diesel, what is etf? Can you just throw some light on that? And what are the cracks? What were the cracks in. In quarter three and what are the cracks currently?
Devendra Kumar
Yeah, Abel is going to read out the numbers.
Swarnendu Bhushan
So I’ll come to the cracks first. The Q2 cracks were comparatively healthy from when we compare it to the Q1. HSD was around 15, ATF Karo was around 13 and Mississippi also marginally improved from whatever we were earning in Q1. Our further coming back to question number one, volume wise our product slate gives us HSD plus ATF at around 50% and Mississippi at around 15%. And rest of the remaining 35% comes from other products. So this is what a broad level breakup of our product slate is. This also includes 10% of fuel and loss that straight away goes into our fuel part of it.
Unidentified Participant
So I mentioned the cracks question. So Q2 cracks were around $15 to $13 and Q2 and Q3 was how much and how much is it currently?
Swarnendu Bhushan
Okay. So currently it jumped from Q2 was 15 and Q3 was 21 for HSD. Similar for ATF and Mississippi from 8 to 13.
Unidentified Participant
And currently how much is it? Like how much is it The. The ongoing hundred maybe. Currently
Swarnendu Bhushan
It is not as high as 21 and 13 that I told you it has come down and it has moderated to around 1415. This is what the current published cracks are.
Unidentified Participant
So from 21 it’s come down to 1415 and as of now as
Swarnendu Bhushan
On date.
Unidentified Participant
So it’s similar to what Q2 levels were basically.
Swarnendu Bhushan
Yeah. Cracks are right now are in the trajectory that was in Q2.
Unidentified Participant
Understood. Okay. So thank you very much for that.
Swarnendu Bhushan
Thanks Roshan.
Unidentified Participant
Thanks Kas. You can unmute yourself and go ahead with your question.
Unidentified Participant
Yeah.
Unidentified Participant
Hello.
Unidentified Participant
Yeah, hi.
Unidentified Participant
So
Unidentified Participant
Just wanted to understand what would be the impact in terms of higher freight rates in the third quarter. Maybe in dollars per barrel or rupees crore. And second relating question. You said the freight rates have kind of normalized right now. I mean the disruption still remain, right? I mean is it normalized for you or the industry or how to look at it here?
Devendra Kumar
Thanks Akash for this question. I’ll be repeating myself. The freight rates were a concern both from investor analyst perspective as well as our perspective. There was a supply issue. But in the current context other than the Middle east tensions there is no supply crunch for these vessels. Rates are gradually coming down. It is no longer what it was at the peak in Q2. It has come down significantly. But it is not close to the Q1 levels. So there is a big mix of rates. I’ll. I can only say in general terms that it is slightly higher than the Q1 rates but way below the Q2 and Q early Q3 rates.
Unidentified Participant
Sure, sure. That that helps. Yeah. Yeah, that’s it. Thank you.
Devendra Kumar
Thank you, Akash.
Unidentified Participant
Thank you Akash. Sumit, you can go ahead and ask your question.
Unidentified Participant
Thanks. Hi sir. Good morning. Firstly sir, I would. I would like to. You know if you take a five year perspective. Can you throw Light on, you know, where do you see our company in terms of, you know, refining, in terms of marketing because you’re also adding some outlets. So if you. So if I take a three to five year view, uh, can you just you know, share. What are your big growth plans going ahead? Sir,
Devendra Kumar
From a strategy point of view, we have realized that retail is going to be a big player for game changer for the refinery. Earlier it was just like a base refinery but over a period with capacities coming up in other refiners. So we expect that this is the major area where we need to work much smarter. And that is how we are focusing majorly on retail outlets. Because the margins available on retail is superior to what you get only at the refinery transfer. And in fact export sales can be a little volatile.
Occasionally it favors us and occasionally you. There are pitfalls in that export field, export sales. This retail will give us a sense of stability going forward. So in three years time we are planning about 500 outlets and we are keeping this target as reasonable and modest. We don’t want to go overboard. And in five years time about thousand. And that is when the expansion is supposed to reach a very crucial tipping point where the growth rate five years down the line should be much higher. In a typical retail marketing outlet, the establishing the first few hundred outlets is very difficult because you start from scratch but then your way ahead on the learning curve and it becomes speedier and speedier.
So you will see a significant growth in terms of our retail portfolio and we are targeting that particular segment.
Unidentified Participant
So how many. So how many fuel outlets do we have today?
Devendra Kumar
Today we have 200. We’re targeting 250 by this year end, 500 by three years time and that is keeping it as a conservative figure.
Unidentified Participant
Okay, very nice. Thank you sir so much and I wish you all the best and good luck. Thank
Devendra Kumar
You. Sameit.
Unidentified Participant
You can unmute yourself and go ahead with your question. You’re not audible if you are.
Unidentified Participant
Am I audible now? Yeah, yeah. Thanks. So thanks for the opportunity. So see as you mentioned that you are planning to expand from 200 currently to find it and then subsequently 2000 retail outlets. So what kind of investment you see over next five years in marketing and on this is just on the retail side you are mentioning. But what about the depots and the pipeline infrastructure that you are planning to develop over let’s say five year.
Devendra Kumar
We are already. That is aligned with our retail outlets. The question is absolutely right. Any kind of retail expansion requires the secondary capacities to come up. And we are targeting the that the states which are adjoining Karnataka in the near future. And we are also targeting establishment of depots in all these locations. Both on the east coast as well as the west coast. West coast. So Mumbai is a target. Maharashtra, Vizag. And we are looking for capacities. Kerala is target. We already have capacities.
We are also looking at expansion of those capacities based on our retail offtake. And we will continue to also look at the pipelines. The latest being we are targeting the Bangalore airport pipeline. The tenders were already on. The final outcome is awaited. That is the Devan Gunty Devanhalli pipeline. And as and when future opportunities come, we’ll continue to look at those.
Unidentified Participant
What kind of investment in marketing you envisage over let’s say a couple of years or three years down the line.
Devendra Kumar
See, these kind of infrastructure will depend on the licensing, the time. Because the retail outlets do take certain time. There is. So I’ll not give it time frame. But typically the depots could be in the range of 50 to 100 crores annually depending on the capacities. The pipeline would be in the range of 200 an odd crores. So major is major plant is in Mumbai Vizag. This will help us to take care of the entire southern India and depots, smaller depots at other areas. So you can say it will be in the range of approximately 500 plus minus in the near future.
Unidentified Participant
Okay. So my second question. What percentage of our product sales is through our own retail outlet? Currently.
Devendra Kumar
Right now the percentage it is not going to be very significant because we are in that expansion phase.
Unidentified Participant
You have
Devendra Kumar
Still not captured the kind of market. It is a very small fraction of the total volumes, total revenues. It is approximately 2%, 1.5% I believe. Just let me just.
Unidentified Participant
Yeah. And once you achieve that thousand retail outlets in your own retail outlet. So what kind of a revenue expect from your own marketing business? Marketing sales.
Devendra Kumar
As I had mentioned earlier, we are targeting retail as a major revenue earner in future. Reason is that 1000 is ex is only an intermediate target in future. We want this refinery to be a full fledged refinery and marketing business. Not just limited to only refining. So right now we are keeping that 1000 as a intermediate target. About five years target. Because we do have certain challenges when you are entering the market for the first time in many of the states. So that is a critical inflection point.
We expect after that we should be targeting higher numbers based on the experience. So it is targeting retail outlets as well as the depots. That is the support. We are also opening offices like Chennai Office is a major office. We also intend to have more marketing offices in the upper Karnataka region, Andhra region, Telangana and Mumbai region. So these are our medium term targets.
Unidentified Participant
Yeah sir, and just last question from my side before I join the question queue. So what about this is. You are talking about the retail outlets. You mean the petrol and diesel. But what about the other products? Products marketing. What are your plans? Because there will be some pressure for the other products as well with the other oil marketing companies are expanding their crude throughput or refining expansion. So what are your plans for the other products?
Devendra Kumar
See the next, apart from Ms. And diesel, the next is the etf. Etf where we are very well placed. And technically as I mentioned we would be one of the first to be compliant with that Corsia standards. And based on our tie up with the Shell, that is the affiliate company, we expect this particular business to keep growing and we intend to. We expect this market share to be completely built with us. We do not see any dent in our ATF holdings going forward.
Unidentified Participant
Okay. Okay. Thanks. Thanks a lot sir. Thanks and all the best.
Devendra Kumar
Thank you.
Unidentified Participant
Thank you. Nilesh. Kaushal, you can go ahead with your question.
Unidentified Participant
Thank you for the opportunity once again. Sir. Am I audible?
Devendra Kumar
Yes, Kaushal.
Unidentified Participant
Sir, I just wanted to understand. We have a 15mm TPA plant. What would be the replacement cost for. For a plant like this? If we were supposed to set up this plant from scratch. If someone was to set up from Scrat, what is the capex required for? Maybe 1mm TPA. Can you just put some light on that?
Devendra Kumar
See typically there are certain thumb rules and it varies from location to location. And also on the complexity what you are planning ultimately. So if you take the latest bar mirror as a say the latest edition, it is almost like 8,000 crore per MMT. It could be higher if you are planning a more complex sourcing and more complex processing. But 8,000 crore per million ton, that is like a benchmark.
Unidentified Participant
So depending on complexity that we have currently for that also it’s 8000 crores per. It
Devendra Kumar
Will. It will. It will of course increase. Because you are not just refining crude for your primary products. But then there are other intermediate plants which have to be put up. So for the pet camp that will take it to higher than 10,000 also.
Unidentified Participant
Okay, so 7 to 10,000 is a reasonable point of view. If I was to just think of replacement. Yes, that.
Devendra Kumar
That is right
Unidentified Participant
Answer. Why were the cracks. Why did the cracks suddenly shoot up in quarter three? What was the reason? Was there some global reason or any Anything that you could pin to
Devendra Kumar
You. Follow the market more than us. You know the reasons. We have a lot of uncertainties prevailing in the market sourcing commercial and these sanctions. So these are playing a very complex. I can only say that this is a complex play. It is yet to stabilize and this complexity is not to go not going away immediately. So as it was mentioned in the first, very first question that end of January what are going to be the implications of the sanctions overall compliant. That will also come into it.
So we are also waiting and watching and aligning ourselves to evolving market.
Unidentified Participant
Sir, if we want to have a management meet, how do we get in touch with you?
Devendra Kumar
You are welcome to Mangalore anytime. And all of you, you are welcome to Mangalore. You can also see a refinery. I’m sure it is going to impress you.
Unidentified Participant
So how can we get in touch? Should we. Who’s the concerned person who we can get in touch any email address.
Swarnendu Bhushan
You can get in touch with me anytime, whenever you want to visit. We can plan that.
Unidentified Participant
So can I have an email address please?
Swarnendu Bhushan
This is Avin Underscore Gupta.
Unidentified Participant
Avin
Swarnendu Bhushan
Avin underscore gupta.co.in.
Unidentified Participant
Thank you sir. So thank you very much for your patience.
Swarnendu Bhushan
Thank you.
Unidentified Participant
Thanks. You can unmute yourself and go ahead with your question.
Unidentified Participant
So basically now that the Russian crude is no longer the part of the state, can you provide a broader percentages? I understand Middle east is a majority, but still if you can give us whether it’s where exactly the crude is being sourced in terms of the percentage or broader percentage or the. Yeah, if you can provide some guidance on that.
Devendra Kumar
See about 40% of our crudes we have collectively together with government of India we are committed to Middle east crudes led by Saudi Aramco. So that gives us a very stable kind of sourcing whatever may be the geopolitical conditions. And we would continue with that. Apart from that we have the tender process and tender processes aligned more to the because we do have a complex, complex refinery and our product mix will decide the kind of crudes which are required. Sometimes you require very sweet and light crude, sometimes something which is heavier.
And it is a combination of. It could be from Middle east also but it could be from the domestic suppliers or domestic producers from ONGC both East and west coast as well as Mangla crude. And we also have this arrangement of that is one to one sourcing. And those arrangements or removes are in place. In some of the cases like with the TOTSA or adnoc, those can always be relied upon in near future.
Unidentified Participant
It’S okay. I understand. And is there a minimum percentage of high self accrued that you maintain in your state?
Devendra Kumar
I didn’t get a minimum number of.
Unidentified Participant
Minimum percentage of high self accrued that that could be maintained. That would be maintained in your refinery slate. I understand there will be different products and different requirements, but is there a benchmark that is that we can keep like the high self accrued and that you would have in your refinery?
Devendra Kumar
So high, high sulfur crude. We don’t target high sulfur crude. We target based on other components. And if it turns out to be high sulfur, it is not a no go for us. It’s not a deal breaker because we have a sulfur treatment facility in our refinery. So for us it’s not an issue.
Unidentified Participant
So let’s say, let me. So if I have to gauge how much percentage of heavier crudes do you particularly use or is there a minimum pen benchmark that you have for heavier crudes?
Swarnendu Bhushan
Yeah, up in this side. So see, as you already know that our refinery is a complex refinery. We can even process heavy crude such as Mere or Maya apart from whatever we are processing currently. But we can go up to 1615 API also. This is the capability the refinery has. But it really depends on the economics at that particular day when we are purchasing the crude that what crude we are going towards. Our refinery is obviously biased towards heavier crude because that is economically more suiting us because of the complex nature of the refinery.
But I cannot tell a thumb rule percentage that this much only or, or around a set percentage. We are process only heavier crude and not the lighter crude. It really depends on the opportunity that we are getting and the complexity and the economics that the product will bring us to the table.
Devendra Kumar
I’ll put the same thing in simpler terms. See, a more complex refinery, heavier crudes can be processed more easily.
Unidentified Participant
No, no, I understand. And yeah,
Devendra Kumar
If we don’t get the heavier crudes at a cheaper rate, we would not go for heavier crudes. That is the simple commercial reason for.
Swarnendu Bhushan
Currently, for, for the nine months I can mention that it is around 70 to 72% the heavier crew.
Unidentified Participant
Oh, okay, understood. That is helpful. Thank you.
Unidentified Participant
Yeah. Sir, we have two questions in the chat box. I will read that and please try to answer that one. So the first question is asking that the throughput that we have detailed in our Press release is 4.7 million metric tons whereas EPSC is measuring 4.561 million ton. Any reason for the discrepancy in the group?
Devendra Kumar
See, what we have published is what I have immediately regarding the PPAC numbers I’ll have to. I can only get back to you. I will not be able to commit immediately because I don’t have that with me immediately. You said it is 4.56. I hope there’s confusion between the production numbers and throughput numbers. We’ll get back to you. And
Unidentified Participant
4.56
Devendra Kumar
You have the number.
Swarnendu Bhushan
Yes.
Unidentified Participant
One
Devendra Kumar
Sec.
Swarnendu Bhushan
So the thing is the 4.56 that you mentioned was the gross crude percentage. The 4.7 that we million metric ton and the 4.7 that we reported in our financials that was the net crude percentage. So our revenue and the rest of the things and the bottom line is driven by the net crude. That is why we focus on net crude and not the gross crude.
Unidentified Participant
The second question is is MRP looking to buy oil for processing? Yes,
Devendra Kumar
So we are actively looking at it. We have not decided but we are looking at depends on the commercial terms because freights are expected to be on the higher side when the rate is also that is low API crude. So we will look at the total terms and condition and the commercial
Unidentified Participant
And. The last question is if you can highlight what CapEx you in the quarter. Three
Devendra Kumar
So we have committed earlier also in Q2 that overall CapEx on an annual basis is in the range of about 1500 crores. That is the kind of capex we target. It’s a mix of revamping as well as small time. That is some capacities which we keep adding. It’s not a capacity addition of total this but intermediate products like IBB was one such product or grid infrastructure. There are some other minor projects also some pipeline that is you change. Yeah. Rerouting. Yes.
Unidentified Participant
Sure sir. Sir, one last question from my. So we have also announced this isobutyl benzene pilot that we said that we need to in the next year. So before we take our question I think also has a question if you can unmute yourself and go ahead.
Unidentified Participant
Yeah, hi morning. Am I audible?
Devendra Kumar
Yes please.
Unidentified Participant
Yeah thank you for answering all the questions. I just had one follow up question on the CAPEX part. So you mentioned that 1500 crores that we are planning to do in FY26. If you could just help me as to how much we have incurred till December and also your guidance on FY27 basis because I believe there should be some tapering off in Capex if at all we include the IBV part and also how do we see the return metrics and the project of isobutyl benzene that is coming up and how it will add to the profitability part.
And lastly, sorry for the elongated question. Lastly how should we see as the dividend payout policy for this year and next year as well considering we are going to do good numbers in Q4 as well similar like Q2 numbers. So a bit of clarity on this will help. Yeah, thank you.
Devendra Kumar
I’ll answer the last question. First on the dividend part. A dividend per se is not out of discussion and it has to be seen in the context of the three requirements. One is our own CAPEX requirement. Second is the kind of debt which we carry and the third is of course the dividend. So compared to last year’s annual profitability this three quarters have been relatively good. And we did post push some of our ongoing CapEx to this this year those should get completed and if Q4 remains profitable that we might, that is the not me personally, the board might actually look at dividend also.
So that I will leave to the decision of the board. But that is definitely on the anvil that looking at the overall fourth quarter there could be a dividend possibility. Now coming to the first question. First question was in
Unidentified Participant
December
Devendra Kumar
The capex was 887 crores. That is first three quarters. And some of our these projects should be coming to a major technical closure by end of March. So this could go up to about 1500.
Unidentified Participant
Got it sir. And any clarity on next year’s capex. Numbers FY27
Devendra Kumar
It will be in the similar range. Because revamping is something which keeps happening constantly. You need to maintain the plant in best of working conditions. As you can see the plant is but for the shutdown first quarter shutdown we would have continued to have throughput of almost 18 mmt. It is almost 120% above the nameplate capacity. And to keep the plant running at the top performance you need to continuously keep looking at your equipment and whatever requires revamping has to be attended to.
So we do have some ongoing projects plus some are opportunity projects like I said, the rerouting of pipelines. So the target remains in that ballpark point of 1500 crores.
Unidentified Participant
Sure sir, thank you. And just very lastly in that number that we are looking at considering that we have a commendable achievement to push the debt below 10,000 crores as of now. So how should we look at the debt numbers moving in this year end as well as 27?
Devendra Kumar
You have seen a balance sheet. We have NCDS on our books. Those NCDs are not due till 28. So whatever has been Paid in December. After that the next due date is 28. So it’s almost 4500 crores is locked till 28. So the next big item is the ECBs and ECB is right now there’s some volatility but otherwise the ECB gives us a certain cushion. So we are actively evaluating that. It’s a trade off between debt reduction because if I have to pay off that ECB right now you do incur there is a foreign exchange loss.
We do expect forex market to move if the US trade deal comes through and we’ll take a call accordingly. Right now it is 9:3 and it could come down. Not very significantly but it might come down if the market remains favorable.
Unidentified Participant
Okay, got it. This was very helpful here. Thank you so much and congratulations to the team.
Devendra Kumar
Thank you.
Unidentified Participant
Sumit, you can unmute yourself and. Sumit you can use yourself. I think there is no response from his line sir. So. Can
Unidentified Participant
You hear me now?
Unidentified Participant
Yeah, okay,
Unidentified Participant
Yeah,
Unidentified Participant
Sorry,
Unidentified Participant
Sorry. I mean sorry about that. Coming back to, coming back to your, you know, your point on fuel marketing since you know you’re looking at you know, a 5x kind of growth, you know, over the next five years. So sir, you know, if I’m you know, if I recall this correctly, you know when Reliance and BP had done deal, you know the valuation which they took, you know was basically at about 10 crores per fuel outlet. So can you basically conquer with the same that you know the cost to set up one fuel outlet, you know should be you know something like at least about 5 to 6 crores.
That I mean the, the pure reason I asked this is today, you know in, in the listed domain, you know we’ve got our parent as well as you know oil marketing companies which are trading at you know, subpar valuation, you know so can you just help understand you know on one side, you know we see the reality is that you know there is substantial amount of growth in the market that you know, not only you but all the companies are adding you know, retail outlets and you know you’re kind of clearly seeing, you know from Mr.
Hardeep Singh Puri also talking about making India refining hub of about 303. But to the other side, you know you have the stock markets which don’t value these companies. So can you help understand, you know, the digress between the two and you know on the valuation of fuel marketing would really help a lot.
Devendra Kumar
That’s a very interesting question and I would love to answer that. So thanks for the question. So first things first, the retail outlets, the cost is significantly different depending on the location. So if it is a urban location, you are right, it could be much higher. But all the newer outlets which are coming up, so we have a mix of outlets coming up. We are also bound by certain guidelines of the ministry, government guidelines. So it cannot be only urban or only in the cities or only on the highways.
There is a mix and match. So the outlets and we also have that is plain vanilla kind of outlets and as slightly smarter outlet. So the cost would vary from as low as about 1.5 crores for a smaller outlet to something what you have mentioned and that will be for a bigger city kind of environment. So for us also it is a very similar mix and match. Right now going forward we have advertised depending on the responses, on an average it is coming out to be in that range of 2 crores. That is the current.
But whether it will continue to be in that range, same range going forward, I cannot comment on that. It will look, it will depend on the market response,
Unidentified Participant
Understand? And sir, I mean just one question, you know, I mean to the earlier participant you said that, you know, the cost to set up one MMT, you know, of refining is about 7,000 crores, if I heard correctly. So today, you know, for example, you have about 15 MMT, okay. And your throughput as you mentioned is about 18. Okay. But you clearly see your market cap is only 25,000 crore, you know, so the point I’m trying to make is that, you know, what steps, you know, are you guys taking, you know, to increase market capitalization?
Because you know, these companies, you know, need to start trading at a much, much higher P multiple, you know, than what they trade today. So can you share some thoughts on that as well?
Devendra Kumar
Sumit, you have asked a question which we also ask yourself. But yes, depending on the feedback. This is a common troubling point for all the OMCs. It’s not just us, it is all the ONCs, PCO OMCs that the valuation is much below. You rightly pointed out that and one very crucial fact is that almost the entirety of the pricing and the taxation is still considered controlled by the government despite all the deregulations happening in this space. I’m referring to your fraternity. We keep getting that feedback and one is like we had the saed, although it is no longer there.
You never know if in a crisis you might again come up with some other kind of tax. That is the kind of feedback which we have got in case of mrpl. One peculiarity is that Our float is very limited. Almost 88% is with the one you see MRPL and only balance 12% approximately is in the open market. Even in that 12% about 1% would be locked up those non, non participants. So the float is also issue and we are examining it together with our parent companies to address that float issue.
Unidentified Participant
Yes sir, thank you so much and I’ll and I’ll probably connect with you offline. Thanks a lot sir. Thank
Devendra Kumar
You.
Unidentified Participant
Thank you. Sumit. Sir, we have a couple of more questions on the chat box. What is initiative to reduce the crude sourcing cost?
Unidentified Participant
What is the initiative to reduce crude sourcing cost?
Devendra Kumar
Are you sorry I didn’t get the question correctly. Is it referring to the freight or overall?
Unidentified Participant
So it would be on overall sir. So I think whatever we are doing in terms of reducing the total cost of purchase as far as the crude basket is concerned be it great or maybe be it say sourcing change in terms of long term, short term or taking benefit of arbitrage, crude or safe rate as well.
Devendra Kumar
Okay, thanks for this clarification. See like any other refinery we are also marked to market. We are not in a league to be actually dictating any of these things like OPEC or any other large company. Our margins are derived not from the absolute rate, it is derived from the cracks. And that is where we make our major earnings from. And this is where we keep targeting. That is a mix of export, a mix of domestic term sales. And now we are also targeting the retail outlets. That is where the margins for the company are.
It is not just the sourcing, it is the margins which are important to us.
Unidentified Participant
Another question is on our retail throughput outlet what volumes are we doing for outlet per month?
Swarnendu Bhushan
I’ll come back on the retail outlet volume part. You may proceed with the next question. I’ll clarify in a minute.
Devendra Kumar
And just correct that NCD number. What is that number? Yeah,
Swarnendu Bhushan
3,000 the NCD that was asked. The number is 3,260 crores that we. Are having
Devendra Kumar
Right now. This is the balance amount 3260 and.
Swarnendu Bhushan
ECB amount is 500 million. That comes to around 4500 crores.
Unidentified Participant
So next year and next year we have also guided around 1500 odd crores of capex. Is there a breakdown of the same thing in terms of what is the maintenance capex and what will be going into IBB or anything like that?
Devendra Kumar
I’ll request my team, they’ll give you the breakdown shortly. We can go take the next question.
Unidentified Participant
Question is how much percentage of refined products are we exporting. Currently.
Devendra Kumar
We export almost 40% of our products in exports right now that is the percentage it may change quarter on quarter but I’m giving you the figure from on a running basis last year.
Swarnendu Bhushan
And additionally the retail outlet sale is around 120 KL per month per outlet.
Unidentified Participant
Thank you sir this one question one of time that basically the person is asking what is our expectation on GRM considering that capacity is becoming constrained globally.
Devendra Kumar
GRM if you follow the markets it is still quite healthy Although we did say that it is going closer to Q2 in fact it’s not as high as Q3 but it is still quite healthy and it suits us fine because very high GRN we know market will not be able to sustain the kind of GRNs which we saw in Q3 we did have spikes beyond a 21 also.
Unidentified Participant
So that’s all from the chat box Also sir, if you have the capex breakdown we can take that and otherwise we will.
Devendra Kumar
Capex breakdown you have. Just give us half a minute. Yes.
Swarnendu Bhushan
So in 1500 crores, around 400 to 450 crores will be towards the growth part of it so retail outlets and other projects or grid, power, import and all those things the rest you can take towards our majorly towards maintenance
Devendra Kumar
Revamping. That is what we got.
Unidentified Participant
Just one last question what is the IRR we are expecting from IBB? If you could share some finances in terms of ISOB 12 billion project that we are doing what of capacity required capacity and all that stuff.
Devendra Kumar
It’s regarding IBB the still yeah, it’s a pilot project and we are still quite a few years from its commercialization so we need to go across many decision gates first is the technical that is the inspect inspection of that it has to meet that stringent quality norms and we are quite hopeful of that after that to get the licenses for the first we still see about three, four years down the line and only after that we’ll be in a position to take a realistic view on the irr. It also depends on the market conditions at that point in time so right now taking a call on IRR is a little too early to comment on that.
Unidentified Participant
Okay sir, so that was the last question sir, on behalf of PL Capital we would like to thank all the participants for the valuable time. We’d also like to thank the management on sharing their insight so details. Thank you very much sir have a nice.
Devendra Kumar
I would like to thank each one of you who has shown interest in the company and taking time out I would like to re emphasize. Each one of you is invited to visit our plan and we are available to meet once again in person. Also, thanks for your time and if there are any questions which remain like ambiguous or unanswered, please free to contact my investor cell. Aven Gupta is the person and we’ll be happy to respond to you once again. Thank you.
Unidentified Participant
Thank you, thank you.