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Good morning, ladies and gentlemen. I'm Pavitra, moderator for the conference call. Welcome to Bharat Petroleum Corporation Limited 1Q FY '21 Post Result Conference Call hosted by Batlivala & Karani Securities India Private Limited. [Operator Instructions] Please note that this conference is being recorded. I would now like to hand over the floor to Mr. Bhavin Gandhi of Batlivala & Karani Securities India Private Limited. Thank you, and over to you, sir.
Thanks, Pavitra. Good morning, ladies and gentlemen. On behalf of Batlivala & Karani Securities, it gives us great pleasure to host the 1Q FY '21 post result conference call of BPCL. I would now request the management of BPCL to start with the initial remarks, and post which, we'll open the floor to a Q&A session. Over to you, Jenny ma'am.
Thanks, Bhavin. On behalf of the BPCL team, I welcome you one and all to the post Q1 result con call. Before we begin, I would like to mention that some of the statements that we would make during this con call may be forward-looking in nature, and we believe that the expectations contained in such statements are reasonable. However, their nature involves a number of risks and uncertainties that may lead to different results. These forward-looking statements represent only the current expectations and beliefs, and we do not provide any assurance that such expectations will prove correct. Since this is a quarterly result review, please restrict your questions to the Q1 results. I now request the Director, Finance, Mr. N. Vijayagopal, who is leading the BPCL team for this call to make his opening remarks. Thank you, and over to you, sir.
Good morning, everyone. I hope you'll probably are keeping safe and healthy. You would have gone through our handout giving the corporate results. I would like to bring to your notice a few highlights for the quarter. The pandemic has had a significant impact on the economy. Lockdowns, restriction mobility and declining industrial activity, has restricted our combined MS and HSD sales to an extent of 38% of normal sales in April, sales picked up immediately to 68% of the normal levels in May. Post the easing of lockdowns, the sales have improved further to more than 85% in June. We may also present the same levels especially on account of the monsoons, which are heavy. Our situation is improving, and as of August, we have almost reached about 90% of the normal levels of sales. Among the other products in case of aviation turbine fuel, we are predominantly into the international side of the business. And as the flights were not operating, our ATF sales also suffered. HTF is at around 20% of the Q1 sales of the previous year. LPG has however shown growth of 11% for the first quarter compared to the first quarter of the previous financial year. With a lower demand anomaly, coupled with excess supply MS cracks declined from an average of about $5 to a barrel in the first quarter of the previous financial year, to just about $0.5 in the first quarter of this year. Similarly, HSD cracks declined from $13 per barrel level to just over $7 per barrel in this first quarter. Indigenous trends, note that BPCL's GRM declined to $0.4 in the first quarter of '21 as compared to $2.81 to a barrel Q1 of 2020. This is -- though it is very small, I would like to add that this is the best time in the OMC space. Our distillate yield has improved compared to the previous first quarter from 85% to 86%.In this quarter, what we have done is that our first priority was to ensure that our product reached each and every corner of the country, and there was no stock out and the profitability has been a focus of our company. With this engine view, what we did was we restricted throughput to meet the requirements of the market at -- by at least as 51%. We had a throughput of 5.14 million metric tonnes in this first quarter compared to 7.45 million metric tonnes in the first quarter of previous financial last year.Our EBITDA has increased by 66% from INR 2,718 crores in first quarter of financial year 2020 to INR 4,509 crores in quarter 1 of financial year 2021. The profit after tax has increased by 93% from INR 1,076 crores to INR 2,036 crores. Given the current situation, we have moderated our CapEx targets for financial year 2021 from this INR 12,500 crores to INR 8,000 crores. However, there has been no impact on the major ongoing projects on account of this moderation. The newer and minor projects are being reviewed and attended to, after we take care of the ongoing critical projects. All the ongoing projects are up and running now. In spite of multiple lockdowns, we extended about INR 900 crores as CapEx in the first quarter against the revised annual target of INR 8,000 crores. We are confident that as the economy grows and the normalcy is restored, we should be able to meet this annual target of INR 8,000 crore CapEx for the year. There was a construction slowdown with the COVID lockdown in April, May, but the work on major projects have returned to normal. Our current borrowings is at INR 34,545 crores and have reduced from the March 31 levels of INR 42,000 crores. These are excluding the lease obligations, amounting to about INR 56,000 crores in the financial year 2021 first quarter. The debt-equity ratio, which has gone up to 1.26 at the time of -- at the end of financial year 2020 is currently at 0.98 with the improving situation. As of March 31, we had around INR 6,200 crores outstanding receivables from the government. Currently, the dues amount to around INR 4,300 crores. There is no under-recovery for PDS, SKO at present and even the subsidy levels of LPG have come down due to the decline in international prices. I now invite for questions or clarifications at this time. Thank you.
[Operator Instructions] We have first question from Vidyadhar Ginde from ICICI Securities.
So my first question is on the cost of your crude inventory and the volume of crude and product inventory in June end. And the second question is on the -- what is the GRM and profit loss of BORL and NRL?
BORL GRM is around $3 and NRL GRM is -- after considering ED benefit is $25. Inventory levels as on June 30 is, one, for crude in transit and in tanks totaling to 1.62 million metric tonnes, and the average rate comes to around $38.
We have next question from Amit Rustagi from UBS.
Sir, could we understand that in this quarter, when we started April month, the oil prices were much lower. And now at the end of June, the oil prices have already doubled to $42, $43. So still how come we are having inventory losses because some of the independent refiners have reported the inventory gains for the quarter. That was my first question. If you can help me in understanding that.
Most of the inventory of March '20, actually that we have valued last time also in the con call we have explained. March '20 inventory, most of the inventory just cost only we have valued. If you see the marked inventory valuation is high as compared to the prices of April and May. Since the actual production in April and May is very low. So March inventories have continued in the month of April, May and some part of June also. Only the actual trend has reversed only in the month of June, that was a major reason still in this quarter that there are some inventory losses for the same reason.
Amit, compared to Mr. Gupta has told you. The month of April was -- has seen the lowest prices. Because crude prices were around $80 to a barrel in the month of April, which was much lower than in the month of March. It reached around $29 as we reached May, and further increased to $40. So there has been ups and downs, and there has been trading losses also due to COVID reasons.
Okay. And sir, could you help us in understanding the project updates. Particularly our polypropylene project in Kochi. And also, have we reached to the maximum possible hybrid grade of crudes in our crude slate? Or you think still more optimization can be done from here?
Polypropylene project, actually, it requires the involvement of various licenses. So because of the pandemic, especially the European site, we are unable to actually progress on that beyond the design steam. We are actually waiting for the normalcy to restore. We are very serious about that project. But then we have also made a further review of the project at current prices because the reports were made in the year 2013. So we still have a even benefit of the current situation, and we are still confident that the project would be viable and very profitable. So the other question was on the utilization of the capacities in Cochin for the various types of crude, I think, right?
Yes, hybrid grade of crude. Yes.
Yes. The -- as I was mentioning last time also, Cochin has the flexibility to focus almost all types of known crudes in the world today. But however, the price differentials are not very significant and make a meaningful difference. And today, we are actually using Cochin to its potential. They are -- they can actually process -- they can actually have a throughput of almost as close as 70 million tonnes a year. That has been proven in the first quarter of the -- last quarter of previous financial year. This time, as I was mentioning in my introductory remarks, we have restricted throughput for both Mumbai and Cochin because of the demand constraints.
Adding to what sir said, KR process is 97% high sulfur crude as on date.
As on date. Okay. Okay.
We have next question from Sumeet Rohra from Smartsun Capital.
So 1 trend we've been observing over the last -- I've been analyzing over the last 4, 5 years, is that a significant portion of our EBITDA would come from refining and marketing was contributing far less. Over the last, basically, couple of quarters because refining has been pretty subdued globally, a significant portion of EBITDA is coming from marketing. Now, sir, if you can please help give us some more confidence that this kind of marketing performance, what we are doing and the industry is doing, is here to stay because then that as an investor point of ours it will drive a massive re-rating in all the oil marketing companies. So sir, can you help us understand that -- this strong marketing margins, what we are basically having over the last maybe couple of quarters, would continue and would help offset the refining decrease, sir?
Actually, as our marketing margins are normalized over a period of a year. So if you see the last 4, 5 years, it has not shown any significant increase expecting for some adjustments on account of upgradation of your quality from BS-IV to BS-VI. So there are fluctuations, as you say, 1 month, 1 quarter, but over a long period -- longer period of an year, if you see the last 4 or 5 years also, the marketing margins has been almost at the same standard level. Refining margin, of course, has taken a hit especially this quarter because of the crisis has been very low. So I don't think that there will be wide fluctuations in the marketing margins over a sufficient loss period but it is unfair to compare only 1 quarter and confirm, and we will not be able to confirm that the level of margins which we got in the first quarter will be replicated in the rest of the year. But I can assure you that for the 2021 also, we will be able to have a standard margin or near about that for the whole year.
Okay. Fair point, sir. And sir, my second question is how many fuel outlets do we currently have and how many fuel outlets are we planning to add in this current year, sir?
Yes. We -- okay, tell.
Currently, we have 16,492 outlets. And during the running year, we have already added more than 250 outlets in the first quarter. We'll be adding more than 1,000 outlets during the year.
We have next question from Pinakin Parekh from JPMorgan.
3 quick questions, sir. First is, if we look at the adjusted GRMs, Kochi was substantially higher than Mumbai refinery this quarter. Is this something which is sustainable? Or is it just because the way inventory accounting took place that we saw Kochi reporting better GRMs than Mumbai on an adjusted basis?
It depends on the kind of inventory accounting and also the types of crude both the refineries have processed.
Understood. Sir, my second question is that when I look at the debt position, the INR 40,000 crore has come off on a Q-on-Q basis, but still remains elevated versus last year levels of INR 30,000 crores. Given the visibility that the company has at this point of time, does the company expect the gross debt to come off materially to last year's levels? Or should it sustain at these levels?
Actually, the crude -- debt levels have come down as you have observed from March to June. Today, we have working capital requirements higher than in the normal time because we are holding significantly higher levels of product inventory. Because of the reason that the progress of the demand growth has been like a V-shaped curve, from April to May to June to August. So once the situation becomes normal, our working capital requirements will also come down. And we hope that our debt levels will come back to normal levels of about INR 20,000 crores.
Understood. Sir, last question is, sir, Bharat Oman Refineries remains a joint venture, right? There is no move to convert the debt into equity and become a majority shareholder?
Actually, we have converted their convertible warrants as per the terms of the warrants issue at the end of the 7 years, in the month of March. And we hold today 63% shares in BORL, so it has technically become a subsidiary. But for the purpose of accounting because of the standards, the control because we have an investor rights agreement with the partner, it continues to be treated as a joint venture for the consolidation purpose.
Understood. So while BPCL has 63% ownership of the BORL. In terms of management, it is split control.
Yes, because then we have an Investor Relations agreement with that company. And because of that, the control is exercised jointly and therefore, the accounting standards requirement of a subsidiary is not fully met as of now.
Understood. So any moves to change that, sir, investor agreement with the change in ownership?
We are actually in the process of being disinvested in the next maybe 6 to 9 months. We are in discussions with Oman. And at this stage, we are not in a position to further confirm or deny our interest in this regard.
We have next question from Manikantha Garre from Axis Capital.
First, I wanted to confirm what was the percentage of high sulfur crude processed in KR in Q1?
97%.
It was 97%, Manikantha.
97%?
Yes.
Okay. And my second question, sir, wanted to check on your fuel retail outlets target. You have mentioned that you're going to add 1,000 retail outlets this year. In general, wanted to know have -- whether you take into account the possibility of supplying CNG, LPG or LNG at your retail outlets, while you design the new set of outlets in terms of space, safety requirements for outdoor sales basically?
So we have a plan, already the retail outlets are selling CNG, and we have a plan to further utilize the capacity and the locational advantage of our outlets for CNG. LNG is not being sold to the outlets.
So out of the total outlets, 531 outlets BPCL sells CG (sic) [ CNG ].
CGD (sic) [ CNG ].
CNG.
CNG.
Okay. Sir, so my question is with respect to whether you also plan to add CNG? Are you provide the facility to add CNG, LPG, LNG in the future when you want to do that? Do you also account that in the design of the retail outlets?
Our current outlets itself has paid for additional CNG wherever it is possible. So that provision is always there.
So across all the new outlets, that provision is always there in it?
Not always.
No. It depends upon the location at which we are planning. If we feel that it is feasible and beneficial in a particular area, so we already have the space and the assets and infrastructure available. So we can take suitable decisions at that time.
We have next question from Probal Sen from Centrum Broking.
Sir, just a thing that we have noticed in terms of domestic volumes. In the last 4 or 5 quarters, our domestic volume growth at least has kept track with what industry growth has reported typically by the PPAC. This time around, the differential in that has actually grown quite a bit against an industry reported growth of -- big growth rather of 26%, our volume seems to have declined by a much higher percentage. Any insights you can offer on why that would be?
I can tell you that, as you must be knowing, BPCL is predominantly a strong player in the urban space. The pandemic has affected in India, mostly the urban space. Delhi, Mumbai, Kolkata, Madras, and our presence in the urban sites, metros and cities and towns in the Tier 1 and 2, which is significant. We are a leader there. That has affected our volumes considerably. Almost -- we have lost about half of the volumes in the cities because cities have faced the impact of the lockdown, especially places like Mumbai and the state of Maharashtra, where we are very strong. And in Tamil Nadu, where we are very strong. It has been -- it just affected us. So in the -- in this quarter, we have lost the volumes, mainly on account of that compared to the industry. So either way, we can say that the pandemic has helped the -- our competition do well. But as the situation normalizes, we will definitely do much better.
Right, sir. Sir, the second question was -- and I apologize if you've covered it in your opening remarks, but just a granular CapEx guidance for this year and the next? And have there been any changes due to the COVID lockdown for this year's CapEx plan?
Yes. So earlier, we had planned a CapEx of around INR 12,500 crores, which because of the situation, we have reduced the target to around INR 8,000 crores. So out of the INR 8,000 crores in refining, in the current year, in the first quarter, we have already spent around INR 900 crores. So that bifurcation goes INR 450 crores for refining and INR 450 crores for marketing. And as far as the target is concerned, so in the refining sector, we'll be spending around INR 2,300 crores. I'm talking about the 2021 CapEx target of INR 8,000 crores. Yes. The marketing would account for around INR 3,500 crores. INR 830 crores we have kept for petchem and around INR 8 crores we have kept for exploration business. And then the balance is for gas and other businesses.
Okay. And sir, last question, if I may. Any update you can give on Mozambique.
Mozambique, as you know, we have got the FID and the project financing agreements are being signed in July -- have been signed in July. It is for $14 billion.
Okay. So project finance agreements have already been signed. Hello?
Hello? Yes.
Yes. So ma'am what's the time line for staring now? Any fresh time line?
So the time lines have remained the same. Just because of the COVID, some operational difficulties were there. However, we -- they have been adjusted in the time line. And still within 4 years, we are expecting the project to complete.
We have next question from Vinit Joshi from Goldman Sachs.
Yes, okay. So my first question is on marketing margins. You mentioned that like across, let's say, over a year, they remain pretty much constant. And you also mentioned that the margins have increased a bit to factor in the upgrade program that you have taken from BS-IV to BS-VI. So can you just tell us that what the margins were before the upgrade program and what the margins are after the upgrade program?
So we do not put a number on CapEx for BS-VI margin. However, we have...
Not CapEx, sir, we are looking for margin, just fuel marketing margins. I mean, I'm not looking for any specific number, just ballpark like what the number was before this and what it is now? I'm not saying for any quarter. I mean, from like a full year, what is your expectation? And how it would have changed because of the CapEx program?
See, there has been an increase in the marketing margin to take care of the BS-VI costs and the CapEx. And the marketing margin is now stable, and it is in line with our expectations.
But what is the number ma'am? I mean, what is the...
No, I will not be able to give you an exact number.
Yes, okay. All right. No worries. My second question is with respect to the CapEx program, ma'am. So I think there is a substantial cut in CapEx. So I wanted to understand whether this is more because of the current environment, some of the projects have not met your IRR threshold? Or is it more a deferral to next year? If you can just help us understand that.
Actually, we have not expended in the first Q and because of the lockdowns. So it is actually a push up -- push down of the expenditure towards the current balance period and to the next year. We are not having any reaping on our major projects. But on minor projects less than INR 150 crores, we are having a relook. And some of these may be get cut. Otherwise, all the major projects are on schedule. I mean, the work on.
Okay. So can you just tell us that this -- from INR 12,500 crores to INR 8,000 crores, I mean, the delta of INR 4,500 crores was pertaining to which projects?
It is not -- we have not cut down any projects. It's just as the expenditure, which was supposed to happen in the first quarter has got pushed to the rest of the quarters and towards the next year.
We have the next question from Nitin Tiwari from Antique Stockbroking.
Sir, my question is related to the divestment process...
Sorry to interrupt, Mr. Nitin. Your voice is a little cracking, sir. Could you please adjust your mic?
Is it better now?
Yes. Please go ahead.
My question related to the divestment process. If you can just help us understand the milestones in the process and where we are. You just mentioned that like probably in next 6 months, you are looking to get divested. So what are the milestones in this process and where we are currently?
As of now, there is a public announcement by secretary DIPAM that the disinvestment is in schedule. And they are expecting to complete the whole process at financial year is closed in March 2021. The dates of expressions of interest have been extended to September 30, which was given to us from the BPCL point of view, space for us to actually ensure that the data room is ready in all respects as the expressions of interest dates are closed and investors -- like interest in seeing the data.
So the expression of interest is based on basically analysis of certain data that you've shared or that data sharing and like deep down it'll start once the expression of interest is achieved. So I was looking at more generalized information that how does it proceed? If you can just help to understand that. So expressions of interest as per them what is mix and then what is [Technical Difficulty]?
I can only tell you that some of these serious bidders have expressed the desire to have a physical inspection and also to meet the senior management. So one of the reasons why the expression of interest date is extended to September is because international flights are not allowed to fly into the country at least till end of September. So we expect a lot of interactions that can happen by the interested bidders with the senior management. And a lot of interaction, physical data room will be there, virtual data room will be there. Most of the data will be in the virtual data room, some in the physical data room. And they also need to come and see, especially talk to very senior levels of management, go to certain plants where they've invested heavily. The environmental side and all that. So to say, it is going to be a very exhaustive exercise. That's why it takes time. But then it is possible as per DIPAM to complete the whole process by end of March.
Do you feel like the entire inspection of all the data and everything would be feasible in, like, the remaining 6 months of this financial year?
I think it should be possible that's what DIPAM also has announced. Because they don't have to come and see each and every outlet and such things, right?
We have next question from Mr. Ramesh from Nirmal Bang Securities.
Can you give us the profits for Numaligarh Refinery and BORL for this quarter?
Yes. So the profit for BORL, PAT was a loss of INR 238 crores for Q1 April to June '20. For NRL, we had a profit of INR 462 crores, profit after tax for the quarter.
Okay. And the second thought is your JV share profit has come down sharply. So other than BORL any other entity contributing to this fall in your JV share in your consolidated number?
It's majorly BORL and minor amount by BPRL.
Which one is that?
Major amount is BORL and the minor contribution by BPRL.
BPRL. Bharat PetroResources?
Correct.
But that should come in the minority interest, right? I'm talking about the share of JV.
JV is only BORL.
The second thought I have is if you're looking at the longer-term strategy for retailing, do you see any potential for nonfuel retailing like in the West because we had that experiment in India, some people succeeded including BPCL. Do you think we'll go back to that kind of experiment again, and do we see that driving the earnings income over the next 5 years?
Nonfuel business, we are basically looking at the point of increasing the footfalls in outlets. It is not -- it's a very minor contribution in the total revenues. So that's how we have been seeing it.
Okay. And finally, on the exploration business, despite the huge amount of capital invested, we don't see much contribution to your segment number, if you look at the consolidated numbers. So can you give us some indication of when do you see the capital invested in the upstream subsidiary generating returns.
We have actually had a strategy of getting into exploration side, in the upstream side by investing small amounts in yet to be completely explored and assessed field like in the case of Brazil and Mozambique. And since the volume of discoveries have been substantially higher than what we expected initially, it takes a longer time for that -- the sales getting into U.S. dollar sales. So as we have already explained in the case of Mozambique, we are hopeful that the first stream of revenues will start in 2024. And Brazil also, we are expecting, so they have just completed an drill test in that Sergipe-Alagoas basin, we got substantial amounts of oil there. The extended drill test has been completed and they are expecting to go for a final investment decision by end of this -- by end of December, subject to regulatory approvals. So I think -- and Russian and UAE investments have been giving pretty good returns for us. Because these were the only 2 investments we made in the developing area. Other major investments were in the Brazil and Mozambique, which were at initial stages. Therefore, we were able to actually get them at lower cost. This is an area of our business, which requires a lot of patience. And as the size of the volume -- result is higher and size of oil is higher, it takes longer time to convert that into [ income ].
We have next question from Aditya Suresh from Macquarie.
2 questions. First is, can you give us any update on your voluntary retirement scheme, which you just floated? Any kind of update there? Second is, are you able to [ speak about ] your independent asset valuation report A, is it even completed? B, any broad range you should think about or you can share?
We have actually rolled out a VR scheme, which is -- it is a regular feature in BPCL. We had done that in 2011, 2014, '17, and this is fourth of the series. We have certain target groups to which this is aimed at. Those who have not fully qualified and especially in the non-officer category, which has become slightly redundant because of the technological upgradation that is happening across. And our response to the team have just closed, applications have been closed as of yesterday, response in line with the expectations. So it will take a few weeks for the final results to happen. But we are very hopeful that our targets have been -- will be met.The second question was about the asset valuation. As I have been repeatedly telling, this sale of government stake is handled by DIPAM and they appoint the asset valuer and we are not involved in this. And at this stage, I do not show the stage at which the asset valuation is. And therefore, I do not know a value, which they have arrived at. If at all that has reached that stage also I have no idea.
And just on this voluntary retirement scheme, are we looking at a 10% streamlining of workforce, 20%, what sort of numbers are you all expecting?
So those numbers are not in the public domain. It will come to the public domain once we close the applications and accept because there are few people that have certain criteria. So what we have done essentially is that we wanted to ensure that none of the talent available in BPCL is going out because that has been one of the criteria. And second is that we have actually targeted it, as I was mentioning at the non-officer side, especially those without much qualification and at a certain age bracket. So the number of applications that we have received is in excess of what is our management targets. It takes at least another 10 days for us to read out and ensure that the applicants meet the criteria, which is laid out, it's a transparent process. We have actually announced the criteria also to the employees. So once that process is over, we will be able to actually understand how much number is actually will be enabled to be provided as VRS and then we'll be able to come to some public announcement in this regard in the second quarter.
Next, we have a follow-up question from Vidyadhar Ginde from ICICI securities.
So I had asked earlier also what was your product inventory volume in June end.
Product inventory, MS, HSD would come to around 3 million metric tonnes.
Okay. And what was your crude throughput in July? And what's the expectation for the quarter?
Yes, I would like to correct total finished goods is 3 million metric tonnes.
Okay. Out of it, petrol, diesel will be how much, roughly?
2 million tonnes.
2 million tonnes. Okay. So if you could cite some light on your throughput for the July? And what is the expectation for the quarter?
So current inventory is around...
So we had a throughput of around 70% for the month of July, 70%, 75%. This was in line with the product we wanted to have in the market. So we took a conscious decision to curtail the throughput to around 70%. And in future, as the demand returns, the throughput would again scale up.
So are you still at 70%, 75%? Or how are you doing now?
Yes, we are at 70, 75 only because we are taking a conscious call. See the...[Technical Difficulty]
Ladies and gentlemen, kindly stay online while we connect management team back to the call. We welcome back management team to the call.
Mr. Vidyadhar, I am Vijayagopal. Again, to tell you that our throughput, there is enough flexibility and agility within BPCL. Both our refineries are capable to actually process more than 1 million tonnes a month, especially Kochi, they can go in a year to up to 70 million metric tonnes. And Mumbai and go up to 50 million metric tonnes. It is not difficult to ramp up the throughput without much billing. What we have done as a conscious call is to reduce the throughput because our attempt is to focus on the profitability. At the current levels of $0.5 crack spread for MS and about $7 to diesel or even less, it makes no offense to in this throughput and export the production which will be actually EBITDA negative. So we are watching pretty closely the demand as it increases. As we speak, now the demand has come to about 90% level, but we are sitting on a slightly higher inventory levels and the products, as Jenny was explaining. So we are watching the situation, and we are ready to change the throughput level to any level. So we are -- so throughput as such does not make much of a difference for us. We are very flexible. We are very agile. We have taken a call in the first quarter to reduce throughput by 31%. So our focus is twofold. One is to ensure that the products are available, our products are available across the country without any disruption. Secondly, our focus is on personal profit.
Okay. Sir, another thing on how are your petrol and diesel sales volumes Y-o-Y decline in July? And how are they -- have improved in early August?
August, as on date, our MS sale is 87% of previous year and HSD sale is 82%.
82. And what about your OpEx in refining in the first quarter, both refineries, if you could give us some number? And does the lower utilization have some impact there?
On dollar terms, it has increased because the throughput has decreased. But in rupee terms actually our OpEx has decreased in both the refineries.
So how much was it in dollar terms in first quarter, the OpEx?
The total OpEx, Q1 this year is MRS INR 295 crores and KRS INR 339 crores.
INR 295 crores and INR 339 crores.
It's roughly $2.
Okay. And lastly, just wanted to confirm, Numaligarh you said profit is INR 46 crores, is it? You said INR 46 crores profit, just couldn't hear.
INR 460 crores.
We have next question from Aishwarya Agarwal from Nippon India.
Sir, can I get an idea about the marketing margins on the diesel and petrol, not on the short-term, but slightly longer term, say, for 1, 1 year perspective. Because there are lots of volatility we have seen in the last couple of months. So any view will be very, very helpful?
[Technical Difficulty]Ladies and gentlemen, kindly stay online while we connect management team back to the call. We welcome management team back to the call. Please go ahead, sir.
This is Aishwarya Agarwal from Nippon India. My question was to give -- share your views on the marketing margin on the diesel and petrol because of late, we have seen lots of volatility in those numbers. And what I'm looking for is slightly longish view just for every year, what kind of margins we should anticipate? Or are we looking at the marketing margin in combination of the refining and look at on a gross level?
[Technical Difficulty] We welcome management team back to the call. Please go ahead, sir. A question from Mr. Aishwarya Agarwal from Nippon India.
My question is on petrol and diesel marketing margins. So how we should see it from the longer-term perspective. Of late, it has been extremely volatile. Any view will be very helpful.
So in the short term, it has been volatile, but over a longer term, we see it around INR 2, INR 2.5. So we expect the margins on the long-term to be around that region.
Is it in line with the previous year or lower than that?
It will be in line with the previous year numbers, not much variation.
And how -- then how you will be able to overcome the losses in the refining segment because there is a huge inventory loss as well as very weak margins.
You wait and see the results as the profits unfold.
Sorry, sir, I couldn't get.
No, we have been consistently giving a margin -- profit after tax of $1 billion over the last -- so in spite of the fluctuation, in spite of the volatility, in spite of everything. Including in the pandemic period, we have ensured and demonstrated that we are working round the clock and ensuring product availability across the country and also publishing decent profits. So have faith in us. We will ensure -- volatility is nothing new to us in this industry. Without volatility, there is no difference between Bharat Petroleum and others. So we are very confident that we will have decent profits quarter-to-quarter. We cannot get into the details of marketing margin by details because for obvious reasons, which you know and I know.
Next, we have a follow-up question from Sumeet Rohra from Smart Sun Capital.
We have some holdings in Indraprastha Gas along with Petronet and Oil India. So sir, have you basically taken any call basically before the strategic sale on either we're going to continue to own this? Or have you thought otherwise? And sir, secondly, was my follow-up question on what ma'am said, that she's very comfortable on the marketing side of the business. So, the only reason why I emphasize this is because these companies, the oil marketing companies in India are grossly undervalued. I will categorically say we are grossly undervalued because if you see the recent deals, Marathon Petroleum sold its Speedway outlets, 4,000 of them for $21 billion. And our companies are not even worth $4 billion and $12 billion at BPCL. So if we give more confidence to investors, we will actually re-rate the valuation of these companies because we are going in for strategic sale and the government of India should get its fair value because these companies are worth $20 billion, $25 billion. So if you give more clarity on the marketing side of the business, then this companies will re-rate significantly, sir. So my interest is only in the best interest of Bharat Petroleum, along with all the other oil marketing companies. So if you can please give some more confidence on marketing, we will actually get a significant better valuation for all the oil companies in India?
Yes. We appreciate your interest in oil marketing companies. We have constraints in providing data on marketing margins beyond what we have disclosed.
And sir, my question on the Indraprastha Gas and Petronet.
So actually, I would like to clarify that the government's decision is to sell Bharat Petroleum to a strategic investor as it is, excepting NRI. So that includes our investments in Indraprastha Gas and Petronet and any other joint ventures in which we have interest. They have no intention to take it out and sell separately.
We have next question from Avadhoot Sabnis from CGS-CIMB Securities.
Firstly, just a clarification. The government subsidy bill as on June '20, did I get the number right? Is this INR 4,800 crores?
INR 4,300 crores.
Okay. And that was -- it was INR 4,800 crores as on March, right?
INR 6,000-odd crores.
INR 6,000 crores in March.
Yes.
INR 6,200 crores in March.
Okay. And on the existing petchem project at Kochi, the PDP one, could you give a status on that? Because we are supposed to complete it now?
PDP, actually, the commissioning activity is going on. But this being niche petrochemicals, you need licensor support for commissioning. Their physical presence is required. So once the international flights come in, they would be in station and the activity would get complete. So that is the only pending thing.
Yes. But I mean, as of now, any guideline at all? Are you looking at, let's say, the October, December quarter or even beyond that?
As long as flights start it will be done in less than 3 months.
That would be the last question for the day. Now I hand over the floor to Mr. Bhavin Gandhi for closing comments. Over to you, sir.
Thanks, Pavitra. I would like to thank the management of BPCL and the investors for sparing time for this conference. Thank you very much.
Thank you, everyone.
Thank you. Thank you very much. Goodbye.
Thank you, sir. Ladies and gentlemen, this concludes your conference for today. Thank you for your participation and for using Door Sabha's conference call service. You may disconnect your lines now. Thank you, and have a pleasant day.