Hindustan Petroleum Corp Ltd
NSE:HINDPETRO
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Hindustan Petroleum Corp Ltd
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Thank you, Suja. Good morning, ladies and gentlemen. On behalf of Antique Stock Broking, I welcome everyone to HPCL's 3Q FY '21 Earnings Call.Today, we have the pleasure of having with us, the Chairman and MD of HPCL, Mr. Surana, Director of Finance, Mr. Kesavan; and ED Corporate Finance, Mr. Narang. I will now hand over the floor to the management for opening remarks, which shall be followed by a Q&A session. Over to you, sir.
Yes. Good morning, everyone who has joined the call. Am I audible?
Yes, sir, you are.
Okay. So very good morning to everybody, and thanks for taking time to join this call on the Q3 results of HPCL. So initially, let me make some opening comments, and then probably, I will be happy to respond to queries, which you may have or the clarification you may desire to have.So starting with the general scenario that, as you are aware, that the international oil market faced the volatility in the year 2020, broadly because of COVID-19 pandemic, which led to lockdowns worldwide and that too in the country as well, restrictions on the movement, et cetera. And there was a demand collapse because of that in the first quarter of the year. And subsequently, the relaxations were announced by various authorities and the demand picked up. The demand pickup was sharper, and V shaped as we have seen in the earlier quarter. And as a result, the demand of the petroleum products, which has collapsed to almost 50% to 60% in the first quarter came to almost 85% to 90% in the second quarter. And as far as the third quarter is concerned, it is almost equivalent to what it was in the Q3 of the last year.As far as HPCL is concerned, we, in fact, have recorded a growth in the overall petroleum product demand in the year Q3. So while industry had grown -- has recorded a growth of 0.3%, over the last year, Q3, HPCL has registered a growth of 2.7% as compared to last year's Q3. So it was quite good as far as HPCL is concerned on the demand of the product -- the petroleum products and the sales are concerned.As far as the refinery side is concerned -- or before that, with this pickup in the demand in Q3, the aggregate demand of products from April to December on an industry basis, which moved from 74% to 87% to 100%, and we do expect that in Q4, the pickup in the demand should continue. Especially because, internationally, also there is a demand pickup seen. In U.S., there is a demand pickup now. The fear of revival of Corona is receding. The multiple variants of coronavirus, which were being observed are considered less threatening. And there is now more belief that probably we have come out of the pandemic situation, even though the question continues to be there. And so we expect that the Q4 should record a growth over Q4 of last year. Whether it will offset the shortfall, which was there in Q1 and Q2, that is something which we need to watch. But my anticipation will be that Q4 may record a growth of 4% to 5% overall. And which should make us end the year with an aggregate of around 92% to 93% of the last year. But if the demand pickup is sharper than that, then we may do better, especially on HSD because there will be now the wedding season, there will be festive season and there will be more movement of the products across the border with the restrictions being lifted. And the industrial and construction sector demand pickup on the back of the extra push and impetus given by government on infrastructure. If HSD, which constitute a substantial portion of the total petroleum product demand in the country, if the demand is sharper than what had been seen in the past, and it is anticipated that the Q4 may actually record a much higher demand for diesel compared to even last year, basically, to release the pent-up demand. In that case, we may have a good going in Q4 as well.Now the main growth drivers of the demand are likely to be agricultural sectors, because of the -- back of the good monsoon. The transport sector, which may -- has started slowly increase in the demand of goods, et cetera. Tractors and 2-wheeler segment is also witnessing decent growth. Industries, handsets, mobile towers, railways, STC, these also may pick up once more and more people start coming out of the homes and the work from home, though, it is reduced, but not come out completely. The public transport still has not been made free in most of the cities. But once that starts, the metro trains work that starts and more people become more comfortable in using the public transport, there may be a pickup in HSD.LPG demand had been growth. There is an additional PMUY connection of INR 1 crore more, which is required to be given. And that may bring additional demand for LPG. But otherwise, LPG growth had been good in the year. ATF is still is short of what it should be. It is still in the range of 55% or so. And it may take some time before the people start feeling comfortable in traveling, both in domestic as well as internationally. Even though, recently, there are announcements that the airline may operate domestic passenger flights up to 80% of their pre-COVID level. But still, we think that it is not before Q1 of the next year as the ATF demand can pick up substantially.As far as refinery setup is concerned, refineries have seen the lower margins because of the lower cracks, our main product, especially petrol and diesel. Fuel oil had better frac than what we normally see. It has been as low as $2 to $3. But recently, there has been uptake on the cracks on petrol and diesel, both. Diesel had been in the range of $4 to $6 and petrol also has been moving up in $3 to $4. LPG prices also showed a pickup. That has led to the margins, the Singapore benchmark margins, which were in the range -- which has gone negative, has moved into positive territory and there is a possibility of the uptick on the refinery GRM's front.One thing I would like to mention that normally, the -- there's a difference in the Singapore margins, the way they are calculated and the margins the way they are calculated in India. The Singapore margins are calculated based on the basket of 5 products, and it does not include any fuel and loss component. While when we calculate the GRM in Indian refineries, we do include the fuel and loss component.Second, the Singapore GRM is more MS oriented. So there is a larger portion of MS which they consider. While in India, it is more portion of HSD. And because the HSD cracks were lower than MS in the recent past, that was also one of the reasons of difference in Indian refinery GRM vis-a-vis the Singapore GRM.Not only in the petrol and diesel, the demand pickup has been seen in the industrial products as well. And on bitumen, naphtha, lubricants, there was a good double-digit growth in this product. So that is a sign of industries coming back, the construction activity is coming back, and it should only go further from here.So on the refinery front, because the spread has been so low, it can only go up. That's what I would assume. And on the demand front, definitely, there is a positive sign.As far as the crude pricing is concerned, in recent times, there has been a sharp increase. Today, it is almost hovering around $59, $60. And that is, in my opinion, is fundamentally because there is a sharper increase in demand and the recovery than what many had anticipated, especially after some fear of new variants of Corona and the effectivity of vaccine. But now the vaccine program already in vogue in many countries successfully, and the fear of the new variants of coronavirus receding, there are more confidence in in the demand revival.But on the supply side, the production cuts, which some of the major producing countries had taken and which were supposed to get relaxed in January onwards, had not happened. Additionally, one of the major producing country has taken 1 million barrels per day additional voluntary production cut. And so there is a mismatch between demand and supply or at least there is a positive mismatch between demand and supply, which is making the crude prices to spike. But my take is that going forward, the producing countries also would wish to bring in additional barrels and their capacity already exists. The demand pickup is there. And so the demand supply should balance to somewhere between $50 to $60.Furthermore, the additional supply may come from the U.S. shale producers, who always pitch in when the prices are hovering above $60. That should help in keeping the prices in a range, which is more towards $50 to $60 rather than a spike. There may be momentary spike, but not a -- does not appear to be a sustained one.On India part, the exchange rate also had been a favorable component in the sense that the rupee had appreciated, and that's a good sign as far as the domestic pricing is concerned. As you are all aware, that in the domestic pricing, there is almost 70% component is taxation and around 30%, which is guided by the commodity market.Coming back to HPCL. As far as HPCL is concerned as already mentioned to you that, we recorded a very robust growth in the product sales. In domestic market, we recorded a growth of 2.7% compared to 0.3% by the industry. And we recorded a growth of almost 6.4% in petrol, 1.2% in diesel, 5.9% in LPG, 18% in bitumen and around 14.5% in naphtha. So there has been a good going as far as marketing fronts are concerned.On the refining front, we could use our refinery to 100% of the capacity utilization. I may mention that HPCL normally operates refinery at more than 100%. We had always been able to set our assets better, but even during the Corona time, we could run our refineries or rather we were the only one to run our refineries to almost over 100% capacity. So that was the case in -- on overall basis, April to December as well as in the quarter of October to December.We could also make good progress on the export front, especially on the lubricants and the value-added lubricants, which had been good as far as the profitability part is concerned.On the financial front, you are well aware of the results which were declared yesterday that HPCL recorded almost 3x growth in the profit after tax compared to last year on the quarter, and almost 193% growth in the profit when you consider the 9 months. So the profit for the quarter was INR 2,355 crore versus INR 747 crore last year, and the 9-month profit was INR 7,646 crore versus INR 2,610 crore INR in the last year 9 months. Incidentally, this is the highest profit which HPCL has recorded. Even if you consider the full year profit, the last best profit, I think, we had was INR 6,326 crore or so. So to that extent, I think that it's been a strong financial performance.Refining margins had been low, which I mentioned to you, and which has reflected in the GRM part. The strong profitability performance has been mainly because of the good marketing performance as far as sales is concerned, as far as market share gain is concerned, as far as product growth is concerned. 100% utilization of the refinery setup. Some good calls as far as the inventory management, the crude scheduling and the product placements are concerned. And the important part is a good saving in operating costs during this period, new learnings.So just to give you an indication that we had been able to save almost around INR 400-odd crore in our operating costs during this period. And that was predominantly because of lower administrative costs and the lower secondary transportation costs, which is also helped by commissioning of 2 new pipelines, one from Uran to Chakan and one from Palanpur to Aroza and setting up some new LPG plants, et cetera, which has brought the the location -- supply location nearer to the consumer place saving in the secondary transportation costs and also additional LPG rates, which you may be knowing, that earlier, we said that LPG have their own rates for transportation of LPG, which leads to the saving in the cost. And also saving in the interest cost because of some good mix of foreign and domestic borrowing. And thanks to good credit worthiness of the company, where we had been able to command very competitive rates. And a good internal resource generation to ensure that in spite of the CapEx, we had been able to manage our borrowings within reasonable levels to have debt-to-equity ratio, continue to maintain below 1.And also the subsidies, reimbursement, et cetera, which we get from the government, there was a good move on that, where we have been receiving at a periodic level, the money which we are supposed to get from the government.On the expansion front, in this year, we have commissioned so far already 1,543 new retail outlets, taking our total retail network to 18,019. We have commissioned 77 new LPG dealerships to take our LPG dealership to 6,160. This figure, I'm telling as of January. We have commissioned additional new 170 -- on new -- on 170 retail outlets we have commissioned CNG dispensing facility. So now we are able to dispense CNG at 650 outlets, and we are adding more to that. We also added some mobile dispenser, which can do door-to-door delivery of diesel and 205 such dispensers have been added in various cities, and they are predominantly used for supplying diesel to the stationary equipment or like cranes and diesel sets and the lifting, shifting equipment, et cetera.And we also commissioned the EV charging facility on around 51 outlets by now. We have got plans to commission around 2,000 retail outlets in this year and almost the same number in the next year as well.As far as CapEx is concerned, we have got a plan of around INR 12,000 crores in this year. And we've already done INR 8,800 crore by January on this. And projects wise we have been moving very quickly. The stoppages of work which came in the month of April, we very quickly revived it back. And as of now, around 45,000 workers are at our various construction sites and all the construction sites are going on in full swing. We expect to complete the Mumbai refinery expansion project in this calendar year. And Vizag refinery expansion project, all the units except the bottom upgradation also will be completed in this calendar year. Bottom upgradation unit will be completed in the next year, that is 2022 calendar and Rajasthan refinery in 2023 calendar. So that's the road map as far as the completion of the projects are concerned.In fact, now we have got a very clear visibility of completion of all our major projects. Our HMEL petrochemical complex is also likely to be completed in this calendar year itself. And by 2022, even Vijayawada Dharmapuri pipeline, Palanpur Barmer Pipeline and Hassan Cherlapally LPG pipeline. This also will be getting completed.So this year, we will see Mumbai refinery and Vizag refinery commissioning of the units. And so that brings phase where we will be moving from construction to commissioning phase of these units, which will bring additional throughput, additional product line, additional energy efficiency and a better margin based on the size, the technology and the newer type of units we'll be putting. In the meantime, we'll also be completing our Chhara LNG terminal. And the CGD there, I mentioned earlier, we have an operation for 20 geographical areas. The work on the new geographical areas, which we were allocated in the tenth round of bidding, also is moving at a good place in the states of UP, West Bengal, Haryana and we already started commissioning CNG stations and PNG facilities in these newer cities. Along with the earlier authorized areas where there is a push to increase the gas users as such.So I think this is a commentary on the general outlook of the company and the situation, and I'll be happy to take further questions if you have. Thank you.
[Operator Instructions]
In the meantime, I can probably also mention that our buyback program is proceeding. And as of February 3, we have already bought back 4.07 crore shares at a total value of around INR 885 crores. So that is around 35% of the intended buyback program. So that is -- and that is still continuing because we have gone through a market transaction. And I'm also happy to share that HPCL was awarded the Oil Marketing Company of the Year award by FIPI. And a good news is that in the last 5 years, 4 years, HPCL has got that award, recognizing that we have got a strong marketing setup.
The first question is from the line of Sanjay Parekh from Nippon India Mutual Fund.
Yes. Sir, can you hear me, sir?
Yes, please go ahead.
Sir, 1 is you did explain in terms of the gas CNG in our petrol pumps that will install and also the EV charging stations. And so I just wanted to ask you that over 3 to 5 years, considering that gas also we have a huge emphasis. And over a longer period, EV will also become important. So what is the plan for rolling up and increasing the coverage there? And when -- I mean, in terms of payback or returns, how do you see that? That's the first question, sir.The second question is, sir, in terms of the expansion of volume, I missed because both these expansion projects are going on stream. Where do we see the refining volume in the next 2 years? That's the second question.Third is, sir, the pipeline, recently government said that the monetization of pipeline can be -- can happen through the InvIT route. Do you think there is a scope where we can partially monetize. And would it be -- I mean, do you think it would be -- can it be done or should it be done? That's the third question. And also, if you can give us the CapEx plan for the next 2 to 3 years, that will happen. And last, I just want to congratulate you, really for this buyback and enthusing the confidence of the existing shareholders.
So thank you, Mr. Parekh. I think there are a number of questions which are rolled up. So I'll try to reply one by one. If I must miss something, you can probably point it out to me. So just to ensure that I captured the question correctly. One was regarding the CapEx. One was regarding the gas NAV business. One was regarding the refinery capacity and one was regarding the monetization of the pipelines. Am I right?
Yes, sir.
These are the 4 questions. Okay. So as far as refining is concerned, our Mumbai refinery will become 9.5 million. Right now, it is 7.5 million. And Vizag is supposed to go to 15 million. So without ROF, being commissioned also, we should be able to commission other units to take the refinery capacity of Vizag to 14 million tonnes. So we see, in this year, by the end of this calendar year, this 2 million tonne of Mumbai refinery capacity and around 5.5 million to 6 million tonne additional capacity in Vizag coming up. Now as far as Mumbai is concerned, we will be commissioning it in the first quarter of this year. We should have the benefit of the additional capacity in the next 3 quarters. As far as Vizag is concerned, we will be starting commissioning somewhere in the third quarter. So we'll have the benefit of that in the fourth quarter.Now as you know, the refinery units commissioning, it may have a little bit of ramp-up time, but we definitely see that the total refinery throughput of the year '21, '22 will be more than the previous throughput, considering even the shutdowns, which will be taking in Mumbai for the revamp and the commissioning and the normal turnaround, which we take once in 4 years. And the hooking up of the Vizag refinery facility even without rough.Now because there will be a hydrocracker coming in in Vizag. There will be a 9 million tonne CDU coming in Vizag. And in Mumbai also, some of the multiple VDUs, we will be replacing by a single VDU. It should also bring the energy efficiency and the operating efficiency in this, we should help in complexity and the margins. The next year, we'll have the bottom upgradation units, which will be completing. You might have heard recently in the news that the heaviest LC-MAX reactor in the world, which is required for this rough unit, our bottom upgradation unit has already been dispatched from Hazira last week. In fact, I was there to see it off. That is one of the most critical equipment as far as this is concerned.So we should be starting completion of bottom upgradation unit in the second quarter of the next year. And so that will bring a substantial margin improvement on the full increased capacity of 15 million tonnes. So additional 1 million tonne capacity should accrue in the next year. And a substantial margin improvement because the bottoms will get converted to distillates.Now incidentally, presently, because fuel oil cracks are better and the diesel cracks are lower, so we are not substantially impacted by this phasing of these 2 units. And it also helps us to commission the units sequentially because one thing is the intermediate stream sequence. At the same time, when you are commissioning multiple units simultaneously, it is always good to phase out this without getting impacted of it.So we assume that the HPCL refining capacity, which is 15.8 right now, will become 24.5. And we have got HMEL capacity which is 11.3. So we will have 35.8 million tonnes of refining capacity by the end of the next year.In 2023, we will be adding 9 million tonnes of Rajasthan refinery. So that should bring us to around 44, 45 million tonnes of refining capacity, overall, compared to around 40 million tonne of products, which we are selling right now. And by the time it gets commissioned, our marketing will be more than 45 million tonnes. So we will still be always be behind the marketing capacity. And not to say that when we say 45 million tonne of refining capacity, out of that, Rajasthan around 2.2 million tonne is petrochemical. And there will be normally fueling loss. So actual product, when you say 45 million tonne capacity, actually, you'll be having the products of 40 million tonnes or so. And so we will always be -- in our refining capacity, we'll have a gap of around 5 to 7 million tonnes as far as the marketing setup is concerned.Now it brings additional around 2.2 million tonnes of petrochemicals in our system from Rajasthan. And this year, we'll also be completing HMEL petrochemical complex, which will bring another 1.7 million metric tonnes of petrochemicals. So we'll have substantial petrochemical presence after these 2 projects are coming in.I may mention that Rajasthan refinery will have around 25% of petrochemical intensity, which is one of the highest in the country or even considering a refinery in petrochemical integrated complex. And that complex will be coming with the petrochemical right from start, unlike the other refineries where the refineries were commissioned first and then the petrochemical. So it will have the more efficient use of stream disposals and better energy efficiency. And it may have one of the very high complexity factor of around more than in 70 or so. So that is one good part. And these projects will also add to the intensity factor of both of our existing refineries, and both the refineries will have the complexity factor in double digits. So this is as far as the refinery is concerned.As far as gas is concerned, so right now, our portfolio of gas is, it include a 5 million metric tonne of LNG terminal -- LNG gasification terminal. We already have 20 geographical areas in 9 states as far as CGD authorization is concerned. We will have the facility to dispense CNG for almost -- most of our outlet subject to the space and the safety part of it. But otherwise, we'll have the possibility of putting up the CNG facility at most of outlets, which is 18,000 right now. And we'll be adding another 2,000 next year, so we'll have around 20,000 outlets. We are also a part of 2 cross country pipelines where we've got 11% stake for transportation. And so we can assume that we will have a portfolio of around 5 million metric tonnes of LNG in the system, which will almost be a 10% of our marketing volumes.Now parallel to that, in the new edge thing, there is another component is ethanol, where we -- I think you may be knowing that the HPCL is the only company who has got the ethanol producing facilities. And that is a 1G ethanol. And where we produce ethanol, which is used for blending with petrol. And we also issued recently around 100 and odd LOIs for converting the biogas, production of biogas by the private entrepreneurs, where we got an offtake arrangement in various cities. That is good for the environment, that is good for us because the CBG is not a part of the PNGRB authorization. And we have got assured offtake of CBG on that.Additionally, recently, government also announced the production of ethanol from the surplus food drain and the damaged food drain. And HPCL will also be setting up some plants, which has got a good returns also and the cost of the plants is not much high. In addition to one plant for 2G ethanol from the agri waste, which we are trying to set up in Bhatinda.So as far as EV is concerned, presently, we have got EV charging facilities at 51 stations. We can -- we have got some memorandum understating from some of the collaborators on that. We have got the facility for both swapping as well as charging. And we also pioneered some of the things with some start-ups where they have came out with a special type of vehicles, which are -- as part of it is used by us also, for example, one of the start-up which we were working had devised LPG delivery autos, which are electric driven. And especially made with the setup, which is ideally suited for LPG cylinder deliveries. So we are -- we also got some working with some of the startups. In fact, we are working with around 25 start-ups on various things, which includes the product, which includes the IT facilities, et cetera. And we will be working with -- on this more depending on -- as the the demand develops and the popularity of the vehicles comes into picture.As far as CapEx is concerned, we have a plan of spending INR 12,000 crore in this year and maybe around INR 14,000 crores next year. And as I mentioned to you that, out of that, INR 8,000 crore, we already spent -- INR 8,800 crores, we already spent by January of this year CapEx. And this will also be bringing some of the projects online now. And depending on the threshold IRR and the profitability, we resized future projects. And so the current lot of projects will be now slowly tapering and their expenditures because they're becoming more and more to completion. And after the completion of this bottom upgradation of the Rajasthan refinery project out of the current projects we will be running, which is our separate joint venture company. And if there are new projects, which we'll be looking at it, and then that will be coming in to picture.As far as monetization of pipelines is concerned, HPCL has got around 3,700 kilometers of pipeline in operation as of today. And we are also constructing another 1,600 kilometer of pipeline. Now most of our pipelines are some way have got connectivity to our refinery. So they are -- they get used for refinery vacation in the most safe, environment-friendly and the economic cost-effective manner. And they are the important part of our operations. Also, all these pipelines have been operating very efficiently. And on Solomon benchmarking index, our refinery in many parameters comes under quartile 1. Now -- pipelines, yes. Pipelines I'm talking about. Now we'll always see that if there will be better value can be created, and there are options, we can -- we will always review that. But because announcement has just been made. It is early to comment. We need to evaluate the total thing. And unlike a facility like, let's say, a port or a road where the person who creates the facility, he doesn't use it for future. But in our case, we will also be using the pipeline. So we need to evaluate that part as far as the money, which we generate by monetizing versus the operating costs, which we incur in future for use of those pipelines and et cetera, and the taxation angles. And so that -- it needs some work to to review various options. And we will see that whether it creates better value than what it is right now by any other options, and then we can always look at that option. It is a strength of HPCL. There is no doubt about it. We won a second largest cross country pipeline network for products. And we will definitely review it what is the better value creation for that. I think, does it answer your question, Sanjay?
[Operator Instructions] The next question is from the line of Aishwarya Agarwal from Nippon India.
Sir, just a follow-on on the previous question. Just for INR 14,000 crores of the CapEx next year. So what is the allocation of that INR 14,000 crores among the major projects?And the second is Rajasthan refinery. So that CapEx of Rajasthan refinery is part of this INR 14,000 crores or that will be separate? And plus, is there any further CapEx in the HMEL? That is it, sir.
So as far as the INR 14,000 crores CapEx is concerned, it includes the equity contribution, which we need from HPCL for Rajasthan refinery. So that's first part of it. The Rajasthan refinery, the debt component will be on the Rajasthan refinery balance sheet, but equity components, which need to go from HPCL is a part of this INR 14,000 crore. That's number one.As far as the overall broader CapEx plan is concerned. So in this will be around INR 5,000 crores for marketing and around INR 5,500 crores for refinery and R&D. And balance for the -- our JV season subsidiaries. That will be the broader classification. And it will include the -- our CGD, et cetera, around INR 2,000 crores in the network outflow will be the pick up. As far as the -- what was the third question? These are the 2, I think. As far as HMEL is concerned, there is no contribution, which is required from our side right now. The company is able to generate its own resources and debt. So right now, we are not contributing any further equity for any of their CapEx. And after completion of this petrochemical project, right now, apart from the normal running CapEx, we are not in the size in new project for them, right?
Sure, sir. That is very helpful. Just 1 more question in this, that this Rajasthan refinery, so what is the approx project cost and how much equity contribution we will be doing and how long it will flow through? I mean how many years this CapEx will continue?
So we are planning to complete the refinery by 2023. And we own 74% in that, and debt-to-equity ratio is 2:1. So that's the broader...
Sure. And sir, the project -- total project cost and how the amount will flow through over the period of projects here from now onto '23?
So the total project cost, which was approved was INR 43,000 crore, which was based on a February 2017 base. So normally in these projects when we have placed all the orders and all, we will take one update of the cost, based on the -- after having all the placed orders. And so as of now, the upward cost is INR 43,000 crore. So in that, the equity component was INR 10,000 crores. And out of that INR 10,000 crores, I think, INR 4,000 crores we already contributed to this equity for that is where it is. And phasing wise, as of today, we have placed the order of around INR 35,000 crore on that project, and we have made an expenditure of around total INR 6,000 crores or so.And normally, the way the curve goes, that it will be around 35% next year and then next to next year.
The next question is from the line of Probal Sen from Centrum Broking.
2 questions. One, with respect to the Rajasthan refinery. Any clarity you can give us in terms of the crude mix that will be used? And this is a broader question on the refining space. You're obviously in the midst of a material expansion and upgradation of all of your refineries. But looking at the way the refining cycle is, what sort of improvement do you actually need in major product spreads for any -- for these expansions to actually start making money? I mean I know that you look at it from a decade perspective. And obviously, this might be short term. But any idea that for, let's say, diesel spreads or gasoline spreads, what sort of levels do they need to come back for these refineries to start making money and start justifying the investment on all of these? Those were the 2 parts, and I have 1 more question, sir, which I can maybe ask later.
So first part is the crude mix of Rajasthan refinery. We have designed the refinery in such a way that we can use around 2.5 million tonnes of Rajasthan crude and rest the imported crude or if required, we can use full 9 million tonne also imported crude. So there is a possibility of using multiple crude, which Rajasthan -- could -- because it is a very, very heavy type of crude. We have designed to use around 2.5 million tonnes. And this way, we ensure that there is more redundancy in the CapEx because to process Rajasthan crude, we need certain type of units and to process other type of crude, we may need certain other things. So you can -- we designed such a way that we can use Rajasthan crude to certain extent without having any capital redundancy on that. So that's one part of it. The second part, as far as the refinery total outlook is concerned. The refinery space in last few -- last, let's say, last year has been low, and it can only go up. So -- if I may say so, there could not have been better time to complete this refinery expansion project and come in a time when the refinery set up will start -- refinery margin will start looking up. So this may be a bit of incidental, but as far as HPCL is concerned, it could not have been better time for us to do these projects when the borrowing cost was low, when the margins are low to take this revamp, et cetera, and pitch at a time when the margins are started looking up. And on the back of a capital cost being low. That's one part. Second part is that the -- all said and done, the -- it may -- a broader control maybe that the fossil fuel has got an issue or something like that. But the fact remains that in a country like India, the demand of the fossil fuel will continue to be there for at least a decade or more. And as I mentioned earlier, that as far as HPCL is concerned, even if there is no growth, 0 growth for next 10 years, then also we will be short of the refining capacity even after expansion. So to that extent, we are well placed. But the third part of it is that this new expansion and the refinery at Rajasthan brings in another portfolio of petrochemical to us. So we'll have a petrochemical portfolio of around 5 million tonnes, along with our joint venture refinery of HMEL and us. And if tomorrow if MRPL also is getting integrated with us, we will be -- it will have substantial say in the petrochemical market.In addition to that, what we have done is, as you know, we have evolved in our refinery setup from a small capacity to bigger capacity through various expansion and debottlenecking. But in this expansion, what we have done is some of the lower size units, we have replaced by bigger sized units. So like in Mumbai refinery, we replaced 2 vacuum units and brought only 1 vacuum unit. So now that we have 3, and we'll have only 1 now. In Vizag, we had the smaller capacity CDUs, and we'll be bringing a full 9 million tonne CDU and we'll had -- bottom upgradation. So while on one hand, we are expanding the capacity, that is on the back of a substantial improvement in the value-added products, like in Vizag with the bottom upgradation in need, we have almost 0 fuel oil production. And we may convert everything to distillates, and we will not be producing petcoke either, which may have some environmental concerns.So I think, in my opinion, all this expansion projects, which we have taken, have a well calibrated outlook. And as far as HPCL is concerned, that becomes a good growth driver in the time to come and the projects are about to be commissioned. Now in a broader perspective of refining, refining cycle always has been going through a cyclical mode, and that happens because of when the margins are good, people start thinking of setting up the refineries. And by the time the refineries come, there are always with the plan to have additional capacities. So when the refinery gets commissioned, you have surplus capacity, which leads to reduction in the margins. But because it takes 5 years for the refineries to come, there is a time in between where you got a supply demand deficit. So you go through a cycle of surplus demand then the surplus capacity and balancing in steps. And so the refinery margin goes through a cyclical up downs. And with now the new trend being integration of petrochemicals and refineries, this cycle will get more flatter because the petrochemical demands will continue to be there. And more -- even though you may have some of the alternative fuels coming into picture, but the newer product splits may have a continuous demand.As far as HPCL is concerned, even on the traditional products, we have been shifting towards more value-added products. So you might have heard that the mineral oil, we launched in the packed mode, otherwise, we were supplying only in bulk mode earlier. Then the lubes where we used to have a large manufacturing facility. We are the biggest producer of lube base oils. We also used to supply base oil to our competitors. And in addition to value-added products, but we had been focusing -- converting most of our base oils to now the valuated products. And maybe after consuming and saturating the Indian requirement, we have looked abroad, and we are supplying lubes to 14 countries right now. The last year, and in this 9 months also, we had been the biggest exporter of the lubricants among the OMCs. We have exported around 11,500 tonne of lubricants in these 9 months, in addition to around 20,000 tonnes of other industrial products. And I'm not talking of the products, which are required to be exported just because of nondisposal like fuel oil or naphtha, but I'm talking about the value-added products.So we think that refinery margins can only go up from here. And our expansion projects are well priced and it brings us additional product split, better efficiency, better energy efficiency and better distillate yields. And I think we should be able to generate resources and money out of that.
One small question, if I may. With respect to the gas business, the Chhara terminal that you mentioned. If you can please refresh us in terms of, you are looking at completion of the terminal by CY '22. I mean, if I'm not mistaken. And what is the status of optic contracts for the same? Is it going to be all internally consumed? Or do we -- are we looking to sell it to third party business? That's the last question.
So we are looking for completion of that LNG terminal in '22, end maybe, may not be Q1, I think. You mentioned Q1?
No, no. I said CY '22 is when we are looking to complete it, right?
We are looking for CY '22, yes. We are looking maybe the last quarter of '22, that is what I think will be more realistic. As far as the offtake is concerned, yes, HPCL itself has got a big portfolio of -- will be here a big portfolio of gas. And apart from our own captive consumption in all our refineries. So right now, we have not really seriously looked at the arrangement with others also because we predominantly set up for our own consumption, but we can look into it. It is all ultimately a business. So -- which makes a better sense. We may have sub contracts, we may have the collaborative efforts. We may have our self consumption. All combinations are possible. Because we have got the consumption centers in different parts of the country. And we may always have some sort of arrangements where we give it at one place and take it with some other place from that.
So what I understand is that we don't really need to have of that for third parties, for the terminals liability, you have enough demand, internally, at both your downstream facilities and your new cash consumption due to CGD plan.
No, there are different elements to what you are saying. One thing is whether we need or not need is one part of it. Second thing is there is a gas business. There is an LNG gasification business. The higher also can be seen separately to give better value overall.
[Operator Instructions] The next question is from the line of Anubhav Aggarwal from Crédit Suisse.
A couple of questions. One is, you mentioned currently 650 outlets, out of 18,000 you're supplying CNG. Let's say, in the best case, when almost, let's say, 100% integration happens, what kind of EBITDA can be added to HPCL once that happens?
So right now, we are not declaring the stream wise EBITDA, so it won't be possible for me to tell you that path. But I can safely say that there are 2 elements to CNG business, rather 3 elements to CNG business. One thing is the gasification. Second is the the supply of CNG from our outlet where we are not the CGD entity. And third part of it is we supply in the area where we ourselves are the CNG entity -- CGD entity. And we have got the combination of all the 3 available to us. And so there are different value accretion which happens on all the 3 elements. The maximum happens when you are the CGD entity and outlet is also yours. So in 20 geographical areas, as I mentioned to you, we will be the CGD entity. We'll have our outlets also. And in addition, we can also supply it from the outlets of somebody else.Now the profit distribution between a CGD entity and the outlet is a matter of negotiation between the 2. And that may have the variant over a period of time. But CGD is a good and upcoming business, and we'll have a reasonable contribution from this business in our future business.
Sir, I was just checking that, let's see, even if you don't negotiate higher rates, even the existing rate, which is dealer margin of INR 3 to INR 4. if we were to just extend the volumes on the second part, which you mentioned, where you're not the CGD entity, you were using the outlets for others. What kind of rough number it can. Can it be, let's say, INR 1,500 crores to INR 2,500 crores EBITDA. Just as a ballpark, once, let's say, 100% integration happens? So this is the second part of the business.
See, it will also depend on what is the conversion rate of the vehicles to CNG. So we have got one advantage that either it will be -- we'll be selling petrol diesel or we'll be selling gas. So either way, the business will be ours. Now the margins may be different on the two. So that is one important part of it.So as far as the second part is concerned, which is the end consumer part of it is concerned, we'll have a margin either way, whether we sell gas or we sell the liquid products. If that gives some direction to you?
That helps. Second question was on significant ramp-up in our retail outlet addition. Now almost, we are adding 3x to 4x of what we use to have. A couple of questions there. One, what is the difference in throughput between when you have a retail outlet, which is in rural India versus non-rural? Is it like 2x difference? Or how is it like rural is half of urban? Or can you give some idea there?
So you can't generalize that way. You may have an outlet even in the second-rung city, not rural, but second-rung city, which may do very well. For example, I will tell you, a simple case, the biggest selling petrol outlet in the country is HPCL outlet in Visakhapatnam. It is not in Mumbai, Delhi in the country, whole country I'm saying all industry put together. The biggest, largest petrol selling outlet belongs to HPCL, and that is in Visakhapatnam. And a largest diesel selling outlet, I think, is in Gurgaon, right? Gurgaon. So the question, it depends on the traffic density in that area and the other outlets availability in that area. That's one part. But having said that, you can say that the rural outlet will be more in the range of 100 kl, while urban outlet will be more in the range of 200-plus 200, 250-plus. But in this range, you can have an outlet even touching 500, 600 or even 1,000, and you may have an outlet, which may also be in the range of 60 to 100. But normally, when we set up an outlet, different companies may have different thinking. But as far as we are concerned, we don't -- we target an outlet to have an average size of 100 kl throughput. Because -- but the second part is the size, the land and the investment, which we do on the outlet also is in line with what business it will generate. So a larger outlet, which is selling more, we may have a larger area, larger facility, additional facilities and the different -- we have got a variety of outlets like Club HP, Club HP Star, Apna Ghar, et cetera. So depending on that, you might have seen the look and feel. We have got different formats available, and that decides.Now having said that, in the current time, we have seen that the rural outlet and the second-rung cities are also coming up very quickly in terms of requirements. And the urban cities because of the land, et cetera, they are getting saturated. So there is substantial business, it is generating from the rural and the second-rung cities. And during Corona time, in fact, the restrictions were more in urban cities. So volume percentage was more in the rural sector.
That helps. Just 1 last clarity on this. So ROIC on this incremental when you ramped up the significant addition on the retail outlet. ROIC, incremental ROIC is still largely similar to what we are making here?
So we've got a threshold limit, which we set up and -- we have got a software to decide that whether it is worth putting an outlet or not, number one. We take this into consideration, the traffic density, the GDP, the local per capita income, the competitors outlets available, et cetera. The location advantage. And based on that, we decided that more volume and what potential it generates and then we have got an investment policy that we invest only in certain minimum amount we are -- generation is there. And third parties, now we've got 2 thing. One is a dealer-owned outlet and the company-owned outlet. In dealer-owned outlet, the money is put by the dealer. So there, ours is only to the extent of the dispensing pump and the tankages. And for that, also, there is certain money which the dealer is supposed to pay. So as far as ROIC is concerned, 2 parts with the increased demand of the fuel, the ROIC increases. Because from the same facility, you dispense more. And so it goes through a cycle in the initial -- when you set up a petrol pump, there will be lesser throughput and as it establishes, it goes further. So the ROIC on an outlet increases over a period of time.
The next question is from the line of Aditya Suresh from Macquarie Group.
2 questions. So first is, can you elaborate a bit on your lubricant export business? It's clear that, that seems to be an area of focus for you, but can you give us a few numbers, your contribution today or what your targets are for that business? And the second is more from a risk perspective. So petrol oil prices and diesel prices are high today. In a scenario of crude were to say, move up further from here. Do you have much confidence in the government rolling back excise duties? Or do you think you see inflationary rates to the customer?
So as far as the lube export business is concerned, yes, it is a focus area without any doubt. And that's why we have set up a subsidiary company in Dubai, I think I mentioned in the FZCO area. And that has started functioning. And we have got the registration of all our brands in that area of Middle East, et cetera. We have also made certain arrangement for coal blending in that area, which we can do. Right now, we are supplying lubricants to 14 countries, and we've got a plan to increase it further. In 9 months, we had exported around 11,500 tonnes. The last year, we exported around 16,000 tonnes. And that business is growing, and it is being received well in the market. And we have also gone to the countries where no other Indian brand of the lubricants are there, like Myanmar, and Vietnam and all that. So we are focusing on that area, and we consider that, that can be a good potential business.Now having said that, we can also leverage it to some other additional products, which we had been exporting and there are value-added products. And we can also make certain variant of the products, which we may, which include the solvents and the -- solvents, RPO, MTO, et cetera. SPO.So there are various -- in fact, Vizag has got a facility to even export bitumen. I think we may be the only refinery, which has got a line to jetty for bitumen in Visakhapatnam. And we have transported bitumen by tanker, within the country, of course, not outside. But we can do that. And we have supplied bitumen also to other countries in the nearby countries like Nepal et cetera. So because I mentioned that we do not give the stream wise or the business-wise EBITDA break up, but I can safely say that lubricant is one of the important contributor to our business line. And unlike the fear, which many people have, that it is fully dominated by MS HSD, the profitability has got a reasonable component of the product and the lines of business, which is other than MS HSD, in which lubricants and the direct sales are the industrial and consumer business has got an important contribution.So this was one question, which was the other question. This was your question? Does it answer you?
Yes, sir, it does. So maybe just one item, if I can get a clarification, is that, in terms of what you're selling in the overseas market for lubricants, I understand that, that sales is a order of magnitude higher in terms of margin compared to, say, your MS HSD. Any thoughts on that if you're making, say, INR 2.50, INR 3 on petrol and diesel. What type of equivalent margin would you be making on lubricants?
Lube is a competitive market, and there are 2 components. One is IP right at the formulation. And second is the marketing strategy in selling. So you've got variant up the product, which is high premium segment. There are low premium segment. There is a -- the bulk volume. There are lubricants, which are related to trucks and shellers and the premium vehicles, et cetera. So you can generalize that way. But I can say that, at least, the EBITDA contribution wise, the lubricant does contribute around 10% to 15% of our profitability.
The next question is from the line of Avdhut Sabnis from InCred Capital.
Just some housekeeping questions. Firstly, in terms of the interest expense, what was -- how much was the ForEx element in the third quarter and the 9 months? And how much will interest capitalize for the first 9 months. That's the first question. Second is if you could give the government subsidy views as on December 2020? And lastly, if you could give some exclusion of the sharp jump in staff costs in the second quarter. How much was the -- if there was any nonrecurring items in that?
As far as subsidy is concerned, I think as of March, we had an outstanding of around INR 8,000 crores, and it has come down to around INR 4,000 crores. So in that something new get added, something passed. So as of today, the net outstanding is only INR 4,000 crores, which was around INR 8,000 crores as of March 31. And it has been coming down continuously. And off late the subsidy element had been very, very small because both on kerosene and LPG, there was hardly any subsidy element.Now as far as the interest cost is concerned, the total interest cost in this quarter was around INR 127 crore. And in the 9 months was around INR 709 crore. And if I compare the previous 9 months and the quarter. So this quarter, interest cost is INR 127 crore versus INR 252 crore last year. And in this 9 months, the interest cost is INR 709 crore versus INR 744 crore last year. And the total debt element as of now is around INR 30,600 crores, which was around INR 40,000 crores as of March. Of course, there was a -- in the margin, there will be some element of short-term borrowing also. So overall, the debt management is okay. Now out of that, the distribution between foreign component and local component, I can give you -- while do you have readymade available with you?
Forex gain, do you mean how much is foreign debt and...
Okay, foreign exchange gain. Okay. Okay. I'm sorry then. So foreign exchange gain was INR 297 crore in this quarter, vis-a-vis INR 82 crores last year. And in the 9 months, we have got a foreign exchange gain of INR 870 crore versus INR 101 crore last year.
This is whatever included in the interest cost. I'm asking what is included in interest cost? I just meant for ForEx in the interest cost.
INR 60 crores.
INR 60 crores in the third quarter?
April to December.
April to December, INR 60 crores is the ForEx gain included in interest cost?
Yes.
And sir, what was the interest capitalized in the first 9 months?
Around INR 500 crores.
Okay,. And sir, lastly, on the -- if you could give any expansion on the staff cost in second quarter? Staff cost. If we move from INR 8,800 crores plus to INR 1,000 crores in the -- in just the second quarter.
So manpower cost in the third quarter would be -- is around INR 884 crore. So -- is INR 884 crores for the quarter, October to December.
No, that's not what I'm saying. Is the second quarter, which is the July to September quarter, it was over INR 1,000 crores, INR 1,005 crores. So I just -- and obviously, that's out of trend compared to the INR 800 crores kind of number in the earlier quarter. So I think...
No, no. That is because, see, the -- we've got a variable component of the cost which gets decided by the performance of the company. So in the second quarter, there is an element of the profitability-linked incentive, which we pay to the employees, which was accounted in the second quarter. But if you compare, let's say, last year, the same quarter versus this year, the same quarter? The increase in the manpower cost is INR 116 crores. So that includes the increase in the salaries, additional manpower, et cetera. But I may mention one thing that as far as operating expense is concerned, there is a -- other than manpower cost, there is a reduction of around INR 400 crores in this year compared to last year.
The next question is from the line of Chinmay Gandre from Bharti AXA Life.
Sir, can you give us some visibility -- or some information in terms of the marketing margins you guys have made in terms of other products, which are like lube, FO, like which is in naphtha. Are the marketing margins trending, or say, on a Y-o-Y or a sequential group basis in these kind of products?
So I think I answered the question that we don't give the marketing -- product-wise marketing margin. I wouldn't be able to answer that question to you, right now.
Sir, not maybe in terms of absolute margin or exact details, but at least as a trend, are they like flattish or declining or improving on a Y-o-Y or sequential bases.
The marketing margin are stable, they are not declining. Let me tell you this, okay? So we had been able to cover the marketing margin, to the extent it is reasonable required by the oil marketing companies to cover their costs and sustain the business. And to that extent, we have been able to align the prices, including the reasonable margin and the international prices and the exchange rate.
Okay. And so no particular category that had a kind of lower margins during the quarter, right? I mean, I'm talking exal and diesel in total.
So the question is that as far as the control commodity is only LPG and kerosine right now. As far as MS and HSD is concerned, there is certain formula on which basis we derive at the margin. And that is what is supposed to be recovered in the prices. So it is not the choice of the oil marketing companies that you can charge anything, okay? That is one part. As far as other products are concerned, there are 3 pricing products and they are competitive products, which companies have got a strategy for the trade and companies have got a strategy for the industrial trade, which are on the competitive bidding basis. So there are different margins and the strategies, and that may vary from market to market as well. So as a company, what we see is whether the overall -- how it works out for us. And there are different segments, which works differently. For example, the diesel for -- let's say, STC, this State Trading Corporation, State Transport Corporation is different. The diesel for the industrial sector is different. They are more on a competitive basis. They are bid and you have to win a competitive tender. While the petrol and diesel retail sector, we have got a formula-based pricing, which more or less all the companies follow for deriving at the consumer costs, deriving from the international prices.As for lubricants are concerned, there are different segments. One is a [ Baja ] trade, one is the industrial trade, one is the automotive trade and one is OEM business.So different markets have got different -- and one is the base oil sell itself. So different type of the product and categories, we have got a different way of pricing the products. And it also depends on who are the competitive -- what are the competitive prices in that. But I can tell you, in the automotive, grease and this sector, we did very well in terms of volume, in terms of growth.
The next question is from the line of Pinakin from JPMorgan.
Sir, my question pertains to the Rajasthan refinery. Now as you highlighted, at the time of the Board approval in 2017, it was a INR 43,000 crore project. So it's fair to assume that there would be some cost increases. And while the company is targeting the 2023 completion, given that it takes some time for full ramp-up. By the time the refinery is fully ramped up, it could be 2024 or even '25. Now sir, the question that we are getting from investors is that we have a situation where the government of India seems to be clearly disincentivizing refined product consumption, given, A, the very high degree of taxation, we have with diesel on petrol, versus gas. So longer term, the demand outlook remains unclear as to how the government wants to see it. Second, given that HPCL will own a 74% stake, there will be a INR 30,000 crore debt on the refinery, which will be consolidated on HPCL's books. So from a capital allocation point of view, would not the company prefer to derisk the exposure and get a foreign partner, maybe a Middle East company and reduce its holding from 74% to 50% or below. Would not that have been more prudent, sir?
So let me take this question in 2 parts. First part is that the policy regarding disincentivizing the fuel products. To that extent, there is a different connotation for different companies. As far as HPCL is concerned, as I mentioned to you, we are already short of products. So even there is a 0 growth, then also I'm short of product. So because I got a marketing business and where -- even if there is a 0 growth, also, I will need the product. So to that extent, that concern does not arise in case of HPCL. It may be concern for other companies who are already maybe balanced on their supply and refining marketing setup or they may surplus products. That is also one of the reasons that even when the demand contracted, also, we were able to run our refineries to full capacity. So that answered the first question.As far as second question is concerned, that, Rajasthan refinery has got one importance in terms of petrochemicals because it brings the petrochemical manufacturing facility to us and with the possibility of further downstream integration in future for -- because -- in the chemical side. So to that extent, Rajasthan refinery is not purely a fuel refinery. As I mentioned, it has got a high intensity of petrochemical to the extent of 25%, 26%. That's the second part of it.The third part of it is, whether we should risk or derisk. That is a strategic call which the company takes. And that opportunity always exists. So you can always get a partner by creating value at the right time. So that call, we can always take. Like a number of times, the people used to ask us that whether we should be bringing IPO for HMEL or whether there should be a -- but we need to see always that whether -- which is the best value creation today or tomorrow. And we can always take call. So by having 74%, we have got that opportunity available with us that we can continue to have a reasonable say in the refinery, at the same time, being able to dilute some of our equity. But that call has not been taken as of now, and we will see that as fortunate time.
Sure, sir, so just to understand that till that call is taken, it would be fair to assume that over the next 3 years as the Rajasthan refinery comes into place with a INR 45,000 crore plus project expense, HPCL as a consolidated level would see its gross debt broadly go up from INR 30,000 crores INR 35,000 crores to INR 50,000 crores, sir. Just simply because of the consolidation.
No. Because that -- we are not -- that is an independent loan on that balance sheet. So it doesn't get consolidated to our balance sheet as far as the loan is concerned. We have not assured that from our side.
I understand, sir. But HPCL will have majority, 74% ownership?
Yes, that's correct.
Ladies and gentlemen, this will be the last question, which is from the line of Sabri Hazarika from Emkay Global.
I have 2 questions. The first one is relating to the announcement which -- can you hear me?
Yes.
Yes, yes. So the first question is relating to the announcement, the Finance Minister made regarding the pipeline business. So they have like -- so she has specifically mentioned HPCL's name. So is it a -- I mean, is it up to the company to decide whether they want to go for it? Or is it like -- I mean, is this some sort of a compulsory kind of a thing that you have to go for this pipeline? And secondly, what would be the value of your pipeline asset, whether it's a replacement cost value or the book value of the pipeline if it's current?
No, it is early to say all that. There was some announcement that has been made. And definitely, we need to see that what are the -- which is the best value creation. So that is a thought, and the idea is the -- which has been put in the budget. That it is a -- there is a possibility of taking the value on that. Now if we see from the government's point of view as far as HPCL is concerned, any monetization does not accrue directly to government, unlike IOC or GAIL or somebody. So that part also should be kept in mind. And we will definitely see that, to what extent, which is a better value creation idea. Now as far as the cost of the pipelines are concerned, at different points of time, these pipelines have been commissioned. So there is a replacement cost, which ranges between INR 4 crores to INR 8 crores per kilometer as of today. Any pipeline, if you want to lay, it will cost anywhere between INR 4 crores to INR 8 crores, depending on what is the size and what is the pressure and which terrain you're laying, but it will be in that range. And what value it has created, depending on the -- which sector you are running and what volume you are running. So this will be a combination of that, which will decide the value of this.
Right. So this financing is announcement is more like an advice kind of thing, rather than dictator. Is it right?
The budget gives an intent. And then subsequently, the modalities have to be worked out. So the budget gives the intention of the government and the policy direction. And then the implementation of that always need to have the details of the modalities to be worked out.
And just 1 last question. This is regarding the Rajasthan refinery. So like you said, it will be a heavily petrochemical-integrated refinery. So any wall pack profitability estimates or GRM estimates of aggregate, anything of that sort, would you like to give at this point of time?
So because the refinery GRM had been going up and out, but I can tell you this will have one of the best GRMs in the country. One of the very high complexity factor and one of the best GRMs in the country. That's what I can tell.
Will it be near $20 rate?
To give a number right now, it will be difficult. I can only say it will be a double-digit number, definitely, and it will be one of the best in the country. That much I can tell you.
Ladies and gentlemen, as this was the last question for today. I would now like to hand the conference over to the management for closing comments.
So first of all, thank you very much for all the people who have joined the call. And their interest in HPCL for going through the numbers, putting some very highly involved questions after having done substantial analysis on the company and that makes us happy that the people continue to be interested and invested in our company. As far as we are concerned, we have consistently demonstrated a high level of physical and financial performance, and we will continue to do that. We have also consistently demonstrated our intention to create value for the investors. Share buyback was one such call. And the past, we have taken a liberal calls on dividends, bonuses, et cetera. And we will continue to do that also. As far as the company is concerned, the profile of the company will be quite different in next 1 to 2 years based on our certification of all our projects and the additional product lines in terms of gas, in terms of petrochemical, in terms of value-added products, which will be the future growth drivers for the company, which should sustain the good performance in the past.So with these few comments, I thank you, once again, everybody, and wish you all a happy new year as well because in this year we are meeting for the first time. And while the Corona is retracing -- receding now and we should have a better year, but at the same time, take care and stay safe. Thank you so much.
Thank you.