Mangalore Refinery and Petrochemicals Ltd
NSE:MRPL
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Q3-2026 Earnings Call
AI Summary
Earnings Call on Jan 19, 2026
Profit Surge: MRPL reported a sharp year-on-year jump in EBITDA to INR 2,824 crores from INR 1,064 crores last year, driven by strong market prices and high operational efficiency.
Strong Efficiency: The company achieved its best-ever energy efficiency (MBN of 67) and one of its lowest fuel and loss rates at 10.06% for the quarter.
Debt Reduction: Net debt stands at INR 9,290 crores with a debt-to-equity ratio of 0.63, and management aims to further reduce debt next quarter if market conditions remain favorable.
Retail Expansion: MRPL reached 200 retail outlets, targeting 250 by fiscal year-end, 500 in three years, and 1,000 in five years, with a focus on higher-margin retail sales.
Bio-ATF Plant: The company is building India's first bio-ATF plant to meet global aviation fuel norms, aiming for compliance and blended ATF supply from 2027.
Healthy Product Cracks: Product cracks (HSD, ATF, MS) saw a significant Q3 jump, though have since moderated to Q2 levels.
Exports & Sourcing: About 40% of refined products are exported, with 40% of crude sourced from the Middle East; no current Russian crude imports, and Venezuelan crude is being considered.
CapEx Guidance: Annual CapEx remains around INR 1,500 crores, split between maintenance and growth projects.
MRPL posted a strong year-on-year and quarter-on-quarter improvement in financial results, with EBITDA rising sharply to INR 2,824 crores from INR 1,064 crores last year. This was attributed to healthy market prices, improved energy efficiency, and higher product cracks. Management expressed confidence in maintaining healthy performance in the coming quarters if market conditions remain supportive.
The company achieved its best MBN (a measure of energy efficiency) at 67 and one of its lowest quarterly fuel and loss rates at 10.06%. Ongoing projects, such as grid power integration, are expected to further reduce fuel and losses to between 9.5% and 10% next year, and MRPL continues to focus on optimizing throughput and energy use.
MRPL is significantly expanding its retail footprint, reaching 200 outlets and targeting 250 by year-end, 500 within three years, and 1,000 in five years. The management sees retail as a crucial area for margin improvement and long-term stability, shifting from a refinery-focused operation toward a combined refining and marketing business.
About 50% of MRPL’s output by volume is HSD and ATF, with MS accounting for 15% and other products making up the rest. Around 40% of refined products are exported. The company is not currently importing Russian crude and sources about 40% of crude from the Middle East, primarily Saudi Aramco. MRPL has the technical capability to process heavier crudes (currently around 70-72%), and is considering Venezuelan oil if commercial terms are favorable.
Product cracks for HSD and ATF rose from $15 in Q2 to $21 in Q3, but have since moderated back to $14–$15. Freight rates spiked in early Q3 but have come down, though they remain above prior averages. Management expects product cracks to remain healthy but not at the Q3 peaks, citing ongoing market complexities and international sanctions as influencing factors.
Annual CapEx is guided at about INR 1,500 crores, of which INR 400–450 crores is for growth projects like retail network expansion and grid power, with the rest for maintenance and revamping. Major projects include the bio-ATF plant for compliance with international aviation fuel norms and a pilot isobutylbenzene (iBB) plant for pharmaceuticals. CapEx is expected to remain stable over the next few years.
Current net debt is at INR 9,290 crores with a debt-to-equity ratio of 0.63. Most NCDs (non-convertible debentures) are locked until 2028, and ECBs (external commercial borrowings) provide additional cushion. Management aims to further reduce debt if market conditions allow, but does not anticipate a dramatic drop. Dividend decisions will depend on ongoing CapEx needs, debt levels, and profitability.
MRPL is investing in sustainability and innovation, including setting up India’s first bio-ATF plant to comply with CORSIA international aviation norms by 2027, and developing an iBB pilot plant for pharmaceutical intermediates. The company has won innovation awards four years in a row and expects these projects to start contributing from next year onward.
Yes, we can start. On behalf of -- we would like to welcome all the participants to this quarter 3 results conference call of MRPL. From the management, we have Devendra Kumar sir, who is the Director of Finance; and we have Subhash Pai sir, who is Head Finance. And we also have Avin Gupta, who looks after Investor Relations. So I would request the management to give a brief overview of the results. Post which, we can open the floor for Q&A, sir. Over to you, sir.
Good morning, everyone. Welcome to the third quarter con call to discuss the financial performance of the company. As you are aware of the numbers published last week, MRPL posted a significant jump in year-on-year as well as quarter-on-quarter performance this quarter. The EBITDA earned by the company was INR 2,824 crores versus INR 1,064 crores for the last quarter Q3 -- last year quarter Q3.
Healthy market prices, optimum energy consumption and throughput led to published bottom line numbers. MRPL posted MBN of 67. MBN is a measure for energy efficiency for its capacity and its complexity. So this was the best number posted in any quarter. The fuel and losses stood at 10.06% for the quarter and which is also one of the best in any of the quarters.
Further, current debt stands at INR 9,290 crores and debt to equity stands at 0.63. If the market remains good and which we sincerely hope will, we should be able to reduce the same further during the next quarter. Further, for the sake of repetition, based on several queries we get off and on, MRPL is now well past its summer water blues, water issues due to desalination plant. MRPL is also a unique refinery in India with 3 separate crude trains that gives us operational and maintenance flexibility with slightly higher fuel and losses. The said, higher fuel and losses will also be taken care within the next fiscal year with grid power project, which will bring it under 10%, closer to 9.5%, but it will be somewhere between 9.5% and 10%.
We are also the first Indian refinery that is establishing a bio-ATF plant at a cost of INR 364 crores. The plant will help us to get in compliance with CORSIA norms. CORSIA norms is for carbon offsetting and reduction scheme for international aviation fuel, and we'll be able to supply blended ATF across the globe starting from 2027. 2027 is that 1% blended ATF.
We have consistently won the prestigious Innovation Award at the Energy Technology Meet last year at Hyderabad, 4 years in a row, including the current year. Efforts of our innovation team will start to show from next year when the IBB pilot plant gets running. IBB is for isobutylbenzene. It is a base for pharmaceutical.
On retail outlet front, we are delighted to announce that we have achieved the 200 mark retail outlet mark and should be able to complete around 250 outlets within this fiscal year itself. For the upcoming quarter, the refinery is focused on maintaining its operational performance, and we expect the market to continue to support us, and we should be able to post a reasonably healthy Q4 '25, '26 also.
Now we are open to questions and clarifications from our investors and analysts, please.
Yes, Dhaval, you can go ahead and introduce yourself and ask your question.
I understand that MRPL exports diesel to Europe, and there is an 18th sanctions package that comes into effect on January 2021. So can you help me understand what is the situation in terms of sourcing of crude that MRPL has now as well as going forward and whether this will impact MRPL's earnings by any chance? Or will it not be able to export to Europe? Or how is that?
We are in strict compliance with all sanctions in place. And currently, there are no Russian crude which is being imported. And we will continue to comply with any of the international sanctions regime or government guidelines on. So in near future, we do not expect anything to stop our export of finished products.
Okay. That is really helpful. And second question I had was in terms of -- I do understand you have access to VLCC. But in the terms of freight rates, is the company doing anything to minimize this? And third question I have is on fuel and loss. You said it is going to be lower in terms of power grid. But is there anything else that the company is doing to -- for energy integration as well? So one, of course, on the freight rates, how is company managing that? And second on energy integration, any other programs being run by the firm?
First question first, freight rates. We did see a spike in freight rates earlier in Q3, but the freight rates have gradually come down to the normal levels. They're still higher than the averages, but it has come down significantly from its peak. So freight rates are not a deal breaker in any of our imports.
The point number two, regarding energy integration. See, the location plays a very crucial part based on the availability of the kind of energy, the energy mix, we will continue to explore further. Currently, some of our energy is being based on the grid availability is being considered. It is already online. And next year, we should be -- this particular project should get completed. That will bring down the F&L well below 10%. Right now, I do not want to put a number to it, but we are targeting somewhere between 9.5% and 10%. And we'll continue to keep improving because grid availability is something which is slightly or majorly beyond our control, although we continue to have interaction with the policymakers and other players in the region.
Mayank, you can introduce yourself and go ahead with your question.
Mayank here from Morgan Stanley. A couple of questions from my end. First was in terms of -- you talked about the crude sourcing changes. Can you just tell us the impact on margins you have had because of these crude changes because you're not disclosing refining margins anymore. So if you can just give us an idea of what's the impact on the GRMs that you're kind of seeing?
And second, in terms of costs that you were talking about on grid power, et cetera, can you just tell us, is there a way you can also lower your costs on the gas sources side? And how much has been the impact on -- of that, if there is any?
And the third question related to was there has been a bit of an increase in terms of sulfur prices, et cetera. What has been the impact on margins for you? And where do you see those going?
Okay. First is regarding the crude sourcing and GRM. If you recollect during half yearly accounts, that is Q2 accounts, we had taken a policy step that GRM computations and depictions and publications are not standardized by the different companies or in any of the forums itself. So we had discontinued publishing that, and it is also in line with some of the other major PSUs and other companies also. However, we had given an indicative figure that it is double of what was the quarter 1 margin. It is still similar -- it is still in a similar range at a cumulative level.
Coming to the crude sourcing part, we have consistently maintained our stance that Russian crude were opportunity crudes. They always played a marginal -- they were -- in our overall strategy, they were always playing a marginal role in improving the bottom line, but it was not kept as a crucial factor. We did have a margin on Russian barrels initially, and it had come down significantly towards the latter part of this calendar year. So loss of Russian barrels is not going to make a significant kind of an impact, whereas on the finished product side, you have seen the cracks going significantly up. So that more than offsets the loss on account of Russian barrels. And that is how you see a very healthy Q3 performance of the company. Coming to your question 2 regarding gas, can you just restate that I did not get it correctly.
So sir, I think the reason to ask that question on gas was that you do use -- like LNG prices have been higher for most of this year and fuel oil was becoming the alternative source for most refiners to run the refineries as such, it was much more economical. From going forward basis, are you seeing any areas where you can actually lower your cost by sourcing cheaper LNG is where the question was coming from?
See, our LNG consumption is relatively low. I'm not sure, it's quite low. It's relatively low. And we already have a term contract with BPCL and it is at a significantly competitive price. It is not way above. And in fact, the newer LNG may, in fact, be higher than that. So I can -- I'll not disclose the final prices. It is very competitively available to us. And parallelly, we are also exploring other sources, including CGDs, including the parent company because parent company also has a certain arrangement with the CGDs, especially in the southern areas where there is some untapped gases. So all those discussions are on. It is yet to be firmed up. The commerciality has to be worked out at all the ends both at parent company level, our level as well as CGDs, but it is still in its infancy. So gas costing is not going to be a crucial issue. It is a very marginal issue.
Now coming to the third point, sulfur. Again, sulfur, we still treat it as a secondary risk. It is again treated as a marginal item. If the price were on the higher side, it is not part of our strategy, but it is already with us.
[ Kaushal ] you can introduce yourself, unmute and go ahead with your question.
Am I audible?
Yes, Kaushal.
Yes. Go ahead.
I'm a little new to the company. Just wanted to know what is the revenue mix as in like what is diesel, what is ATF? Can you just throw some light on that? And what are the cracks -- what were the cracks in quarter 3 and what are the cracks currently?
Yes. Avin is going to read out the numbers.
So I'll come to the cracks first. The Q2 cracks were comparatively healthy from -- when we compare it to the Q1. HSD was around 15, ATF was around 13 and MS also marginally improved from whatever we were earning in Q1.
Our -- further, coming back to question number one, volume-wise, our product slate gives us HSD plus ATF at around 50% and MS at around 15% and the rest of -- the remaining 35% comes from other products. So this is what a broad level breakup of our products slate is. This also includes 10% of fuel and loss that straightaway goes into our fuel part of it.
Sir, I didn't understand the cracks question. So Q2 cracks were around $15 to $13 and Q2 -- and Q3 was how much and how much is it currently?
Okay. So currently, it jumped -- from Q2 was $15 and Q3 was $21 for HSD, similar for ATF and MS from $8 to $13.
And currently, how much is it like? How much is it -- the ongoing run rate maybe if you [indiscernible].
Currently, it is not as high as $21 and $13 that I told you. It has come down -- and it has moderated to around $14, $15. This is what the current published cracks are.
So from $21 it has come down to $14, $15 and...
Yes. As of now, as on date.
So it's similar to what Q2 levels were basically?
Yes. Cracks are right now are in the trajectory that was in Q2.
[ Akash ] you can unmute yourself and go ahead with your question.
Sir, I just wanted to understand what would be the impact in terms of higher freight rates in the third quarter maybe in dollars per barrel or rupees crores? And second, relating question, you said the freight rates are kind of normalized right now. I mean the disruption still remain, right? I mean, is it normalized for you or the industry or how to look at it?
Thanks, Akash, for this question. I'll be repeating myself. The freight rates were concerned, both from investor analyst perspective as well as our perspective. There was a supply issue. But in the current context, other than the Middle East tensions, there is no supply crunch for these vessels. Rates are gradually coming down. It is no longer what it was at the peak in Q2. It has come down significantly, but it is not close to the Q1 levels. So there is a big mix of rates. I can only say in general terms that it is slightly higher than the Q1 rate, but way below the Q2 and early Q3 rates.
Sumeet, you can go ahead and ask you a question.
Firstly, sir, I would like to direct -- if you take a 5-year perspective, can you throw light on where do you see our company in terms of refining, in terms of marketing because you're also adding some outlets? So if you -- so if I take a 3- to 5-year view, can you just share what are your big growth plans going ahead, sir?
From a strategy point of view, we have realized that retail is going to be a big player for -- a game changer for the refinery. Earlier, it was just like a base refinery. But over a period, with capacities coming up in other refinery. So we expect that this is the major area where we need to work much smarter and that is how we are focusing majorly on retail outlets because the margins available on retail is superior to what you'll get only at the refinery transfer.
And in fact, export sales can be a little volatile. Occasionally, it favors us. And occasionally, you -- there are pitfalls in that export sales. This retail will give us a sense of stability going forward. So in 3 years' time, we are planning about 500 outlets and we are keeping this target as reasonable and modest. We don't want to go overboard. And in 5 years' time, about 1,000. And that is where the expansion is supposed to reach a very crucial tipping point where the growth rate 5 years down the line should be much higher. In a typical retail marketing outlets that establishing, the first few hundred outlets is very difficult because you start from scratch, but then you're way ahead on the learning curve and it becomes speedier and speedier. So you will see a significant growth in terms of our retail portfolio. And we are targeting that particular segment.
So how many fuel outlets do we have today?
Today, we have 200. We're targeting 250 by this year-end, 500 by 3 years' time, and that is keeping it as a conservative figure.
[ Nilesh ] you can unmute yourself and go ahead with your question.
Am I audible now?
Yes.
So as you mentioned that you are planning to expand from 200 currently to 500 and then subsequently to 1,000 retail outlets. So what kind of investment you see over the next 5 years in marketing? And on this is just on the retail side, you are mentioning, but what about the depots and the pipeline infrastructure that you are planning to develop over let's say, 5 years?
We are already -- that is aligned with our retail outlets. The question is absolutely right. Any kind of retail expansion requires the secondary capacities to come up. And we are targeting the states which are adjoining Karnataka in the near future. And we are also targeting establishment of depots in all these rural locations, both on the East Coast as well as the West Coast.
So Mumbai is a target. Maharashtra, Vizag, and we are looking for capacities. Kerala is a target. We already have capacities. We are also looking at expansion of those capacities based on our retail offtake. And we will continue to also look at the pipelines. The latest being we are targeting the Bangalore airport pipeline. The tenders were already on. The final outcome is awaited. That is the Devanahalli pipeline. And as and when future opportunities come, we'll continue to look at those.
And sir, what kind of investment in marketing you envisage over, let's say, a couple of years or 3 years down the line?
So these kind of infrastructure will depend on the licensing because the retail outlets do take certain time. There is so I'll not give it time frame. But typically, the depots could be in the range of INR 50 crores to INR 100 crores annually and depending on the capacities. The pipeline would be in the range of INR 200-odd crores. So major plant is in Mumbai, Vizag. This will help us to take care of the entire Southern India, and depots -- smaller depots and other areas. So you can say it will be in the range of approximately 500 plus/minus in the near future.
Okay. Sir, my second question, what percentage of our product sales is through our own retail outlet currently?
Right now, the percentage it is not going to be very significant because we are in that expansion phase. We have still not captured the kind of market it is a very small fraction of the total volumes, total revenues. It is approximately 2% -- 1.5%, I believe -- let me just.
Yes. And once you achieve that 1,000 retail outlets in your own retail outlets, so what kind of a revenue expect from your own marketing business, marketing sales?
As I had mentioned earlier, we are targeting retail as a major revenue earner in future. Reason is that 1,000 is only an intermediate target. In future, we want this refinery to be a full-fledged refinery and marketing business, not just limited to only refining. So right now, we are keeping 1,000 as an intermediate target, about 5 years' target because we do have certain challenges when you are entering the market for the first time in many of the states. So that is a critical inflection point we expect. After that, we should be targeting higher numbers based on the experience. So it is targeting retail outlets as well as the depots that is the support. We're also opening offices like Chennai office is a major office. We also intend to have more marketing offices in the upper Karnataka region, Andhra region, Telangana and Mumbai region. So these are our medium-term targets.
Yes, sir. And just last question from my side before I join the question the queue back. So what about -- this is you are talking about the retail outlets you mean the petrol and diesel? But what about the other products marketing? What are your plans? Because there will be some pressure for the other products as well with the other oil marketing companies are expanding their crude throughput or refining expansion. So what are your plans for the other products?
So the next apart from MS and diesel, the next is the ATF. ATF where we are very well placed. And technically, as I mentioned, we would be one of the first to be compliant with that CORSIA standards. And based on our tie-up with the Shell that is an affiliate company, we expect this particular business to keep growing, and we intend to -- we expect this market share to be completely with us. We do not see any dent in our ATF holdings going forward.
[ Kaushal ] you can go ahead with your question.
Sir, am I audible?
Yes, Kaushal.
Sir, I just wanted to understand, we have a 15 MMTPA plant. What would be the replacement cost for a plant like this if we were supposed to set up this plant from scratch, if someone was to set up from scratch? What is the CapEx required for maybe 1 MMTPA? Can you just throw some light on that?
See, typically, there are certain thumb rules and it varies from location to location, and also on the complexity, what you were planning ultimately. So if you take the latest Barmer as, say, the latest addition, it is almost like INR 8,000 crores per MMT. It could be higher if you are planning a more complex sourcing and more complex processing, but INR 8,000 crores per million tonnes. That is like a benchmark.
So depending complexity that we have currently for that also is INR 8,000 crores per MMT?
No, it will of course increase because you are not just refining crude for your primary products, but then there are other intermediate plants which have to be put up. So for the petchem, that will take it to higher than INR 10,000 crores also.
Okay. So INR 7,000 crores to INR 10,000 crores is a reasonable point of view, if I was to just think of replacement cost?
Yes, yes. That is right.
And sir, why were the cracks? Why did the crack suddenly shoot up in quarter 3? What was the reason? Was there some global reason or anything that you look back you could pin to?
You follow the market more than us. You know the reasons. We have a lot of uncertainties prevailing in the market sourcing, commercial and these sanctions. So these are playing a very complex -- I can only say that this is a complex place. It is yet to stabilize. And this complexity is not to go -- not going away immediately. So as it was mentioned in the first, very first question that end of January, what are going to be the implications of the sanctions who are all compliant, that will also come into us. So we are also waiting and watching and aligning ourselves to evolving market.
Sir, if we want to have a management meet, how do we get in touch with you?
You are welcome to Mangalore anytime, and all of you, you are welcome to Mangalore. You can also see our refinery. I'm sure it is going to impress you.
So, sir, how can we get in touch -- should we? Who is the concern person who we can get in touch, any e-mail address?
Avin Gupta is our [ client ].
You can get in touch with me any time whenever you want to visit, we can plan that.
Sir, can I have a email address, please?
This is avin_gupta.
A-V-I-N?
[email protected].
Dhaval, you can unmute yourself and go ahead with your question.
Yes. So basically, now that the Russian crude is no longer the part of the slate, can you provide a broader percentages? I understand Middle East is a majority. But still, if you can give us whether it's -- where exactly the crude is being sourced in terms of the percentage or broader percentage -- or the -- if you can provide some guidance on that?
See, about 40% of our crude we have collectively together with Government of India, we are committed to Middle East crudes led by Saudi Aramco. So that gives us a very stable kind of sourcing whatever may be the geopolitical conditions, and we would continue with that.
Apart from that, we have the tender process, and tender processes aligned more to the -- because we do have a complex refinery and our product mix will decide the kind of crudes which are required. Sometimes, you require very sweet and light crude, sometimes -- something which is heavier. And it is a combination of -- it could be from Middle East also, but it could be from the domestic suppliers -- domestic producers from ONGC, both East and West Coast as well as Mangla crude. And we also have this arrangement of -- that is one-to-one sourcing. And those arrangements or MoUs are in place in some of the cases, like with TOTSA or ADNOC, those can always be relied upon in near future.
Okay. I understand. And is there a minimum percentage of high sulfur crude that you maintain in your slate?
I didn't get you, minimum number of?
Minimum percentage of high sulfur crude that would be maintained in your refinery slate. I understand there will be different products and different requirements. But is there a benchmark that is that we can keep like high sulfur crude that you would have in your refinery?
So high sulfur crude, we don't target high sulfur crude. We target based on other components. And if it turns out to be high sulfur, it is not a no-go for us. It's not a deal breaker because we have a sulfur treatment facility in our refinery. So for us, it's not an issue.
So let's say, let me -- so if I have to gauge how much percentage of heavier crudes do you particularly use? Or is there a minimum benchmark that you have for heavier crudes?
Yes. Again, this side. So see, as you already know that our refinery is a complex refinery. We can even process heavy crude such as [indiscernible] Maya, apart from whatever we are processing currently. But we can go up to 16, 15 API also. This is the capability the refinery has. But -- it really depends on the economics at that particular day when we are purchasing the crude that what crude we are going towards.
Our refinery is obviously biased towards heavier crude because that is economically more suiting us because of the complex nature of the refinery. But I cannot tell a thumb rule percentage that this much only or around a set percentage, we are processed only heavier crude and not the lighter crude. It really depends on the opportunity that we are getting and the complexity and the economics that the product will bring us to that.
Dhaval, I'll put the same thing in simpler terms. See, a more complex refinery, heavier crude can be processed more easily.
No, no, I understand.
If we don't get the heavier crudes at a cheaper rate, we would not go for heavier crudes. That is the simple commercial reason for it.
Currently, for the 9 months, I can mention that it is around 70% to 72%, the heavier crude.
Sir, we have 2 questions in the chat box. I will read that and please try to answer that one. So the first question is asking that is there any throughput that we have declared in our press release is 4.7 million metric tons, whereas CPSE is 4.561 million tonnes. Any reason for the discrepancy in the...
See, what we have published is what I have immediately. Regarding the CPSE numbers, I'll have to -- I can only get back to you. I'll not be able to commit immediately because I don't have that with me immediately. You said it is 4.56. I hope there is a confusion between production numbers and throughput numbers. We'll get back to you.
[indiscernible]. You have the number -- you can say that.
So the thing is I mean to say the 4.56 that you mentioned was the gross crude percentage, the 4.7 that we -- million metric ton. And the 4.7 that we reported in our financials, that was a net crude percentage. So our revenue and the rest of the things in the bottom line is driven by the net crude. That is why we focus on net crude and not the gross crude.
Sure, sir. The second question is, is MRPL looking to buy Venezuelan oil for processing?
Yes. So we are actively looking at it. We have not decided, but we are looking at it. It depends on the commercial terms because freights are expected to be on the higher side when the rate is also -- that is low API crude. So we will look at the total terms and condition and the commercial.
Sure, sir. And the last question is if you can highlight what CapEx you in the quarter 3?
So we have committed earlier also in Q2 that the overall CapEx on an annual basis is in the range of about INR 1,500 crores -- that is the kind of CapEx we target, it's a mix of revamping as well as small time that is some capacities which we keep adding. It's not a capacity addition of total, but intermediate products like i-BB was one such product or grid infrastructure. There are some other minor projects also, some pipeline that is you change yes, rerouting, yes.
Sure, sir. Sir, one last question from my side. So we have also announced this iso-butyl benzene pilot that we said that we will do in the next year. So before we take our question, [indiscernible] also has a question [indiscernible] you can unmute yourself and go ahead sir.
I just had one follow-up question on the CapEx part. So you mentioned that INR 1,600 crores that we are planning to do in FY '26. If you could just help me as to how much we have incurred till December and also your guidance on FY '27 basis because I believe there should be some tapering off in CapEx, if at all, we include the iBB part. And also, how do we see the return metrics and the project of iso-butyl benzene that is coming up and how it will add to the profitability part? And lastly, sorry for the elongated question, lastly, how should we see as the dividend payout policy for this year and next year as well, considering we are going to do good numbers in Q4 as well, similar like Q2 numbers. So a bit of clarity on this will help.
I'll answer the last question first on the dividend part. Dividend per se is not out of discussion. It has to be seen in the context of the 3 requirements. One is our own CapEx requirement. Second is the kind of debt which we carry. And the third is, of course, the dividend. So compared to last year's annual profitability, the 3 quarters have been relatively good. And we did push some of our ongoing CapEx to this year. Those should get completed. And if Q4 remains profitable that we might -- that is not me personally, the Board might actually look at dividend also.
So that I will leave to the decision of the Board, but that is definitely on the [indiscernible] that looking at the overall fourth quarter, there could be a dividend possibility. Now coming to the first question. First question was -- the CapEx was INR 887 crores, that is first 3 quarters. And some of our -- these projects should be coming to a major technical closure by end of March. So this could go up to about INR 1,500 crores.
Got it, sir. And any clarity on next year's CapEx numbers, FY '27?
It will be in the similar range because revamping is something which keeps happening constantly, you need to maintain the plant in best of working conditions. As you can see, the plant is -- but for the shutdown, first quarter shutdown, we would have continued to have throughput of almost 18 MMT. So it is almost 120% above the nameplate capacity and to keep the plant running at top performance, you need to continuously keep looking at your equipment and whatever requires revamping has to be attended to.
So we do have some ongoing projects, plus some are opportunity projects, like I said, the rerouting of pipelines. So the target remains in that ballpark point of INR 1,500 crores.
Sure, sir. And just very lastly, any debt number that we are looking at, considering that we have a commendable achievement to push the net debt below INR 10,000 crores as of now. So how should we look at the debt numbers moving in this year and as well as '27?
You have seen our balance sheet. We have NCDs on our books. Those NCDs are not due till '28. So whatever has been paid in December, after that, the next due date is '28. So it's almost INR 4,500 crores is locked till '28. The next big item is the ECBs. And ECB is -- right now, there's some volatility. But otherwise, the ECB gives us a certain cushion -- so we are actively evaluating that. It's a trade-off between debt reduction because if I have to pay out that ECB right now, you do incur -- there is a foreign exchange loss.
We do expect ForEx market to move if the U.S. trade deal comes through, and we'll take a call accordingly. Right now, it is 93 and it could come down not very significantly, but it might come down if the market remains favorable.
[indiscernible] you can unmute yourself [indiscernible]. I think there's no response from this line. So is there one more question...
Can you hear me now? Yes...
Go ahead.
So sir, coming back to your point on fuel marketing since you're looking at a 5x kind of growth over the next 5 years. So sir, if I recall this correctly, when Reliance and BP had done a deal, the valuation, which they took was basically at about INR 10 crores per fuel outlet. So can you basically concur with the same that the cost to set up fuel outlet should be something like at least about INR 5 crores to INR 6 crores.
I mean the pure reason I ask this is, sir, today, in the listed domain, we've got our parent as well as oil marketing companies, which are trading at subpar valuation. So can you just help understand on one side, we see the reality is that there is a substantial amount of growth in the market that not only you, but all the companies are adding retail outlets. And you're kind of clearly seeing from Mr. Hardeep Singh Puri also talking about making India a refining hub of about [indiscernible] . But to the other side, you have the stock markets which don't value these companies.
So can you help understand the divest between the 2 and on the valuation of fuel marketing would really help a lot?
That's a very interesting question, and I would love to answer that. So thanks for the question. So first thing first, the retail outlet, the cost is significantly different depending on the location. So if it is a urban location, you are right, it could be much higher. But all the newer outlets which are coming up, so we have a mix of outlets coming up.
We are also bound by certain guidelines of the ministry government guidelines. So it cannot be only urban or only in the cities or only on the highways, there is a mix and match. So the outlets, and we also have that is plain vanilla kind of outlets and a slightly smarter outlets. So the cost would vary from as low as about INR 1.5 crores for a smaller outlet to something what you have mentioned, and that will be for a bigger city kind of environment. So for us also, it is a very similar mix and match.
Right now, going forward, we have advertised depending on the responses on an average, it is coming out to be in that range of INR 2 crores. That is the current. But whether it will continue to be in that same range going forward, I cannot comment on that. It will -- it will depend on the market response.
Understand. And sir, I mean, just one question. I mean, to the earlier participant, you said that the cost to set up 1 MMT of refining is about INR 7,000 crores, if I heard correctly. So today, for example, you have about 15 MMT, okay? And your throughput, as you mentioned, is about 18, okay? But you clearly see your market cap is only INR 25,000 crores.
So the point I'm trying to make is that what steps are you guys taking to increase market capitalization because these companies [indiscernible] need to start trading at a much higher PE multiple than what they trade today. So can you share some thoughts on that as well?
Sumit, you have asked a question which we also ask yourself. But yes, depending on the feedback, -- this is a common troubling point for all the OMCs. It's not just us. It is all the OMCs, PSU OMCs that the valuation is much below -- you rightly pointed out that. And one very crucial fact is that almost the entirety of the pricing and the taxation is still considered controlled by the government despite all the deregulations happening in this space, I'm referring to your fat annuity.
We keep getting that feedback. And one is like we had the [indiscernible] , although it is no longer there, you never know in a crisis, you might again come up with some other kind of tax. That is the kind of feedback which we have got. In case of MRPL, one peculiarity is that our float is very limited. Almost 88% is with ONGC MRPL and only balance 12% approximately is in the open market.
Even in that 12%, about 1% would be locked up those nonparticipants. So the float is also issue, and we are examining it together with our parent companies to address that float issue.
Sir, we have a couple of more questions from the chat box. What is the initiative to reduce the crude sourcing cost?
What is the initiative to reduce crude sourcing cost?
Are you -- sorry, I didn't get the question correctly. Is it referring to the freight or overall?
So it would be around overall, sir. So I think whatever we are doing in terms of reducing the total cost of purchase as far as the crude basket is concerned, be it freight or maybe be it, say, sourcing change in terms of long term, short term or taking benefit of arbitrage crude or freight...
Okay. Thanks for this clarification. See, like any other refinery, we are also mark-to-market. We are not in a league to be actually dictating any of these things like OPEC or any other large company. However, our margins are derived not from the absolute rate. It is derived from the cracks, and that is where we make our major earnings from.
And this is where we keep targeting that is a mix of export, a mix of domestic term sales. And now we are also targeting the retail outlets. That is where the margins for the company are. It is not just the sourcing, it is the margins which are important to us.
Another question is on our retail throughput outlet. What volumes are we doing per outlet per month?
I'll come back on the retail outlet volume part. You may proceed with the next question. I'll clarify in a minute.
NCD number, what is that number? 3,000.
The NCD that was asked number is INR 3,260 crores that we are having.
Right now, this is the balance amount, INR 3,200 crores.
Yes. And ECB amount is INR 500 million. That comes to around INR 4,500 crores.
Sure, sir. So next year, we have also guided around INR 1,500-odd crores of CapEx. Is there a breakdown of the same thing in terms of what is the maintenance CapEx and what will be going into i-BB or anything like that?
I'll request my team. They'll give you the breakdown shortly. We can take the next question.
Question is how much percentage of refined products are we exporting currently?
We export almost 40% of our products in exports right now. That is the percentage. It may change quarter-on-quarter, but I'm giving you a figure from -- on a running basis last year.
And additionally, the retail outlet sale is around 120 KL per month per...
There's one question, basically the person is asking what is our expectation on GRM considering that capacity is becoming constrained globally?
GRM, if you follow the markets, it is still quite healthy. Although we did say that it is going closer to Q2. In fact, it's not as high as Q3, but it is still quite healthy. And it suits us fine because very high GRMs, we know market will not be able to sustain the kind of GRMs, which we saw in Q3. We did have spikes beyond '21 also.
That's all from the chat box, sir. If you have the CapEx breakdown, we can take that otherwise, we will do that.
CapEx breakdown you have... Just give us half a minute.
So in INR 1,500 crores, around INR 400 crores to INR 450 crores will be towards the growth part of it. So retail outlets and other projects, grid power import and all those things. The rest you can take towards our -- majorly towards maintenance.
Revamping that is what we call.
Sure, sir. Sir, just one last question. What is the IRR we are expecting from i-BB, -- if you could share some financials in terms of project that we are doing, what kind of CapEx is required capacity and all that stuff?
Regarding i-BB, we are still -- yes, it's a pilot project, and we are still quite a few years from its commercialization. So we need to go across many decision gates. First is the technical that is inspection of that. It has to meet that stringent quality norms.
And we are quite hopeful of that. So after that, to get the licenses for the first -- we still see about 3, 4 years down the line. And only after that, we'll be in a position to take a realistic view on the IRR. It also depends on the market conditions at that point in time. So right now, taking a call on IRR is a little too early to comment on that.
Okay, sir. So that was the last question, sir. On behalf of [indiscernible] Capital, we would like to thank all the participants for the valuable time. We'd also like to thank the management on sharing the details. Thank you very much, sir. Have a nice...
I would like to thank each one of you who has shown interest in the company and taking time out. I would like to reemphasize each one of you is invited to visit our plan, and we are available to meet once again in person also. Thanks for your time. And if there are any questions which remain like ambiguous or unanswered, please free to contact to my investors, Avin Gupta is the person, and we'll be happy to respond to you once again. Thank you.
Thank...
Thank you.