C P C L — Q4 FY26 earnings call

Call held 24 Apr 2026

Management summary

CPCL delivered a record-breaking operational and financial performance in Q4 FY26 and for the full fiscal year, achieving its highest ever crude throughput, distillate yield, and LPG production. The company reported strong GRMs, significantly above benchmark, and reduced its debt-equity ratio. A record dividend of INR 62 per share was declared. Management acknowledged ongoing geopolitical and crude price volatility but expressed confidence in its operational agility and strategic initiatives, including significant capex plans for LOBS expansion and retail outlets.

Highlights

  • Highest ever crude throughput of 11.71 MMT for FY26, equivalent to 112% of installed capacity, breaking previous records.

  • Q4 FY26 crude throughput of 2.93 MMT, also 111% of installed capacity, demonstrating agility in operations.

  • Achieved best fuel and loss of 7.73%, best MBN of 69.8%, and best EII of 84% for FY26, driven by energy conservation and operational reliability.

  • Recorded highest ever production levels of 5.139 MMT for diesel (HSD) and 1.318 MMT for petrol (MS), with a distillate yield of 79.1%.

  • Highest ever LPG production of 447 TMT, surpassing the previous record of 404 TMT.

  • FY26 GRM of $9.2 per barrel and Q4 GRM of $13.75 per barrel, consistently at a premium to Singapore benchmarks.

  • Debt-equity ratio improved to 0.18 (gross) and 0.09 (net), with net borrowings at INR 973 crores.

  • Total dividend for FY26 reached INR 62 per share (INR 8 interim + INR 54 final), the highest ever.

Concerns

  • Uncertainties due to logistical constraints and volatility of crude oil prices continue to pose challenges.

  • Geopolitical events, including the Strait of Hormuz closure, caused short-period disturbances to 30-40% of Middle East long-term crude contracts, though suppliers assured commitments.

  • Analyst concern regarding potential negative cracks on diesel and ATF due to export duties, though management stated export is an optimization option and not a compulsion.

Key financials

2 periods

Q4 FY26

  • Crude Throughput
    2.93 MMT
  • GRM
    13.75 $/bbl
  • Core GRM
    10.3 $/bbl
  • Forex Loss
    ₹200 Cr

FY26

  • Crude Throughput
    11.71 MMT
  • GRM
    9.2 $/bbl
  • Distillate Yield
    79.1%
  • LPG Production
    447 TMT
  • Capex
    ₹856 Cr
  • Forex Loss
    ₹350 Cr

What they filed

Q1 FY27: revenue up 84.8%, net profit up 1884.2% against the same quarter last year.

₹ Cr · quarterly
Line itemQ2 FY25Q3 FY25Q4 FY25Q1 FY26Q2 FY26Q3 FY26Q4 FY26Q1 FY27
Revenue12,087 12,925 17,249 14,812 16,327 +35%15,683 +21%16,817 −3%27,369 +85%
EBITDA-675 242 785 99 1,144 +269%1,478 +511%2,036 +159%1,555 +1471%
Net profit-629 10 450 -57 732 +216%987 +9770%1,400 +211%1,017 +1884%
How to read this

₹ crore, as filed. The percentage beside a figure is the change against the same quarter a year earlier — never the quarter before, which would make every seasonal business look like it collapses and booms each year.

Capital allocation

high confidence
  • Capex ₹856 Cr
    • LOBS Group 2 & 3 project ₹1,600 Cr
    • Retail outlet project ₹400 Cr
    • Normal annual capex ₹500 Cr
    During the current year, the capex was INR856 crores as compared to INR673 crores in the previous year. Some of the important projects that we'll be taking up is Group 2, Group 3 LOBS for which all approvals are in place and the project execution has started in full swing. Even our retail outlet endeavor for which we had taken 300 licenses has started. And this year, that is '26-'27, we'll see a lot of commissioning out of them. LOBS project, Group 2, Group 3 LOBS project is INR1,600 crores. The retail outlet project is INR400 crores. So that makes it INR2,000 crores. This INR2,000 crores will happen over 2 to 3 years. Besides, every year, you can assume another INR500 crores is our normal capex.
  • Debt Gross ₹1,900 Cr · Net ₹973 Cr
    Our leverage position now stands at 0.18. Our debt equity stands at 0.18 at a gross level as compared to 0.39 last year. Again, that tells us that our borrowings have subsided significantly. And then for our future projects, the company possesses a significant capacity to borrow and implement profitable schemes. On a gross basis, the borrowings are INR1,900 crores, but on a net basis, it is less than INR1,000 crores, to be precise, INR973 crores. If we consider net borrowing, the debt ratio is only 0.09, which is less than 0.1.
  • Dividend ₹54/share (final)
    During the year, for the first time, CPCL paid an interim dividend, and we are happy to announce that in addition to the interim dividend of INR8 per equity share of INR10 each, the Board has recommended a final dividend of INR54 per share, taking the total dividend for the year to INR62 per share, which again is highest ever.

Guidance & targets

Capex

  • LOBS Group 2 & 3 Project Cost Capex · over 2-3 years · High confidence INR 1,600 crores
    LOBS project, Group 2, Group 3 LOBS project is INR1,600 crores.

    — Rohit Kumar Agrawala

  • Retail Outlet Project Cost Capex · over 2-3 years · High confidence INR 400 crores
    The retail outlet project is INR400 crores. So that makes it INR2,000 crores. This INR2,000 crores will happen over 2 to 3 years.

    — Rohit Kumar Agrawala

  • Normal Annual Capex Capex · every year · High confidence INR 500 crores
    Besides, every year, you can assume another INR500 crores is our normal capex.

    — Rohit Kumar Agrawala

Capacity

  • LPG Hexane Capacity Capacity · current · High confidence 60

    Previously 30 → 60

    So if you can help us how much it was and how much currently we have in terms of...? It was 30, now the capacity is 60.

    — Rohit Kumar Agrawala

  • LOBS Group 2 & 3 Capacity Addition Capacity · future · High confidence 250,000 KTPA
    My new unit will take me to a 250,000, 250 KTPA in Group 2, Group 3 capacity, and that will be a fresh addition.

    — Rohit Kumar Agrawala

Throughput

  • Throughput Utilization Throughput · FY27 H1 · Medium confidence 110-111%
    First, reply to you, in the first 6 months, we don't see any M&I. So it may not be there. But yes, maybe close to September, October, we have a scheduled M&I of one of our refinery units. So these throughputs will be dependent on that.

    — Rohit Kumar Agrawala

What to watch in Q1 FY27

Low-cost debottlenecking study completion

in the coming year, '26-'27
Current Study ongoing
Target Study completed, potential for additional capex identified

Why it matters

This study could lead to new low-cost capex projects that enhance capacity and margins, impacting future profitability.

But in the coming year, '26-'27, we hope that ongoing study will get completed. And if we find out some low-cost capex, today, that is not part of our plan, that will be in addition to whatever I have told.

Risks & concerns

  • Logistical constraints and crude oil price volatility

    medium

    These broader factors may drive volatility, but CPCL focuses on controllable aspects like operational efficiency.

    Management acknowledged

  • Geopolitical events impacting crude sourcing

    medium

    Geopolitical events, including Strait of Hormuz closure, caused short-period disturbances to 30-40% of Middle East long-term contracts, though suppliers assured commitments.

    Management acknowledged

  • Impact of export duties on diesel and ATF margins

    low

    Analyst questioned if cracks were negative after export duties; management stated export is an optimization option and the duty is part of realization, not a separate negative impact.

    Analyst downplayed

Q&A highlights

6 direct
Crude Sourcing Strategy (Spot vs. Term Contracts) Direct
No. Our term contracts are intact, and barrels are flowing out of our term contracts. But yes, there have been some impact, which has been made good by spot. But when we look forward, all our term contract suppliers are reassuring ourselves that all the commitments will be honoured by them. ... I told normally our term is 55 to 60%. There is not a major variation now.

Clarifies the company's reliance on term contracts (55-60%) despite geopolitical challenges, indicating stability in sourcing.

Asked by Yogesh Patil

Impact of Export Duties on Diesel/ATF Margins Partial
Export is not a compulsion to me. Export is one of the options available to me to optimize my margins and realization. So main products like HSD, MS we evaluate all available markets and realizations. And then whatever mix and combination is best profitable for the company, those kinds of things we do. So, for compulsion, we are not booking anything on export. ... See, to my understanding, the export duty on that cess is part of the realization, part of the broad crack, and it is not higher than the crack.

Analyst questioned if export duties made diesel/ATF cracks negative. Management explained export as an optimization tool and that the duty is part of realization, not a separate negative impact, suggesting profitability is maintained.

Asked by Yogesh Patil

Confidence in Maintaining Elevated Throughput in FY27 Partial
First, reply to you, in the first 6 months, we don't see any M&I. So it may not be there. But yes, maybe close to September, October, we have a scheduled M&I of one of our refinery units. So these throughputs will be dependent on that. ... this company is also trying to look into some of the possibilities, low-cost debottlenecking. ... And can we sustain even higher margins than this?

Analyst probed the sustainability of record throughput. Management linked it to operational efficiency and future M&I, indicating potential for continued high utilization but with a caveat for planned shutdowns.

Asked by Nilesh Ghuge

Refinery Transfer Price (RTP) and Discounts to OMCs Direct
No, our agreement, as you would be aware, close to about 90% of our product, mostly HSD, MS, goes to Indian Oil. We have a tie-up with them, we've a long-term agreement with them for selling. And the agreement is at RTP, that is refinery transfer price.

Confirms that CPCL sells its products to Indian Oil at the Refinery Transfer Price (RTP), clarifying pricing mechanism and dispelling notions of discounts.

Asked by Nilesh Ghuge

Core GRM and Forex Loss Figures Direct
10.3 $/bbl would be the core GRM. ... For the quarter, it would be for the quarter, it is approximately INR 200 crores. And for the whole year, it will be around INR350 crores.

Provides specific financial details for core GRM and forex losses, which are important for financial modeling and understanding profitability drivers.

Asked by Sabri Hazarika

Crude Mix Geographical Breakdown Direct
I will say let me start with India. Maybe India would be around 10%, including Bombay High and others. Around 25%-30% may be from Russia, and the rest would be mostly Middle East countries, with about 5% to 10% from Africa and U.S. crudes.

Offers insight into the company's diverse crude sourcing strategy, highlighting the mix from various regions, which is crucial for assessing supply chain resilience.

Asked by Sabri Hazarika

Share Capital and Potential Bonus Issue Direct
your share capital has remained, sir, at a very small level, INR148 crores. Are we not wanting to reflect correctly our share capital by capitalizing the bonus shares and giving out to the investors. So that is, I think, one question which remains in my mind when we have a significant reserves of almost INR11,000 crores? ... the Board and the right decision will be taken.

Analyst questioned the low share capital despite high reserves, prompting management to confirm that a bonus issue will be considered by the Board at an appropriate time, signaling potential future shareholder rewards.

Asked by Nalin Shah

Low-Cost Debottlenecking Initiatives Direct
So I felt there is a sustainable additional capacity. But if you want to sustain and realize higher value, you need commensurate secondary capacity along with primary capacity. That commensurate secondary, we are doing a study. The study is not yet complete. But in the coming year, '26-'27, we hope that ongoing study will get completed. And if we find out some low-cost capex, today, that is not part of our plan, that will be in addition to whatever I have told.

Highlights management's proactive approach to identifying low-cost capex opportunities to enhance secondary capacity and sustain higher value, with a study expected to complete in FY27.

Asked by Nirav Jimudia

3 min read 6 chapters

Detailed narrative

Record Operational Performance and Efficiency

CPCL achieved its highest ever crude throughput of 11.71 MMT for FY26, representing 112% of installed capacity, surpassing the previous best of 11.64 MMT. Q4 FY26 also saw strong performance with 2.93 MMT throughput, 111% of capacity. The company recorded its best fuel and loss of 7.73%, best MBN of 69.8%, and best EII of 84% for the fiscal year, attributed to effective energy conservation and improved operational reliability. Distillate yield reached a record 79.1%, exceeding the previous record of 77.6%.

Strong Refining Margins and Product Mix Optimization

The Gross Refining Margin (GRM) for FY26 stood at $9.2 per barrel, significantly outperforming the Singapore benchmark of $5.83 per barrel. For Q4 FY26, the GRM was $13.75 per barrel against a Singapore benchmark of $8.70 per barrel, with a core GRM of $10.3 per barrel. This consistent premium is due to continuous optimization of refinery production, product distribution, and efficient crude procurement. CPCL also achieved its highest ever production of 5.139 MMT for diesel, 1.318 MMT for petrol, and 447 TMT for LPG.

Strategic Crude Sourcing and Flexibility

CPCL maintains a flexible crude-sourcing mechanism, securing 55-60% of its crude through long-term agreements and the remainder on a short-term basis from diverse sources. This strategy allows the company to enhance flexibility and capitalize on price economies. The crude mix includes approximately 10% from India, 25-30% from Russia, and the rest primarily from Middle East countries (including Iraq), with 5-10% from Africa and the U.S. The company processed 52% high sulfur crude during the financial year, adapting to market conditions.

Capital Expenditure and Growth Projects

Capex for FY26 was INR 856 crores, an increase from INR 673 crores in the previous year. CPCL has initiated two significant projects: the LOBS Group 2 & 3 project with an outlay of INR 1,600 crores and a retail outlet endeavor with an investment of INR 400 crores. These projects, totaling INR 2,000 crores, are expected to be executed over the next 2-3 years, with commissioning anticipated in FY27 for retail outlets. The LOBS project aims to convert lower value-added products to higher realization products, and the new unit will add 250,000 KTPA in Group 2, Group 3 capacity.

Robust Financial Health and Shareholder Returns

The company significantly improved its leverage position, with a gross debt-equity ratio of 0.18, down from 0.39 last year. Net borrowings stood at INR 973 crores, resulting in a net debt ratio of 0.09. For FY26, CPCL declared its highest ever total dividend of INR 62 per share, comprising an interim dividend of INR 8 and a final dividend of INR 54. Management also indicated that a bonus issue would be considered by the Board at an appropriate time, given the significant reserves of INR 11,000 crores.

ESG and Governance Achievements

CPCL achieved an S&P Global ESG score of 60 for 2025, ranking as the second highest in the oil and gas sector in India. The company was also conferred the Gold Shield award from ICAI for excellence in financial reporting, underscoring its commitment to strong governance and sustainability practices. These achievements reflect continuous efforts in energy efficiency, fuel and loss reduction, and value-added product development.

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