Financial Performance Highlights

Q2 FY 2026-27 Performance:

  • Standalone net profit: ₹1,881 crore
  • EBITDA: ₹3,210 crore
  • Throughput: 4.18 MMT (against quarterly peak of 4.5 MMT)
  • Fuel and loss: 9.86% for H1 (compared to ~11% earlier)

Year-over-Year Comparison:

  • Q2 net profit increased nearly three times from ₹639 crore in Q2 previous year

Half-Yearly Performance (H1 FY 2026-27):

  • Net profit: ₹2,796 crore (compared to ₹2,367 crore in corresponding H1 previous year)

Capital Structure and Returns

Dividend Declaration:

  • Interim dividend: ₹3 per share
  • Total dividend payout: ₹526 crore

Debt Reduction:

  • Borrowings reduced by over ₹5,000 crore in six months
  • Borrowings stood at ₹9,245 crore as of September 2026
  • Debt-equity ratio improved from 1.01 (March 2026) to 0.55 (September 2026)

Operational Updates

Crude Sourcing Strategy:

  • Diversified crude sourcing due to Middle East disruptions (West Asia conflict affecting Strait of Hormuz supplies)
  • Q2 crude mix: Domestic crude (~25%), term contracts (~20%), spot purchases (balance)
  • Russian barrels comprised 32% of Q2 basket (vs. 28% in Q1)
  • Increased sourcing from West Africa, Americas, Middle East, and Russia
  • Freight costs elevated to $7-9 per barrel range (from $3-4 previous quarter)
  • Emphasis on DAP cargoes to mitigate sourcing uncertainty

Retail Operations:

  • 257 retail outlets across Karnataka, Kerala, Tamil Nadu, and Andhra Pradesh
  • Half-yearly retail margin remained marginally negative
  • Targeting 500 retail outlets by FY28 end

Strategic Developments

Joint Venture Formation:

  • ONGC Petrochemicals Marketing Limited (OPML) formed with ONGC (50%), OPaL (25%), and MRPL (25%)
  • MRPL investment: ₹12.5 crore
  • Purpose: Marketing of petrochemicals and related products to enhance business, improve logistics, warehousing, grade optimization, and customer management

Pipeline Authorization:

  • PNGRB granted authorization for petroleum and ATF pipeline from Devanagonthi to Bengaluru airport
  • Expected completion: 2029-30
  • Estimated cost: ₹200 crore+

Regulatory and Recognition Matters

International Credit Rating:

  • Fitch International assigned BBB- (Stable) rating
  • Rating at par with sovereign rating and comparable with peer companies and OMCs

Tax Dispute Resolution:

  • Closed long-pending reformate classification dispute
  • Received refund of ₹212 crore

Awards:

  • Won two National Innovation Awards at 29th Energy Technology and Innovation Meet (ETM 2026)

Incident and Contingencies

Fire Incident:

  • Occurred on September 30, 2026, at Coker Hydrotreater Unit (CHTU)
  • Under active investigation
  • Reconstruction commenced with restoration targeted by mid-December 2026
  • Provisional exceptional loss booked: ₹118.76 crore (against estimated replacement value of ~₹225 crore)
  • Assets adequately insured
  • Q3 throughput expected to be close to Q2 levels with marginal product mix impact

Management Commentary and Outlook

Market Conditions:

  • Challenging refining industry environment due to geopolitical situation in West Asia
  • Squeezing of assured Middle East supplies, longer voyage times, and increased freight/insurance costs
  • Company following "nation-first" approach, ramping up LPG supplies by cutting polypropylene production

Capital Expenditure:

  • FY 2026-27 capex expected: ₹1,200-1,500 crore
  • Includes refinery maintenance, revamping, and small-value IRR projects including retail projects

Product Strategy:

  • Focus on serving domestic market first
  • Retail sales growth of 50% YoY in Q2 due to private OMC curtailment
  • Direct marketing growth of 30-40% YoY
  • Solvents business growth of nearly 100% YoY, reaching 10 TMT per month
  • Limited exports (15% of quantity basis in H1) with focus on domestic market

Operational Targets:

  • Throughput and product supplies at peak levels technically possible
  • Specific energy consumption improvement target: ~9.5% (currently below 10%)
  • Grid power project expected to be fully available by financial year end

Technical Specifications

Product Flexibility:

  • Swing capability between ATF and diesel exists
  • Can switch products monthly depending on crude type
  • Constraint is sourcing of appropriate crude

Intermediate Processing:

  • Evaluation of VGO and high sulphur fuel oil as intermediate inputs
  • No processing of these feedstocks in past six months
  • Constant market evaluation and contact with other refineries