💰 Financial Performance

Revenue Growth by Segment

Consolidated operating income declined 10.6% from INR 66,385.7 Cr in FY2024 to INR 59,356.0 Cr in FY2025. Standalone sales for the quarter ended June 2024 were INR 17,095 Cr, a 3.5% decrease from INR 17,720 Cr in March 2024. Compounded sales growth over 3 years stands at 11%, while the trailing twelve months (TTM) shows a 5% contraction due to moderation in product crack spreads.

Geographic Revenue Split

The company primarily caters to the South Indian market, with IOCL buying over 90% of CPCL's output to meet regional product requirements. Specific percentage splits for other regions are not disclosed, but the strategic focus remains on the southern region of India.

Profitability Margins

Operating Profit Margin (OPM) fluctuated significantly, recorded at 11% in Sep 2023 but dropping to 4% by June 2024. Net Profit Margin (PAT/OI) fell from 4.1% in FY2024 to a thin 0.3% in FY2025. Gross Refining Margin (GRM) was impacted by inventory losses, falling to $4.22/bbl in FY2025 and further to $3.22/bbl in Q1 FY2026 (including a $1.95/bbl inventory loss).

EBITDA Margin

OPBDIT/OI (EBITDA Margin) saw a sharp decline from 6.9% in FY2024 to 1.9% in FY2025. This 500 basis point drop was driven by the moderation of international product crack spreads and inventory losses of $0.06/bbl in FY2025 compared to gains in previous cycles.

Capital Expenditure

Planned investment for the 9-MMTPA Cauvery Basin Refinery JV is INR 3,000 Cr (CPCL's 25% share of the INR 36,354 Cr to INR 38,830 Cr project). As of March 31, 2025, INR 1,322 Cr has been invested. Annual maintenance capex is projected at INR 200-250 Cr, with additional outlays for value-added projects like LOBS upgrade.

Credit Rating & Borrowing

Maintains a 'CRISIL AAA/Stable/CRISIL A1+' rating. Interest coverage ratio moderated to 4.5x in FY2025 from 20.1x in FY2024 due to lower profitability. Total debt stood at INR 1,920 Cr as of September 30, 2025, following repayments of ~INR 1,400 Cr.

⚙️ Operational Drivers

Raw Materials

Crude oil is the primary raw material, accounting for the vast majority of input costs. Other inputs include additives for lubricating oils.

Import Sources

Majority of crude oil is imported from the Middle East. Approximately 30% of sourcing comes from 'opportunity crudes,' which have been predominantly Russian crudes over the last two years due to available discounts.

Key Suppliers

Sourcing is primarily managed through parent company Indian Oil Corporation Limited (IOCL) via pooled crude oil procurement to leverage bulk purchase benefits.

Capacity Expansion

Current installed capacity is 10.5 MMTPA at the Manali refinery. A 9-MMTPA expansion is planned at the Cauvery Basin Refinery (Nagapattinam) through a JV with IOCL, with a Commercial Operations Date (COD) expected by April 2029.

Raw Material Costs

Raw material costs are highly sensitive to international crude prices and INR-USD parity. Inventory levels of ~40 days make the company vulnerable to price fluctuations; for instance, an inventory loss of $1.95/bbl was recorded in Q1 FY2026.

Manufacturing Efficiency

Refinery ran at full capacity in FY2024 with no major shutdowns. FY2025 saw lower efficiency due to planned Maintenance & Inspection (M&I) shutdowns of primary and secondary units, which increased startup/shutdown costs.

Logistics & Distribution

Distribution is largely handled by IOCL, which buys 90% of the output. CPCL is also entering the direct retail segment with 300 planned outlets starting FY2026 to improve distribution margins.

📈 Strategic Growth

Expected Growth Rate

11%

Growth Strategy

Growth will be driven by the 9-MMTPA Cauvery Basin refinery expansion, increasing petrochemical intensity to 6% (Polypropylene), and upgrading Naphtha/HSD to high-margin Group-II and III Lube Oil Based Stocks (LOBS). The company is also diversifying into the retail marketing segment with 300 branded outlets over 5 years.

Products & Services

LPG, Motor Spirit (Petrol), Superior Kerosene, Aviation Turbine Fuel (ATF), High Speed Diesel (HSD), Naphtha, Fuel Oil, Lube Base Stocks, Bitumen, Paraffin Wax, Hexane, and Sulphur.

Brand Portfolio

CPCL (for specialty products and upcoming retail outlets), IOCL (for primary fuel marketing).

New Products/Services

Group-II and Group-III Lube Oil Based Stocks (LOBS) and Polypropylene from the new refinery JV. Retail fuel marketing is a new service segment starting FY2026.

Market Expansion

Expansion of retail footprint in South India with 300 outlets starting FY2026. The Cauvery Basin project targets increased petrochemical yield to capture value-added segments.

Market Share & Ranking

Major refiner in South India; specific national market share percentage not provided but strategic importance to IOCL is highlighted.

Strategic Alliances

Joint Venture with IOCL for the Nagapattinam refinery where IOCL holds 75% and CPCL holds 25% equity.

🌍 External Factors

Industry Trends

The industry is shifting toward petrochemical integration to offset volatile fuel margins. India remains dependent on oil imports, but there is a long-term shift toward net-zero goals, with CPCL targeting 2046 for carbon neutrality.

Competitive Landscape

Competes with other domestic refiners, though the 90% offtake agreement with IOCL and strategic location in Tamil Nadu provide a protected market share.

Competitive Moat

Moat is built on high Nelson Complexity (10.03), which allows processing of cheaper, heavy crudes, and a guaranteed offtake agreement with IOCL. This is sustainable as long as IOCL maintains its dominant market position in South India.

Macro Economic Sensitivity

Highly sensitive to global crude oil prices and the INR-USD exchange rate. A weakening rupee increases the cost of imported crude, while global demand shifts affect crack spreads.

Consumer Behavior

Increasing demand for value-added products like lubricants and petrochemicals (Polypropylene) is driving the shift in refinery configuration.

Geopolitical Risks

Geopolitical tensions (e.g., Russia-Ukraine) impact crude availability and pricing. Russian crude currently provides a cost advantage but remains subject to international sanctions and trade shifts.

⚖️ Regulatory & Governance

Industry Regulations

Subject to tightening environmental and safety regulations. Margins are influenced by import duty differentials on crude vs. finished products.

Environmental Compliance

Targeting net-zero carbon emissions by 2046. Compliant with BS-VI fuel specifications. ISO 27001:2022 certified for Information Security Management.

Taxation Policy Impact

Effective tax rate is approximately 27% as of the June 2024 quarter.

⚠️ Risk Analysis

Key Uncertainties

Volatility in international crude prices and crack spreads can swing PAT from INR 2,708 Cr to INR 155 Cr (as seen between FY24 and FY25). Project execution risk for the INR 38,830 Cr Cauvery Basin refinery could impact future credit metrics.

Geographic Concentration Risk

High concentration in Tamil Nadu/South India for operations and sales.

Third Party Dependencies

Critical dependency on IOCL for 90% of revenue and the majority of crude procurement.

Technology Obsolescence Risk

Risk of long-term decline in fossil fuel demand; mitigated by shifting focus to petrochemicals and high-grade lubricants.

Credit & Counterparty Risk

Receivables quality is high due to the primary counterparty being IOCL (a Maharatna PSU).