Investors’ and Analysts’ Meet - Hindustan Petroleum

1 QuestionsMumbaiJuly 8, 2016 HPCL Investors and Analysts MeetQuestions2 Investor & Analyst Meet, MumbaiDisclaimerTheinformationcontainedi nthismaterialhavebeenobtainedfromsources believedtobereliable,butnorepresentation orwarrantyexpressorimplied, ,norepresentationorwarranty(expressorimp lied)ofanynatureismadenorisanyresponsibi lityorliabilityofanykindacceptedbytheCom panyoritsdirectorsoremployees,withrespec ttothetruthfulness,completeness,accuracy orreliabilityorotherwisewhatsoeverofanyi nformation,projection,representationorwa rranty(expressedorimplied) ,howsoever, ,reproduced,copied,published,distributed ,shared, ,invitation,solicitationoradvertisementi nanyjurisdictionwithrespecttothepurchase orsaleofanysecurityofHPCL andnopartorallofitshallformthebasisoforb erelieduponinconnectionwithanycontract, , ,anddonotintendto,updateorotherwiserevis eanystatementsreflectingcircumstancesari singafterthedateofthispresentationortore flecttheoccurrenceofunderlyingevents, & Analyst Meet, MumbaiOrigin of HPCLO rigin in Private Sector Blend of Private & Public Sector ExpertiseIncorpora-tionof Standard Vacuum Oil Refining Company (StanVac)

2 Incorporation of Caltex Oil Refining taken over by ESSOC ommission-ingof Lube India of ESSO and Lube India to form HPCLM erger of Caltex undertaking in India into HPCLM erger of Kosan Gas Company into HPCL1952195519621969197419781979 Questions4 Investor & Analyst Meet, MumbaiGlobal Rankings# 327# 133 Questions5 Investor & Analyst Meet, MumbaiHPCL Fast facts : 2015-16 NOC -Govt. of India (GOI) holding equity NavratnaPSU Since January 1999 India s 6thLargest companyby Turnover Largest lube oil refinery in India Annual Gross sales of Rs1,97,744 crore Net Profit of Rs3,863 crore Market Capitalization of Rs.

3 26,601 crore10489220142660131st Mar 1431st Mar 1531st Mar 16 Market Cap (Rs crore)Government of India, Institutions, / OCB, , Funds, , , , of 30thJune 2016 Questions6 Investor & Analyst Meet, MumbaiHPCL Fast facts : 2015-16 Highest combined GRM of $ bbl. among PSUs 21% market share in Petroleum Sales (PSU Category) Highest Market Sales Growth amongOil Marketing Companies (PSU) Company in total lubricant sales in India 2ndLargest LPG marketer in India 2ndLargest Retail Outlet Network 2ndLargest Product Pipeline Network2459257230152013-142014-152015-16 Pipeline Network (Km) GRM in $ & Analyst Meet, MumbaiRatingsBBB-/StableBaa3/Positive At par with the sovereign rating of IndiaQuestions8 Investor & Analyst Meet, MumbaiRefiningMarketingBusiness Portfolio Mumbai:Fuels ( MMTPA)& Lubes (428 TMTPA)Refinery Visakh.

4 Fuels ( MMTPA)Refinery Green R&D Centre, Bengaluru 6 Cross country pipelines Operation thru M/s Prize Petroleum , a wholly owned subsidiaryJVs & SubsidiariesE & MMT ** Annual Sales in 2015-16#Current Active blocks3015 km6 Blocks#RetailLPGD irect SalesAviationOperations & DistributionNatural Gas & RenewablesPartnerships in Refining, Marketing Infrastructure, Biofuels and EmulsionsQuestions9 Investor & Analyst Meet, MumbaiPerformance : 2015-16 Market Sales : MMTM arket Growth : (Domestic) Vs PSU Thruput : MMTP ipeline Thruput : MMTI ndia s Lube Marketer : 536 TMTH ighest ever PAT of Rs. 3,863 Crore during 2015-16 Questions10 Investor & Analyst Meet, Thruput (MMT)Snap shot of 2015-16 Performance Sales (MMT) Thruput (MMT)6%7%18% Bottling (MMT)9%Questions11 Investor & Analyst Meet, MumbaiSnap shot of 2015-16 Performance 2733386302000400060002014-152015-16 Net profit (Rs.)

5 Crores)41% (Rs. per share)41%7076406006507007502014-152015-1 6 Interest Cost (Rs. Crores)-9%Questions12 Investor & Analyst Meet, MumbaiSnap shot of 2015-16 Performance 1499492102000400060002014-152015-16 Consolidated Net profit (Rs. Crores)228%16022183561400016000180002000 02014-152015-16 Net Worth (Rs. Crores)15% (Rs. per share)41%Questions13 Investor & Analyst Meet, MumbaiDebt -Equity Mar 2013 Mar 2014 Mar 2015 Mar 2016 Debt -Equity RatioLong Term Borrowing10,27815,78918,13617,448 Short Term Borrowing23,51116,3772,2003,889 Net Worth13,72615,01216,02218,356(Rs. crores)QuestionsRefiningQuestions15 Investor & Analyst Meet, MumbaiRefining CapacityVisakh Refinery Mumbai Refinery HMEL Bathinda Refinery (JVC)Rights for Marketing of Petroleum Products from HMELR efineryCapacity (MMTPA) (JVC) Refinery (Mumbai) 428 TMTPAS take in HMEL.

6 Stake in MRPL : & Analyst Meet, MumbaiCrude 1979-801989-901999-002009-102014-152015- 16In MMTHPCLHMELA verage GRM for HPCL during 2015-16 is US $ per & Analyst Meet, MumbaiRefineriesVisakh RefineryMumbai Refinery Salient Features & Measures Coastal Refineries on East & West Both Refineries are ISO 14001 Certified Pipeline connectivity for Mumbai High Crude at Mumbai SPM at Visakh Refinery for discharging VLCCs Additional Crude Storage Capacity at Visakh Crude Cavern Robust LP Model for Optimized crude selection Product evacuation thru cross country pipelines (~85%) BS III / IV Production facilities for MS & HSD Integrated Effluent Treatment Plant & Rain water harvestingQuestions18 Investor & Analyst Meet, MumbaiRefineriesDescriptionUoMMumbai RefineryVisakh RefineryHPCLC rude utilization%123111116 GRM $ (FY 2015-16)Questions19 Investor & Analyst Meet, MumbaiRefinery Highlights.

7 2015-16 Highest ever refining throughput of MMT with a capacity utilization of 116% Recorded highest ever production of MS ( MMT), HSD ( MMT), LOBS (423 TMT) & Bitumen ( MMT) Commissioned underground crude cavern facility with MMT storage capacity at Indian Strategic Petroleum Reserve Ltd, VisakhapatnamVisakh RefineryMumbai Refinery Commissioned Tail Gas Treating Unit (TGTU)in the Sulphur recovery Unit Trains at DHDS for reduction of SOxcontent in the tail gases. Commissioned Flue gas scrubber unit (FGSU)at FCCU for reduction of SOxemissions and Suspended Particulate Matter Implemented Isothermingtechnology for energy efficiency enhancement and improving HSD qualityQuestions20 Investor & Analyst Meet, MumbaiProfitability Improvement MeasuresInitiativeImpactOptimized MS block operations Increased MS production in lieu of NaphthaLubeOil Upgradation Project at Mumbai RefineryIncreased production of valued added lubricantsSPM atVisakh RefineryDischarging of Very Large Crude Carrier (VLCC)

8 Robust LP modelOptimizing Crude selection FCC with Cat Cooler at Mumbai RefineryConversion of Fuel Oil to value added productsCDU II Revamp at Mumbai RefineryIncreased crude processingFlare gas recovery systemsHydrocarbon Recovery from FlaregasesCrude Cavern Storage at Visakh Flexibility in Procurement & Processing of Crude OilPower Purchase thru Open AccessReduced operating expenditureImplementation of Isotherming technologyImproved energy efficiencyQuestions21 Investor & Analyst Meet, MumbaiGreen R&D centre: Bengaluru Land: 120 Acres Built up area: 3 lakh sq. ft. Phase 1 : Capex Rs. 395 croreQuestions22 Investor & Analyst Meet, MumbaiResearch and DevelopmentGreen R&D Centresat Bengaluru & VashiPatentsAppliedObtainedResearch Areas36-Lubricants62 FocusareasInfrastructure DevelopmentSupport to Refining/MarketingFunctionsCollaborative ResearchProduct / process Development Opportunity Crudes Residue Up-gradation New Process Developments Catalyst Development Alternative EnergiesR&D Thrust AreasQuestions23 Investor & Analyst Meet, MumbaiR & D.

9 2015-16 Highlights DevelopedHP Next Gen transmission oilEP 80W for TATA motors Kayaba 17 Replacement of imported KAYABA product at Gabriel for highend car segment Winter Diesel Commercial supply started after 6 years of development Ch-4/CI-4 10w40 for JCB exports models RR 813 as common oil for Indian Railways Lithium Complex grease for Visakh Steel Plant replacing imported productQuestionsMarketing Questions25 Investor & Analyst Meet, Mumbai2015-16 : Consumption of Petroleum ProductsProduct wise Industry volumesTotal Volume = 177 MMT, 5year CAGR = (%)42%12%11%13%6%16%HSDMSLPGN aphtha, ATF & SKOFO & BitumenOthers*Note: FY 2010-11 is base year for 5 Year CAGRP roductsMMT5Y CAGR % , ATF & Bitumen11( ) & Analyst Meet, Mumbai2015-16 : Sale of Petroleum Products by HPCLP roduct wise HPCL volumes Total Volume = MMT, 5year CAGR = (%)50%16%15%7%8%4%HSDMSLPGN aphtha, ATF & SKOFO & BitumenOthers*Note.

10 FY 2010-11 is base year for 5 Year CAGRP roductsMMT5Y CAGR % , ATF & SKO2( )FO& Bitumen3( ) & Analyst Meet, MumbaiHPCL Market Sales in MMTQ uestions28 Investor & Analyst Meet, MumbaiHPCL Sales : 2015-16 RetailLPGI ndustrial and Consumer (I&C)AviationLubesHPCL Business lines67%14%1%15%2%1%Volumes by Business Lines ( 2015-16)RetailI& MMTHPCL Total Sales = MMTQ uestions29 Investor & Analyst Meet, MumbaiRetail Outlets, 13802 LPG Distributors, 4278 SKO/LDO Dealerships, 1638 CNG Outlets, 223 Lube Distributors, 216 CFA -97 Customer Touch PointsLPG customer base of Crore Households Questions30 Investor & Analyst Meet, MumbaiMarketing Highlights 2015-16 Recorded best ever physical performance Market MMT Domestic Growth : Market share gain : Sale of RLNG.