Thank you, Pari, and good day to everyone. It's my pleasure to welcome all the participants on this call as well as the Petronet LNG senior management for the first quarter FY27 result conference call.

With us, we have Mr. Saurav Mitra, Director Finance and CFO; Mr.

Rakesh Chawla, Executive Director, Finance and Accounts; Mr. Gyanendra Kumar Sharma, CGM and Vice President, Marketing; Mr.

Vivek Mittal, CGM and Vice President, Marketing; Mr. Debabrata Satpathy, CGM and Vice President, Finance and Accounts; Mr.

Vikas Maheshwari, General...

I request Mr. Saurav Mitra to deliver his opening remark.

Over to you, sir.

At the outset, let me briefly take you through our financial and operating performance for the first quarter of financial year 26 and 27. Overall, I would say it has been a strong start to the year.

While volumes were somewhat lower, we have delivered a healthy financial performance supported by commercial and operational efficiencies. On a standalone basis, profit before tax stood at ₹1,514 crore compared to ₹1,136 crore in the corresponding quarter, registering a growth of 33%.

Profit after tax was ₹1,133 crore, again a growth of 33% compared to ₹851 crore in the corresponding quarter. On a consolidated basis too, the performance has been quite encouraging.

We reported a PBT of ₹1,491 crore and PAT of ₹1,137 crore, our highest-ever PBT and PAT for any first quarter. Coming to the operational performance, Dahej, our flagship terminal, processed 192 TBTU of LNG during the quarter compared to 207 TBTU in the corresponding quarter last year and 201 TBTU in the previous quarter.

At the company level, the overall LNG volume processed was 207 TBTU compared to 220 TBTU in the corresponding quarter and 219 TBTU in the previous quarter. As far as capacity utilization is concerned, there is an important point to keep in perspective.

For the current quarter, the nameplate capacity of Dahej increased from 17.5 MMPTA to 22.5 MMPTA, the utilization numbers now reflect a significantly larger capacity base. On this expanded capacity, Dahej utilization stood at 66% compared to 92% in the corresponding quarter and 90% in the previous quarter.

Overall company capacity utilization in the current quarter was 58% compared to 76% in both the corresponding and previous quarters. If I were to sum up the quarter, the key takeaways for us is the resilience of the business.

Despite lower volumes, we have achieved 33% year-on-year growth in both standalone PBT and PAT. This reflects our continued focus on commercial and operational efficiency and our ability to deliver a strong financial performance across different market conditions.

We remain focused on carrying this momentum forward as we progress through the year. With that, I will conclude my opening remarks.

We'll now be happy to take your questions.

Thank you and very good evening, sir. Had a couple of questions.

Firstly, what you mentioned about the financial performance being strong despite lower volumes. What has also been interesting is that the mix of volumes has changed quite dramatically with term volumes declining very sharply and spot and regas volumes making the difference.

Just wanted to understand, has that same pattern been seen in Q2 so far as well? Should we basically assume that this will be the mix going forward at least till the Gulf conflict is resolved in any shape or manner?

That was my first question.

Okay. Yes, the pattern and trend continues as it was in the Q1 of this financial year till so far.

However, we expect the issues at the Gulf to resolve soon and the volumes from our long-term contract with Qatar should start immediately or as soon as possible. That's our topmost in the wish list.

Got it, sir. The second question was, sir, with respect to apparent margins in terms of how we have performed despite lower volumes.

Just wanted to understand where the margin improvement has come from, whether there is any inventory gain impact for the quarter and or is it basically that marketing margins or even the small amount of spot volumes that we did have actually helped offset the lower volumes. Just your thoughts on that.

Probal, you have actually answered both the points. There is trading gains, and also there is inventory gains.

Inventory gains are at ₹193 crore, and trading gains are at ₹301 crore. That's exactly because of the higher margin and also higher inventory valuation.

Sir, will some of that then normalize in Q2? Is that a fair way to look at it, that this kind of margin trend may not sustain for the rest of the year?

You see, to answer to your question, the trend has been that whenever there is a disparity between the long-term and the spot prices, the spot prices are too high and there is a big gap between long-term prices and the spot prices and overall throughput goes down because of that, then what happens is these trading margins kick in. Because the spot prices being high, we have some opportunities in the market to gain from the spot trading.

This can be considered, looking at the last five, six years trend, this can be considered as the business model of the company.

Understood, sir. If I can squeeze in one last question.

Any update you want to share on the last bit of connectivity for the Kochi terminal and any update you can share on the petchem plant? It will be very helpful.

Thanks.

Okay. I'll first start with the petchem plant.

The project is on schedule. Far as the connectivity with the pipeline with our Kochi terminal is concerned, as far as the latest information that we have, by the end of this quarter, it should be mechanically completed.

That is the best information that we have as on date.

Understood, sir. Thank you so much for your time.

I'll come back if I have more questions. All the best.

Hi sir, good evening. My question is related to capacity utilization.

Can we get the separate capacity utilization for both Dahej as well as Kochi terminal for this quarter? How would you expect these utilization to trend over the remaining 50 [brackets?]

? That's my first question.

The capacity utilization for Dahej was 65.6%, but please do take note that this is for the expanded capacity which got expanded on 31st of March 2026. From 22.5% [sic] MMPTA, the capacity utilization is 65.6%, and Kochi was 23.27%.

How do you expect that trajectory for the remaining 50 [brackets?] ?

You see, all this will depend on the opening up of the Strait of Hormuz. Right now, whatever capacity utilization has been told, same kind of trend is right now going on as we have told before.

Once the Strait of Hormuz opens, then you see this Qatari volumes and the volumes from that region will be available in the market. Definitely, and you can see from the volume numbers that currently also, even if that volume is not available, from the Gulf region, still more than 2/3 of that is being compensated from other parts of the world.

Once those volumes are available, definitely the capacity utilization will improve quite a bit. Just to add on to what Debabrata mentioned, that actually in this quarter the April was on the lower side, May-June things picked up.

We are actually running at the same rate at which was in May and June. This means that probably it should be better slightly.

Okay. Can I get the capex number for FY27 as well as FY28?

Capex numbers so far?

No, no, not so far, for fiscal '27 and '28.

Okay. FY27, the capex numbers are ₹9,064 crore we have budgeted.

Similar kind of number should be for FY28 as well.

Can I squeeze in one last question, which is related to gross margin? If you could just walk us through the key drivers behind this improvement, and what level of gross margin is sustainable going forward?

That's my last question.

Can you repeat the question?

Gross margin, what was the reason behind this significant improvement in the gross margin this quarter, and how it will sustain for the remainder of this fiscal? Okay.

See, that's what I had already answered to Probal's question. The gross margin improvement is because of the trading and inventory gain.

In the coming time also, if such kind of situation in the market is there whereas the spot prices are higher and higher than the long-term prices by quite a few distance, then this kind of trend could be there with the volume mix that we are seeing right now, the trading has gone down whereas our tolling volumes have gone up, and more than 2/3 has been recovered from the tolling volumes only. If this kind of trend is continued, then the gross margin will definitely show greater trading gain and inventory gain, because that is last five years' trend we have seen in these kind of situations.

That is the business model that kicks in.

Hi sir, good evening. Thanks for the opportunity, sir.

Sir, a couple of clarificatory questions. In this quarter, the tolling cargoes were brought in to offset our long-term cargoes.

Our arrangement for basically the use-or-pay for the previous years has actually been that if excess cargoes come in, then it will be used for offsetting that use-or-pay. Would this tolling cargo be treated as an offset for use-or-pay?

Because this is in excess of what probably one would have expected. It's coming in lieu of the long-term contract.

Does that the right understanding?

Nitin, you are right partly, because see, firstly we must understand it depends on who's bringing those long-term cargoes. If GAIL is bringing, they had no use-or-pay.

Then there is no question of offset against GAIL cargo. Yes, for other offtakers, if they are bringing additional cargoes, there would be some offset.

To clarify that the order of importance is the current year's commitment. After that only they can offset.

Current year commitment would basically be considered the the the higher number would only be considered after considering long-term plus tolling as current year commitment is what you're saying.

For tolling itself, see if they are bringing more in the tolling, then the order of importance is first the current year's commitment, they have to adjust that, then only any offset for the past year will be taken.

Right, sir. I'm just drilling down further on this.

Toh sir, yeh basically jo cargoes hum tolling ke liye manga rahe hain, right, wahi cargo consider kiya jayega for offsetting use-or-pay, right? Long-term contract is not a part of that arrangement, right?

Toh agar if... Yes,

yes, your understanding is correct. Long-term contract, as far as supply and send is concerned, that is separate contract where take-or-pay clauses are there, not use-or-pay.

Okay.

Okay. That's a different contract.

In a way,

is this the correct understanding that if this situation continues, then this tolling cargo which is coming in can retire the use-or-pay much faster than possibly which would otherwise have been possible?

Absolutely. Depending on, in fact, who had use-or-pay, that's the only caveat I will add.

Understood, sir. Sir, second question is the bookkeeping one, if you can give me the Ind AS impact for this quarter at gross margin, depreciation, and in other subheads, please.

At gross margin level, positive is ₹14 crore, and forex loss is ₹5 crore, and other expenses level positive ₹8 crore, then depreciation ₹66 crore, and finance cost ₹48 crore.

Understood, sir. Thanks so much, sir.

I'll get back in the queue.

Hi, sir. Thank you for doing the call.

The first question was related to Qatar LNG on a more medium-term basis. What are you kind of hearing in terms of their supply cargoes?

Obviously, it's a bit of a fluid situation, but considering the force majeure, etc., how are you kind of thinking about sourcing these cargoes from elsewhere as well as what are you hearing from Qatar in general around when can they kind of think about delivering some of these volumes?

Firstly I'll answer the second question. We are in constant touch with QatarEnergy, and they're also waiting for things to improve.

Strait of Hormuz, every day there is change of statement at geopolitical level, nobody has an answer that when the Strait of Hormuz will open. The moment it opens, if you've seen certain media reports even of yesterday that Qatar is started production, they're ramping up their production.

The measurement they are doing in terms of the heat around the plant, that level is increasing, which means production is increasing. That was a Bloomberg article yesterday.

As soon as the Strait of Hormuz is opened, we are hopeful that we will start taking volumes on FOB basis from Qatar. Mayank, your second question was, why are we not sourcing from alternate sources?

Of course, as you have seen, if we buy and then sell it, there will be certain taxation implication. Directly if offtakers or GAIL, IOC, BPCL is importing, that becomes more advantageous and more sellable in the market.

We have to be competitive in the market. From that perspective, we have given the capacity to these capacity holders to bring more volumes.

FM declaration from Qatar is on month-on-month basis. Basically every month depending on the situation, they are declaring.

Right now it's been declared for end of August.

Sure. The second question in terms of petrochemicals was what percentage of your capex has been spent on petrochemicals till now?

In terms of completion on the physical side, how much has you been able to complete that?

Okay. As I have told, we are on track with our petrochemical project, and as per the schedule, we have completed about 40%.

The capex spent would be roughly about what percentage of this?

The capex, see, there is always a difference between the capex spent and the physical progress. Financial progress is not exactly it will match with the physical progress.

That's why I have to give you a proper perspective of the physical progress of the project, I have given you the physical project number.

Fair enough. Perfect.

Thank you.

Hi sir, thanks for taking my question. One question from my end, sir.

Sir, at Dahej we had signed a contract with Deepak Fertilisers wherein they were expected to bring in additional cargoes. I think around 0.5 million ton per annum.

Have those started? Similarly, at Kochi, ExxonMobil's volumes were expected to increase.

Have those volumes also increased?

Yes. Both contracts have actually started taking place, and we have brought in volume.

Volumes have been brought in by both parties under both these contracts.

Okay. For the quarter, can you quantify how much did Deepak Fertilisers bring in?

Was it one cargo, two cargoes or how much was it? Around

two cargoes. The contract commenced in May 2026, until date, we have got two cargoes.

Understood. Also if I could ask one more question.

Any update on the tariff discussions that we've been having with our offtakers or the status quo remains?

No, the status quo is there. There is no discussion on tariff revision.

Okay. Not discussion on tariff revision, but contract renewal, nothing has happened, right?

No, no, we are still in discussion with our offtakers. We still have some time.

The new contract with Qatar is going to start in 2028, we are on almost on a daily basis we are meeting with our offtakers and finalizing the terms and conditions.

Okay. If you're saying that you're meeting regularly, can we expect the closure to happen in a quarter or two then?

Yes, you can expect.

We

can expect it to happen in the next two to three quarters.

Two to three quarters. That's great, sir.

Thank you.

Hi sir, thanks for the opportunity. Firstly, on your new purchase contract with QatarEnergy, which is coming up from 2028, I think the change

Your voice is breaking. Sorry, we can't hear you.

The new QatarEnergy contract from 2028, yeah, that it is based on DES basis rather than FOB earlier. How does it impact the landed cost of the gas?

It's a formula-driven price, which includes the shipping cost. Of course, we cannot disclose the formula, but I'm not sure what you're looking at in this question.

That change in landed cost

Sure. Thank you.

Two questions. Number one is on the capacity that you have freed up in Qatar because volumes are not coming.

How much visibility do you have of the offtakers getting volumes, and what is the logical utilization or volume that we should model for Dahej till the time this crisis continues as far as cargo processing goes? That is question one.

The second one is on the trading side. If you can explain this trading business and also the circumstances where you are profitable on your trading contracts and of course how to think about it incrementally, that will be great.

Thank you.

Firstly, let me answer on the visibility question. As you would have seen, Indian gas demand and government has been working on it to make sure that all the sectors get gas in an equitable manner.

In context of that, we do see that as the Qatar FM continues, the replacement volumes will continue to flow in at our terminal, we don't see any issue. As mentioned, force majeure is being declared on month-on-month basis, I cannot say that offtakers are now tying up volume for September, October.

They are tying up on month-on-month basis depending on the requirement and the replacement volumes, whatever is required. On the trading part, I think...

On the trading part, as we had explained before, we create efficiencies in the system and due to that, whenever there is a opportunity, either we serve it on the spot basis from these efficiencies or whenever there is an opportunity, we bring a spot cargo and also cater to the customer's need without taking the volume or price risk. In this case, as we had explained, that when there is these spot prices, say for example, very high and the long-term prices are at a different level and there is low throughput from the terminal, at that point in time, with a smaller volume of spot trading also, we can put it to bottom line taking the advantage of the market.

This we have seen since last five, six years. This is a established business model now.

Okay. Just a couple of follow-ups.

When Qatar is declaring a force majeure, now you said that the status is that till end of month, they will not supply cargoes, right? Then let's say by when do you find out that, okay, in September you won't get any cargoes from Qatar?

Then what is the next step? If you can walk me through the process, I can understand better how you are able to then talk to your offtakers and then utilize some of the freed-up capacity because Qatar is not sending you cargoes.

Firstly, we are in constant touch with QatarEnergy team. On a regular basis, we have conversations with them, and typically they are declaring force majeure at least a week before end of the month.

Okay. It's that dynamic, is that you get to know a week before the next month starts that, okay, you have free capacity.

Okay. Just to drill further on the trading gains that you make, is that linked to the spare capacity that you currently have because Qatar is not supplying or is that the run rate that you have been mentioning is that independent of the spare capacity you have in Qatar or even otherwise?

It's independent of that because if you see the spot trading, it's only 6 TBTU. For 6 TBTU or 10 TBTU of something like that of volume, we need not have a spare capacity.

Even in the aftermath of COVID, and during the Russia-Ukraine conflict also, whenever such situation in the market was there with a very low volume, we could generate a higher trading gain. I hope that answers.

Understood. Thank you very much, and all the very best.

Thanks for the opportunity, sir. Sir, what was the regasification revenue for the quarter?

How much have we spent towards the capex?

We could only hear your first question. The regasification revenue is ₹1,214 crore.

Rest of the question we could not hear. Could you repeat that?

Yeah. How much till date have we spent towards the capex?

Capex is expenditure. Till date?

679 Are you asking about the capex

spent

on petchem or cumulative?

Petchem.

For the quarter. For the quarter.

Petchem for the quarter is ₹472 crore, ₹470 crore around.

Thank you.

Hi sir. For this PP plant, has there any propane contract been signed already?

Propane, see, propane is a readily available commodity, from that perspective, I think 2027 we will enter to sign the contract. We may have a mix of Go ahead.

The sourcing will basically be mostly coming from the Middle East, right, and at how the CTP pricing?

US is also a major potential source, we are exploring all the possible opportunities.

For this project, sir, is there any equity IRR that you had given earlier? I think in 2023, the number was 30%, have you done any recalculation based on current pricing?

Bineet, as we had maintained before, we have still to do certain commercial contracts. Couple of contracts we have already done, like the 600 KTPA of ethane and this one with the Deepak Phenolics.

Then certain other commercial contracts we have to do, we have to keep these numbers closed to the public for the time being.

Sir, what will be the useful life of the plant, if I have to run the calculation for the profitability? What do you assume, useful life for the PDH plant?

This kind of projects generally people take a 25 years life.

Okay. Sir, another question on the third contract that came from FOB to DES, when you have four LNG carriers on lease.

If you have DES coming from Qatar, then what will be the use of the LNG carriers? Because I think they are for 25 years lease.

Most of the carriers, once the SPA ends, time charter comes to an end, except one.

Okay. Sir.

Thank you.

Hello, sir. Good to talk to you.

Can you confirm if my understanding of the business model is correct? As long as that force majeure continues, you have the liberty to trade gas at the spot prices.

If that force majeure goes aside and normal business kicks in, then you can again start doing business at the contracted prices. Is my understanding correct?

No, it's not. See, the contracted volumes, they come in and go to our offtaker on back-to-back basis.

The trading business is independent of that. It depends on the market opportunity, the price at which we are buying cargoes, at which we are able to sell.

As Debabrata mentioned, out of operational efficiency, we do have some LNG available, we trade that also. It is a mix of all, but it has nothing to do with Qatar contract.

Okay.

Okay. Got it.

Thank you, sir.

Hi sir, thanks for the opportunity again. Sir, just wanted to understand what are our tariffs right now at Dahej and Kochi for the current quarter?

Dahej is around ₹69, and Kochi is around ₹98.

Kochi is ₹98. Great, sir.

Secondly, sir, also wanted to understand that the vessels that we have on time charter basis, are we paying that the charter rates or that's also is under the ambit of force majeure and it's not payable? How does that work?

Your understanding is correct. That falls under force majeure.

I would like to clarify that all the time charter vessels, we have suspended the operation not under any force majeure clause, but there are other clauses in the contract, in the time charter agreements, through which we have enabled the suspension.

Got it, sir. Great, sir.

Thanks for clarification. That's all from my end.

Thanks. Thanks a lot for this opportunity.

Sir, this is quick question, sir. I hope I'm audible.

No, your voice is not clear.

Is it better, sir?

Slightly better.

[unclear]

Not audible.

Sure. I'll [unclear].

T.K. Nigam,

Hello, sir. Can you put some light on how much certainty or how much certain is the sourcing of alternative cargoes till the time this Middle East conflict continues?

Sourcing is actually being done under the tolling contracts, service contract by our customers. As per trend, whatever we are missing from the Middle East, actually more than 2/3 is being brought by these customers.

We hope that this trend will continue. We are seeing that this trend is continuing right now.

Sir. That answers my question.

Thank you, sir.

Okay. Thank you.

Thank you so much for joining us once again, and we will continue to keep in touch through such initiatives. Thank you.

Thank you. Thank you, everyone.