Thank you, Palak. Good day, ladies and gentlemen.

On behalf of Ambit Capital Private Limited, I welcome everyone to GAIL (India) Limited's first quarter fiscal '27 earnings call. Today, we have the pleasure of having with us the senior management of GAIL, led by its Director (Finance), Shri R.

K. Sinha ji.

I will now hand over the call to the management for their opening remarks, which will be followed by Q&A session. Over to you, Sinha

ji. Thank you, Vivekanand.

I extend a warm welcome to all of you, and thank you for joining us today. I also take this opportunity to thank our investors and analysts for their continued trust and engagement with the company.

For the financial year 2026-2027 began amid sharp volatility triggered by the West Asia crisis, which impacted certain GAIL volumes. The company managed the disruption through a combination of portfolio flexibility and spot sourcing while continued to support customer requirements and India's energy security.

GAIL's diversified portfolio proved to be a key strength in navigating the quarters effectively. During the quarter, the energy sector faced significant challenges arising from the geopolitical developments and supply disruption.

Before I move on to the operational and financial highlights, I would like to place on record my sincere appreciation for the entire GAIL team. Our teams worked relentlessly to ensure continuity of the gas supplies and meet customer requirements.

Their dedication, resilience, and customer-centric approach enabled GAIL to navigate the disruptions effectively while supporting India's energy security, which is reflected in the quarter's strong performance. In summary, Q1 FY '27 demonstrated the resilience of the GAIL's integrated business model with strong financial performance supported by portfolio diversification, disciplined supply management, and continued investments in strategic growth projects.

Moving to the key business highlights for the quarter. During the quarter, the entire 1,707-kilometer Mumbai-Nagpur-Jharsuguda pipeline become operational on 31st May '26, making a significant milestone in strengthening GAIL's gas transmission infrastructure.

Pursuant to the NCLT order dated 3rd June '26, Konkan LNG Limited become a wholly owned subsidiary of GAIL (India) Limited with effect from 6th July '26. This will help GAIL streamline operational more effectively, bring tax efficiency, and make RLNG sourcing more competitive.

PNGRB also authorized for the three LPG pipelines, namely, Jhansi-Sitarganj 610 kilometers, Cherlapally-Nagpur 556 kilometers, and Shikarpur-Hubli-Goa 635 kilometers was received on 14th July '26. The combined length of these pipelines is over 1,800 kilometers with estimated investment of around ₹6,700 crores spread over three years.

Moving to the performance highlights. First, we discuss about the standalone profitability.

Gross turnover for the quarter FY '27 stood at ₹38,912 crores as against ₹34,591 crores in Q4 FY '26, reflecting growth of around 12%. Supported by elevated crude and LPG prices and GAIL's well-diversified portfolio, the company delivered a robust financial performance during the quarter.

PBT stood at ₹5,773 crores as against ₹1,577 crores in Q4 FY '26. PAT stood at ₹4,292 crores as against ₹1,262 crores in Q4 FY '26.

Moving to the consolidated financials. On consolidated basis for Q1 FY '27, turnover stood at ₹41,277 crores compared to the ₹35,499 crores in Q4 FY '26.

EBITDA was ₹7,573 crores versus ₹2,703 crores in the previous quarter. PBT stood at ₹6,268 crores as compared to ₹1,966 crores in Q4 FY '26.

PAT, excluding minority interest, stood at ₹4,665 crores as against ₹1,485 crores in Q4 FY '26. Moving to the segment-wise performance and outlooks.

First, we discuss about the gas marketing. Due to the force majeure declared by PLL, volumes from the Qatar were impacted.

Additionally, from seven -- seven cargo, additionally seven cargo from other contracts were also affected during the quarter. To meet the demand gap, GAIL sourced eight spot cargo during Q1 FY '27.

Our gas marketing volume stood at 93.82 MMSCMD, comprising 8.76 MMSCMD in the international market. Favorable movement in price indexes supported the elevated marketing margin spread during the quarter.

Higher return were generated from the Henry Hub-linked and JCC nine-month-linked sourcing where the corresponding sales were not indexed on the same basis. This advantage expected to be largely short-term as the nine-month and the three-month JCC averages are expected to converge over the time, and the benefit from the index movement is likely to normalize.

In view of the continued volatility, we maintain our gas marketing guidance for FY 2026-2027 at around ₹4,500 crores PBT. We will further review and revise the guidance if required after declaration of the results for the subsequent quarters.

Moving to the natural gas transmission. Natural gas transmission volume for the quarters FY '27 stood at 122.36 MMSCMD as against 118.99 MMSCMD in the previous quarter.

The Q1 FY '27 transmission volume is broadly in line with the FY 2025-2026 with the increase primarily on account of shippers' volume, which rose by around 4 MMSCMD during the quarter. Based on the current operating trend and the Q1 FY '27 volume of 122.36 MMSCMD, we now expect natural gas transmission volume for FY '27 to be around 123 MMSCMD with the assumption that the geopolitical situation continue.

We will continue to monitor the evolving geopolitical situation and domestic demand, and will update the guidance if material changes warranted. Under the polymer business, due to the diversification of feedstock natural gas towards the priority sector in line with the government gazette notification declaring natural gas as essential commodity, polymer production during Q1 FY '27 stood at 51 TMT.

The segment incurred a loss of ₹130 crores for the quarter. At present, the plant is running at 100% capacity and we expect it is to be at the breakeven level during FY '27.

We are actively pursuing the shift of Pata petrochemical complex from natural gas to ethane as a feedstock to ensure long-term sustainable margins. Moving to the LHC and LPG transmission.

In the LHC -- in the LPG transmission segment, volume stood at 1,077 TMT as against 1,114 TMT in Q4 FY '26, down by around 3%, primarily due to disruption in the LPG import on account of the West Asia crisis. In the LHC segment, the company increased production by around 20% during the quarter from 194 TMT to 232 TMT, supported by additional allocation of domestic new well gas of approximately .597 MMSCMD.

Production is likely to remain in the range of throughput during the last year. The LHC segment reported PBT of ₹772 crores during the Q1 FY '27 as against ₹144 crores in the previous quarter and ₹489 crores in the previous financial year, aided by higher LPG prices due to the West Asia disturbance.

Moving to the CGD and GAIL Gas performance. GAIL's CGD network across six GAs comprises 217 CNG stations and 2.63 lakh D-PNG connections.

During Q1 FY '27, GAIL's CGD business added about 20,069 D-PNG connections and three CNG stations. GAIL Gas Limited, which is wholly owned subsidiary of GAIL, currently operates 16 GAs directly and 9 GAs through its JV.

During Q1 FY '27, GAIL Gas added about 16,610 D-PNG connections. As on 30th June '26, GAIL Gas held a network of 592 CNG stations and 7,93,684 D-PNG connections.

Over the next two years, GAIL Gas target to add around 275 new CNG stations and about 3.7 lakh new D-PNG connections. During the current financial year -- current quarter FY '27, turnover of GAIL Gas stood at ₹3,326 crores as against ₹3,227 crores in Q4 FY '26.

PBT increased by 3% and stood at ₹162 crores as against ₹158 crores in Q4 FY '26. PAT was up by 3% and stood at ₹120 crores as against ₹117 crores in Q4 FY '26.

Moving to the ongoing projects and capex. Pipeline projects: JHBDPL remaining section, KKMBPL Phase 2, Gurdaspur-Jammu pipeline, and C2-C3 pipeline are scheduled for completion in the current financial year.

Vijaipur-Bina pipeline, DUPL-DPPL capacity augmentation are scheduled for completion in FY 2027-2028. JLPL capacity augmentation is scheduled to be completed in July '28.

Petrochemical projects: the 1,250 KTA PTA plant at GMPL is in advanced stage of commissioning and should start production shortly. The 500 KTA PDH-PP plant is scheduled to be commissioned in the next financial year.

Moving to the other capex plan, during the Q1 FY '27, GAIL incurred a capital outlay of ₹6,176 crores, demonstrating strong progress across strategic growth initiatives. This sustained investments underscores our commitment to strengthen gas infrastructure, enhancing downstream capabilities, advancing clean energy projects, and supporting India's long-term energy transition and energy security objectives.

We remain on track to achieve our FY '27 capacity -- capital outlay guidance of around ₹11,500 crores. That concludes my overview of the quarter's performance, segment-wise outlook, and key projects.

Over to you, Mr. Vivekanand.

Hi, Mr. Sinha.

Thanks for updating your guidance on transmission as well as marketing and petchem. Just drilling deeper into the drivers of the transmission volume growth.

If you can help us understand, you had a volume of 127 MMSCMD in FY '25. Now clearly, FY '26, '27 were down years, very specific reasons.

How to think about the demand outlook beyond FY '27, considering that the government is taking multiple steps to derisk the country from the overexposure to LPG in certain sectors? Is there any change in demand outlook that you have experienced as far as the government's push is concerned?

That is my first question. The second one is on the gas sourcing side.

Some of your new contracts, particularly Vitol and ADNOC volumes, they will kick in now, right, this year. Just trying to understand in terms of your long-term portfolio, what are the incremental deals that you are planning to sign?

What would be the duration, benchmark? If you could talk about that, it'll be great.

Thank you.

Okay. Thank you, Mr.

Vivekanand. Coming to the first questions for the demand, as PNGRB has come up with a document, a paper where it has mentioned that by 2030, the total demand will be 297 MMSCMD as against currently 200 MMSCMD.

There will be increase of about 100 MMSCMD. And 100 MMSCMD will come from: first, from the CGD sector; second, from the fertilizer sector; third, one power sector; fourth, one the industries, which includes steel, aluminum, etc.

Last one is the long-haul LNG trucks. These are the area where demand will come in the future.

Moving to the second question regarding the sourcings. Right now, we have 16.5 MMTPA in our portfolio.

Earlier, our chairman has already told that we will source around 7 to 8 MMTPA by 2030, out of which we have sourced around 2.5. Rest we are working on it.

Right. Thanks for the color.

Just to help us understand, let's say, the roadmap, because the 2030 outlook now we are not very far off. Less than 3.5 years.

To understand how much of the 100 MMSCMD incremental demand will come from the various sectors, do you have any more working that you have done? Because I understand that the PNGRB had done this at a time when the market was very normal.

There was an LNG glut expected globally. The West Asian war is likely to have changed many things here.

In your view, what do you think is the now perhaps updated demand projection that you are working with and you believe is plausible in, let's say, FY '28 and FY '29?

Basically, based on the current situation, we have not revised our volume. We are totally relying on PNGRB's published figure.

Certainly, there will increase. I have already told about the CGD sector where the growth is around 10% to 12%.

Currently, it is around 45, 46 MMSCMD. By 2030, as per the PNGRB, it will increase to 80, 85 MMSCMD.

Second one, in the fertilizer sector, there will be around 10 to 12 MMSCMD growth will come by 2030. Third one is the power sector.

Currently, we are consuming in the power sector around 25, 26 MMSCMD. It will increase to 30, 35 MMSCMD.

In the other segments, I've already told you the long-term haul truck haul or steel and cements, the growth will be happened in these sectors.

Right. Thank you very much, sir.

Palak, you may open the Q&A queue now. Thank you.

Thank you, sir, and congratulations on a strong set of numbers in a challenging environment. Just had a couple of questions.

Number one, obviously trading has surprised positively in terms of the margin performance, and yet if we look at the guidance of ₹4,500 crore, what we are implying, therefore, is that there is a very steep decline in terms of the quarterly run rate if we look at what we have already achieved in Q1. How should we look at it, sir?

Is this just excessive prudence at this point of time and there's almost a decent probability of further upward guidance? Or is there a huge normalization that can happen when the JCC three-month linkage actually kicks in and converges to the nine-month number?

Just if we can understand a little bit more.

See, Probal, I think you have rightly pointed out this. We have been telling this in earlier quarterly calls also that JCC index contract, which is for 2.8 -- 2.4 MMTPA, it is on nine-month Brent.

It is on Japanese Crude Cocktail, but roughly it is same as dated Brent. It is covering nine-month average, and that too with a lag of two months.

Whereas our all the downstream sales are on three-month dated Brent. There has been in earlier years also cash flow differences have been there, which are getting normalized over a longer period of time.

What we believe that this time in this quarter, there was abnormal jump in the Brent index numbers, which contributed to very high realization in terms of sales, and that has contributed significantly. Definitely much of it will get cured within the year, that's what we understand.

However, it depends on the level of dated Brent in the coming months, which is depending on so many international factors.

Got it, sir. Sorry to harp on this again, but another significant part of our trading portfolio is the 21 MMSCMD or 5.8 million ton of Henry Hub-linked gas.

There, sir, it's very clear that Henry Hub prices are continue to be at a discount to Asian LNG prices. That advantage will still sustain.

There is nothing specifically one-off about that phenomenon. Obviously, the differential may narrow a bit.

Is it fair to assume that that advantage will continue to sustain for us for even the rest of the year?

No, again, that depends on the levels of Brent index and the Henry Hub index in the remaining months. Of course, we are continuously striving to hedge certain volumes of the exposure which we are having on the cross index.

As far as Henry Hub is concerned, roughly half or slightly less than half goes on back-to-back index, and another maybe 20% goes for our own consumption in Pata. The cross index, whatever is available, is not a very high number.

Yes, definitely, that is in a sweet spot right now. That contributes positively to our top line and bottom line.

Got it, sir. The second question was about the LPG business where you mentioned the additional allocation of 0.6 MMSCMD.

In terms of production run rate, should we assume that the production run rate that we've achieved in this quarter, that will safely be maintained for the rest of the year? What was the average pricing that we saw for our realizations in this quarter?

The average price during the last quarter, it was around ₹90,796. Moving to the production side, basically, we have allocated additional .597 MMSCMD.

Earlier we had allocation of about 1.32. Total our allocation is around 1.9.

Based on the 1.9, we will able to produce what we produced during the last quarter.

Understood, sir. I will come back for more questions.

Thank you so much and all the best.

Thanks for an opportunity and congratulations for the great set of numbers, sir. Few questions on the petrochemical part of facility.

What was our average gas cost for the petrochemical during the quarter? What gas price do we expect petrochemical operating profit will come into the positive side?

During the last quarter, the average price of petrochemical landed price was $10.54 per MMBtu.

Sir, any guidance that at what price we will be profitable on the petrochemical side? At what gas cost?

If around $13, $14 landed price and selling price is around ₹1,30,000, there will be no profit and loss.

Sir, next related to Usar and GMPL again. As you mentioned, the Usar is going to start next year and GMPL very soon.

Could you give a approximate timelines when these projects will be a fully commission, that's one. Secondly, when it start contributing to the EBITDA?

On a safer side, will it be a second half of FY '28, or will you give us a will you give us a guidance on the FY '29 side, a full profitability will reflect in FY '29? Basically,

we have not worked out profit for the FY 2027-2028 for the GMPL and PDH-PP. Certainly, our GMPL plant is under commissioning and production will start very soon.

Regarding the PDH-PP plant, this plant as per the timelines, it should be commissioned by June '27, but it will take another six to seven months, and it may be completed by December '27.

Last question on the PNGRB action plan 2027. Sir, they have mentioned promotion of transport and the competition in the gas infrastructure.

Under this paragraph, PNGRB has mentioned that unbundling of functions and creation of an independent transport system operator. What we understand, recently the gazette publication has canceled the unbundling of the GAIL transmission and the trading segment.

Can you just give us a little bit clarity on this topic?

Basically, in the year 2014, PNGRB came up with the clause 5A for the unbundling of GAIL. Unbundling means any entity which are in the transmission and marketing business has to separated with effect from 1st April '27.

For this, we were went in the court, and the case is still pending. Recently, PNGRB had withdraw the clause 5A from their regulation.

As right now, there is no obligation for unbundle for the entities which they engage in the gas transmission and gas marketing.

Okay. Then what will be the role of TSO, sir, transport system operator, independent TSO?

See,

TSO will examine the third party. Basically, in any pipeline, we have 25% for the third party, open access.

They will monitor the open access quantities.

Thanks a lot, sir, and all the best.

Thank you.

Hi. Thank you for the opportunity.

I have two questions. Firstly, in the gas transmission business, for system use gas, do we get HPHT gas or you have to rely on spot LNG?

That's my first question.

Basically we are using HPHT gas. We had already purchased HPHT gas in the past, we are using same gas.

Currently, we are using HPHT that was earlier awarded through biddings. It is available.

Going forward, the PNGRB have come out with a regulation where three-year long-term sourcing, at least three years or more, has to be done for procuring the gas for the SUG purpose.

Understood. Any thoughts on that?

Have we planned our sourcing for the next three years? See,

we are examining that and definitely SUG is a must for operating the pipeline, we'll be planning that soon.

Understood. Lastly, on Dabhol LNG plant, when will the heating system be installed?

Secondly, will it be fair to assume that all the incremental deal on sourcing side will be brought to Dabhol LNG for regasification?

The ambient heating system will be completed by next year, by June '27.

Okay.

What is your next question?

The next question was that will it be fair to assume that the incremental deals on the sourcing side, all the volumes will be brought to Dabhol LNG for regasification? As you mentioned, 7 to 8 MMTPA you're targeting by 2030, and you have already sourced 2.5.

Generally, all the deals are having West India optionality available with GAIL where we can change the port or destine the port. Definitely, we'll endeavor once the terminal is fully ready to use as much as available slot as possible.

Thank you, sir, and all the best for the future.

Good evening, and thank you for the opportunity. On the Henry Hub LNG, I believe a lot of it is back-to-back contracted.

Just wanted to understand what percentage of it is still open and how much is in the contract for long terms now?

I think this has been answered a few minutes back in another question. What I said, we have a roughly portfolio of 21 MMSCMD on Henry Hub.

Out of which, around half or slightly less than half is contracted back to back. Another 20% goes for our own internal consumption in petrochemical complex.

Remaining maybe 25% to 30% is available for sale in Brent contracts. That is available on cross index, and we are time-to-time hedging and lock in the margins for this cross index basis risk.

Given the high differentials right now between the two, between Henry Hub-linked and Brent-linked, is it fair to say that at least in second quarter or the near term, the margins that you capture from this open-ended volumes will still be quite high then?

Amit, sir, Pata plant was partly operational during quarter one. It started in the mid of May.

Now and only it was operating on 50% load. Now Pata is fully operational on 100% load.

The volume which is designated for Pata will be consumed in Pata. We will have less arbitrage available to play with HH.

Got it. Still, given that petchem prices are also very high, in that case, then the same margin will now get captured in petchem to that extent?

We cannot be so sure of petchem prices. It will anyway be determined by the market forces.

Price has already softened if you compare with the previous quarter.

Sure. Got it.

That's it from me. Thank you.

Thank you so much. Hi, sir.

Thanks, sir. Thanks a lot for the call, and many congratulations on a great result.

Now, sir, I just wanted to get your sense on this gas marketing. You said that ₹4,500 crore is basically what you're targeting on a PBT level for the whole year, and you've done about ₹3,600 crore in the first quarter.

Now I also understood you said that this is linked to Brent, dated Brent. Now assuming, sir, Brent is averaging around, say, $90 or between $80 and $90 even in the second quarter, how do you basically think this gas marketing number should look, because that's a very big moving part in the results, right?

Because if you see on a total PBT of ₹6,500, that is ₹3,600. If you can help understand on that, then they'll get a better sense on numbers on gas marketing.

Sir, secondly also, on the LPG, you've reported ₹772 crore versus ₹205 crore. Now that is also quite a high number.

Do you also see this ₹700 crore-plus number sustaining for the balance of the other quarters, sir?

Moving to second questions regarding LPG, the price of LPG during the last quarter, it was around ₹90,796. Price has already softened during the current quarter.

Certainly, there will be decrease in the LPG profitability. Regarding input side, we are using some portion of the APM gas, the price is around $7, and we are using some new well field gas.

The gas price is around $12 to $13. Based on these situations, whatever we earn profit during the last quarter, certainly this profitability will decrease during the current quarter.

Regarding the gas marketing profitability, we reported around ₹3,353 crores at PBT level. We have already explained earlier that our total guidance during the current year, it is around ₹4,500 crores.

If any change will happen in the coming days, we will come up with the revised guidance.

Thank you so much, sir, for that. Just one thing, sir, this ₹4,500 crore has been a number which is long spoken of since the last two, three years.

Do you think that it's more or less going to remain around here, or at some point, you're going to see a very sharp acceleration in those numbers?

The situation is very volatile. Keep moving.

It's changing every day. The the results, extraordinary results that we got in quarter one is due to JCC and JCC nine months and three months arbitrage that we got.

Over long run, these averages are going to converge. Second quarter, the JCC nine months average, it it will reflect the current Brent prices to some extent.

The margins are going to shrink as we go forward. The same kind of margins that we earned in quarter one may not be available in quarter two, and if Brent goes down significantly, we may we may lose on that numbers because the three months Brent three months will start reflecting a lower number than our sourcing.

Sure. Thank you, ma'am.

That's helpful. Thank you.

Good afternoon, sir, and congratulations on stellar set of numbers. Two questions.

First is on the transmission side. I think the expenditure on the transmission side is quite low if we adjust for the one-off which was done in Q4.

Was there anything specific during Q1?

In the last quarter, there was provision of ₹111 crores. Basically, provision has reduced from ₹111 crores to ₹11 crores.

The total cost has decreased mainly due to the provision.

There was no change in gas sourcing mix for that transmission business?

No

one-offs there? Fair enough.

Second question is on your fertilizer plant. These are all assured projects, right, in terms of 12% to 16% IRR, which I think the government has also stated.

They will always be profitable, or is there some risk of cost overshooting and you are not able to make that much money? Is there any risk or it's a fixed return business, the fertilizer capex?

Basically, yesterday Ministry of Fertilizer has published the new urea policy for the investment. We are going for the two fertilizer plants.

One is the Maharashtra, another is the Chhattisgarh. These all the plants are under active evaluation.

Whenever we finalize our DFR and investment decisions, we'll come inform you with subsequent.

Got it, sir. Thank you so much and all the best.

Sir, I had a bigger picture question around how you have used the energy shock of the last quarter to improve your market share in marketing, specifically. Is there something that you can tell us about, because this has been a volatile time and your portfolio around gas sourcing has been helpful.

Is there a way you can quantify in terms of long-term market share that you'll be able to gain because of this energy shock?

Mayank, can you repeat your questions? Basically, we are not hearing.

Can you hear me now?

Yes, sir. It is okay.

Okay. I was basically asking in terms of your long-term market share on marketing on natural gas.

How have you used the last quarter of shock, considering you had a good portfolio of sourcing, to increase your market share or more medium-term, are you able to get more longer-term customers because of the shock and your ability to kind of supply the gas during these times?

Yeah. Mayank, this Middle East war, though it has given a lot of lessons for the country, but definitely one lesson has come out very startingly that the country's dependence on LPG is very much loaded on the Middle Eastern countries, whereas natural gas portfolio for the country is much more diversified.

For the energy security of the country, it is very important and even in the longer run, this message will continue that LPG has to be replaced in a very, very projectized manner with natural gas, whether it is for cooking, whether it is for industrial segments and whatever segments. Yes, that has given a big boost and the government, the Ministry of Petroleum is also pushing very hard for more and more PNG connections for the homes and even in the industrial customers, whether they are in the ambit of CGDs or large industrial customers otherwise on natural gas pipelines, which used to earlier use LPG, they are all now coming up for tying up natural gas for their energy requirements.

It is a big boost for the natural gas in the longer term.

Then specifically, sir, because you have been losing market share on the marketing side versus your transmission volumes if you look at the gap has been widening over the years. Is that gap that you can close over the next few years because of this or no?

Definitely, it will help improve and one of the reasons for that, whatever factor you are saying, is the growth in the CGD sector where many of the CGDs, sometimes they are sourcing on their own. As far as the pipeline transmission network, it is GAIL being one of the biggest pipeline transmission network owners, transmission volumes will continue to benefit.

From the volume growth in CGDs, we can understand that there has been substantial growth in industrial and commercial connections because those INC customers, they are avoiding LPG now, they are taking new connections. In coming quarters, we'll see that growth coming up.

I think just the last question on Jharsuguda pipeline. How much volumes you think you can be going through this pipeline over the next couple of years?

An impact on tariff overall, if at all any?

Currently, it is around .5 MMSCMD and this will increase further. Basically, we are discussing in the Jharsuguda sides.

There are a lot of industry in the Jharsuguda, certainly they will consume gas in the coming days.

One or two years is a very small period, so many CGDs are there, they will gradually ramp up. The most important thing is our two fertilizer plants which we are working on.

If they are approved, then they may take another three, four years. That will be a big boost on the volumes on that pipeline.

Okay. Thank you.

Hi, sir. Thanks for the opportunity.

I have a couple of questions. Firstly, on the gas trading side, was there any one-off like in the last quarter, there was a provision of ₹6.7 billion odd and I think you told that this could be reversed in the coming quarter.

Was this reversed in this quarter?

No, this has not been reversed in the current quarter.

So And

There is no one-off in the current quarter,

yeah. Understood, sir.

Secondly, on the LPG LHC business, I understand the domestic gas volume that you're getting is around 1.9 MMSCMD. Can you give a breakup of how much of it is APM price, how much is new well gas price?

1.12 is the APM gas, and rest is the new well field gas.

Sir. Henry Hub gas that you're sourcing from the US, you said around 20% goes to petchem plant and if the same gas is sold on Brent-linked pricing to some other customer, the margins will be much higher.

Just trying to understand, are you better off to probably use this gas to be sold to some other customer rather than using it as a petchem feedstock?

Basically, we are in the petrochemical since 1999, we have a market, we have a customer. We have to produce, we have to run our petrochemical plants at the certain level.

We have a Henry Hub gas around 21 MMSCMD, and our ED (Marketing) had already clarified in details how much we are selling on the back-to-back basis, how much we are selling on cross index, and how much we are consuming for internal consumption.

Okay. Sir, one last question on LPG realization.

Usually when I compare this realization with Saudi contract price, it is largely in line, but this quarter, there was a large divergence. Is it because of there is much higher spot premium over Saudi contract price because of whatever is happening in the Middle East?

Also did you add in a higher logistics cost or anything else which could explain this price difference? Basically,

during the last quarter, the average crude price was around $96, $97. Based on these crude prices, the price of the LPG has increased.

Price is being fixed based on the Saudi Aramco indexes.

Sir. Thank you.

All the best.

Hi, sir. Good evening and congratulations on very strong set of numbers.

Thanks for the opportunity. A couple of questions from my side.

We have number of projects which are commissioning over this year and next year as well. How do we look at depreciation and interest?

If you can give us some guidance on the run rate for depreciation and interest going forward on either annual or quarterly basis?

Basically, during the previous quarter, we have already reviewed our life of the pipelines and the petrochemicals. Based on the current life of 40 years and 35 years for the petrochemicals, the depreciation will be around ₹3,200, ₹3,300 crores in the coming years.

Even after the commissioning of new pipelines, that is the broad hat, right, sir? Also, we have petchem project commissioning as well in next year.

GMPL will be commissioned very soon, and PDH-PP plant will be commissioned during the next year.

Right, sir. If we include all of that, then how would this ₹3,200 crore number move?

Any sense on that?

Basically, the depreciation rate for the petrochemicals, it is around 4%. You can calculate total PDH-PP cost is around ₹11,256 crores.

Around ₹440 crores Additional impact will be ₹312 crores for PDH-PP plant.

₹312 crore, sir. Got it.

On the interest side?

Currently, the interest, just hold on. Total finance cost for the current quarter was around ₹310 crores.

You can calculate for the yearly basis, it will be around ₹1,200, ₹1,300 crores on yearly basis.

Understood.

And Tell me,

yeah. I was saying that currently, you would be capitalizing the interest on the debt on the plant, right, sir?

That will get expensed later when the plant is commissioned. How would the interest run rate look?

Basically, total plant cost here around ₹11,000 crores, and based on the 60:40 something, total loan of the PDH-PP around ₹6,000 crores. So ₹6,000 around into 7, करीब ₹440 crores.

Total

finance cost will increase by around ₹440 crores on yearly basis.

₹440 crore. Got it, sir.

Yeah. Sir, and second question was on marketing margin.

While you did explain the gap between nine-month and three-month JCC contracts, which led to the widening of margins, but you would have sold a lot of spot cargoes in this quarter as well to make up for lost cargoes from Qatar, right? How was the marketing margin on those cargoes if you can give us some sense either in percentage of the price terms or in dollar per MMBtu?

See, during this wartime, we have been trying to manage the volumes for our customers also. We have purchased a lot of spot cargoes during this turmoil period, which are at that market price for us.

Ultimately, we have used a mix of both strategies to keep the customers supplied and also trying to protect our margins. One more factor which was playing out in this quarter was though the prices were high, the power sector, the peak in power, especially during the summer months and during the evening hours, that consumption was substantial.

Sometimes the summers are mild, but this year, the monsoon has been deficient, even though the spot prices were high, the power plants did consume a lot of spot gas.

Would it be fair to assume that you were able to make reasonable margins on the spot cargoes as well?

That's right.

Last question, sir, just a clarificatory one. JCC sourcing is nine-month with a two-month lag.

How is the supply contract? Does it also have a lag or how does it work?

Suppose if a consumer is buying in August, what is the three-month Brent that we'll have to look at for understanding the price that it will be?

Immediately three preceding months, whereas the sourcing side is nine months with a lag of two months.

Got it, sir. Thank you so much, sir.

That answers all my questions. I'll get back in the queue, sir.

Hi, sir. Thanks for taking my questions.

Firstly on gas transmission, because of the thing that you just mentioned of power having sudden demand during the seasonal demand jump that power saw, is it fair to assume that current gas transmission volumes will obviously be not that high that we saw in the last quarter, and it's come off?

I have already told you that during the current year, you can assume around 123 MMSCMD.

Okay. I understand that, Sinha sahab, but does that include some kind of normalization due to that the normal supply, etc., gets normalized, and that demand might also be very price-sensitive part?

If there is a sudden spike or collapse in LNG price, all of that can be more sensitive, right? That's what I wanted to understand that as that summer season-related supply has gone, has that led to some kind of a cool-off in demand?

No,

basically in the summer season, particularly in the month of August and September, power sector consume gas. Similarly in the month of December, January, power sector consume gas.

Based on all the factors, we have calculated the total figure of around 123 MMSCMD.

Would this figure change materially if say for some reason, maybe due to European filling of LNG, if there is say a significant spike by $3, $4, would that demand figure change materially or do you think that this is not that price-sensitive?

If changes happen materially in the coming year, certainly we will come and inform you in the subsequent quarters. Right now, we don't foresee for any material change.

Based on the current situation and we accept in the coming situations, the gas transmission volume will be around 123 MMSCMD.

Sinha sahab. Just one more thing.

Basically, LPG gas trading, you've just explained that obviously there'll be a period of catch-up because a lot of gains have been booked due to the benefits of the lag in this particular quarter. Similarly, for petchem and LPG production, can I argue that like you said because prices have cooled off from those very high levels that profitability in the current quarter would not be as good as the profitability in the first quarter?

Is that a fair way of looking at things?

Basically, during the last quarter, the price of petrochemical was around ₹1 lakh -- just hold on, ₹1,46,000 per metric tonne as compared to the ₹98,000 per metric tonne

Quarter 4.

Similarly, in the LPG, the price realization of the LPG is around ₹90,796 as compared to 54. There was increase of around ₹36,000 per metric tonne.

The main reason for increase in the profitability of the LHC mainly the price, increase in the price.

Plus production

we have increased by 20%.

Since those prices have cooled off, profitability for both of these segments will also be not that high.

Will get impacted in the coming quarter.

Profitability of gas trading as well as petchem as well as LPG production, all three of them will see some kind of a decline from where things are in the first quarter, right?

It is right assumptions.

Okay. That's all my questions.

Thank you so much.

Sure. Thanks for the follow-up opportunity.

My question is a bit broader on how the government is thinking about the policy framework post this crisis. Before the crisis, the government was promoting the sector a lot and also coming up with frameworks that could make it very easy for you to execute projects.

Now we see that there is an increased push towards D-PNG as a segment. Are there any other major changes that you see from the government side that make you believe that the PNGRB Vision 2030 of gas consumption increasing to close to 300 MMSCMD could become a reality?

Are there any policy actions which perhaps we would have missed, which are happening behind the scenes that are likely to be a tailwind for the sector? Thank you.

See, government is also pushing on gas storage as a strategic energy security measure. Of course, it is being thought very seriously, but it may not give the impact so fast.

Definitely, the intent is very much there and seriousness is there. Also then coal gasification projects are being promoted by the government.

There are policies which are incentivizing those kind of projects. All these are the measures which the government is taking for increasing this gas usage.

Then of course, compressed biogas was always on the front radar of the government and probably some even better schemes are likely to come in near future, but we have to wait for the schemes to get published.

Sure. Okay.

Just as a follow-up, is the government pushing you to take up more long-term gas sourcing or say look at alternate feedstock like ethane, and also perhaps explore sourcing more from the US because India has a trade negotiations with the US where the government has committed to buying a significant amount of energy from the US in the years to come?

As GAIL, we are always on the lookout for sourcing from all parts of the world, and wherever we get a better deal, we will go by it. As has already told by Director (Finance) earlier, we had a sourcing roadmap for up to 2030 up to 7 MMTPA, of which 2.5 we have already done.

We'll continue to scout all the indices and all the geographies.

Sure. Thank you very much for your time.

Now I would hand the conference back to you for closing comments. Sinha ji, if you would like to say something in closing, it'll be great.

Thank you.

Thank you, Vivekanand. I have tried to get all your questions, and if any questions, please inform to our IR cell, Anjana ma'am is looking after IR activity.

Please email to Anjana ma'am. Thank you so much.