GAIL (India) Limited

Welcome to the Q3 FY21 Earnings Conference Call of Gale India hosted by B.O.B. Capital Markets Limited. As a reminder, all participant lines will be in the lesson-only mode and there will be an opportunity for you to ask questions after the presentation concludes. Should you need assistance during the conference call, please signal an operator by pressing star then zero on a Dutch tone phone. Please note that this conference is being recorded. I now hand the conference over to Mr. Rohit Ahuja, Head of Research and Oil and Gas Analyst at BOV Capital Markets. Thank you and over to you, sir.

Good evening, everyone. Welcome to Gail's Q3 conference call on behalf of Bob Capital Markets. It's a pleasure to host the management. From the management, we have Mr. A.K. Tiwari, Director of Finance and other senior management. I hand over the floor to Mr. Tiwari to take this forward.

Thank you. Thank you very much, Mr. Rohit and my dear friends from Investors Opportunity. A good afternoon to all and welcome to GAIL's Q3 FY21 earning calls. We have declared the results of the third quarter of the current fiscal year today and I am sure you must have be happy with the overall performance of the company. Before I get into the financials, I am pleased to inform you that the Gale has emerged as a winner in the Investors Relations Award 2020 under the category of ESG Disclosures. The award has been given by IR Society in collaboration with BSC and KPMG India based on the various parameters including feedback from buy-side and sell-side. I thank all the investors in dispensing their faith and confidence in the transparency and disclosures of GAIL. This award is the testimony of the GAIL's effort in maintaining and improving its investors' relation. We will continue with our endeavor to make our IR program one of the best in the industry. I once again thank all the investors on behalf of GAIL. I would like to inform that GAIL has also received the prestigious Golden Precinct Award of Excellence in Corporate Governance for the year 2020. This reward we are going to receive today at 5 p.m. I am also happy to share with you that the much awaited Kochi-Mangalore section of KKMDPL was commissioned in November and was dedicated to the nation by Honorable Prime Minister in January 21. With this, we have started supply of 0.8 mmHg of gas to Mangalore Chemicals and Fertilizers. Further, the 348 km Dovi-Durgapur section of GHBDPL up to Matix Fertilizer has also been completed and dedicated to the nation on 7th February 2021. The pipeline will have revival of HURL Sindhari Fertilizer Plant and will supply gas to Matrix Fertilizer Plant in Durgapur. This also supports PNG and PNG supply to 10 districts at Satra, Palamu, Kodharma, Giridi, Dhanbad, Bokaro, Hazaribagh, and Deogar in Jharkhand, and Paschim Vardhaman, Purva Vardhaman in West Bengal. The gas supply to Metix plant for commissioning is likely to start in March, and plant is likely to be on full load by April 21, leading to a gas supply of 2.47 mm CMD. The gas in HURL Gorakhpur plant has started and their pre-commissioning activities are in progress. The gas supply will go up to 0.5 mmHg by March 21 and likely to double by September 21. The other plant, namely Baroni and Sindhri, the pre-commissioning activities are likely to start in February-March 21 and commissioning by November 21. In one of the previous phone calls, few investors had suggested that the GAIL should go for buyback of shares. You are already aware that the GAIL has announced buyback at the rate of 2.5 per share with a total buyback size of 1,046 crores. In addition, GAIL has also declared interim dividends of Rs. 2.5 per share in January. Now let me give a brief insight of the company's performance for the quarter. The physical performance of the company during the quarter has improved in all segments. The COVID impact which was seen in Q1 had started to recover in Q2 and now in Q3. The impact on physical performance has been fully neutralized. All plants have attained normalcy and operating at optimal capacity utilization. There was no major shutdown of any plants and pipelines during the quarter. In fact, the petrochemical plant and LPG transmission pipeline is operating at more than 100% capacity. The gas marketing stood at 95.62 mmHg in Q3 FY21 as against 88.6 MMSCMD in Q2 FY21, increase of 8%. The gas transmission is stood at 110.35 MMSCMD in Q3 FY21, as against 106.44 MMSCMD in Q2 FY21, increase of 4%. The capacity utilization increased to 54%, as against 52%. in Q2 FY21. The polymer production stood at 233 TMT in Q3 FY21 as against 221 TMT in Q2 FY21. Increase of 6%. The capacity utilization increased to 114% as against 108% in Q2 FY21. So we can say that the FATA petrochemical plant is fully stabilized and running more than 100% capacity. Similarly, the polymer cell increased to 231 TMT in Q3 FY21 as against 224 TMT in Q2 FY21 increase of 3%. The LHC cell stood at 319 TMT in Q3 FY21 as against 297 TMT in Q2 FY21 up by 8% and the capacity utilization in the current quarter is 88% as against 81% in Q2 FY21. Similarly, the LPG transmission stood at 1,088 TMT in Q2 Q3 as against 1,058 TMT in Q2 FY21, increase of 3%. The capacity utilization was 114% as against 111% in Q2 FY21. Now I would like to give the financial highlights. There achieved gross turnover of Rs 15,386 crore in the current quarter as against Rs 13,611 crore in Q2 FY21. There is an increase of 13% mainly due to improvements in physical performance across all segments, increase in price of RLNG and increase in practicum PECM price, which is across 8,000 per metric ton. PVT stood at 1,868 crore in Q2 as against 1,551 crore in Q2 FY21, increase of 20%, mainly due to better physical performance, higher price realization of petrochemicals. Yale registered PAT of 1,487 crore in Q through FY21 as against 1,239 crore in previous quarter clocking an increase of 20%. On a nine-month basis for the period from April to December 20, the turnover declined by 24% to 41,057 crore PBT declined by 30%, 3,774 crores, and PAD declined by 70%, 2,983 crores, mainly due to having the impact of lockdown pandemic in Q1. Now let me give you some details of the segment-wise profitability. In energy transmission segment, volume and revenue has improved, The PVT is 977 crore in Q2 FY21 as against 1009 crore. As I have already told in petrochemical segment, the PVT increased to 423 crore in Q2 FY21 as against 170 crore in previous quarter. In LSE segment, the PVT has marginally improved to 283 crore in the current quarter. as against 280 crore. In natural gas trading segment, the loss narrowed to 74 crore in Q2 as against the loss of 365 crore in Q2. So on account of the better price realization in domestic market and increase in the crude and spot market, we have been able to have the better margin in gas trading segment. During the quarter, Yale received 23 LNG cargoes from U.S., 15 from Seven Pass, and 8 from DCP, as against 20 cargoes in Q2 FY21. Total 64 cargoes received up to Q2 FY21. Out of these, during the quarter, 11 cargoes were sold in the overseas market, and the rest 12 were brought to India either directly or through the estimation shop. The total 26 cargoes were sold outside India up to Q3 FY21. If you see the jail gas performance during the quarter, the revenue from operation of jail gas was 1,058 crores, as against 951 crores, increase of 11%. Similarly, the PVT increased to 87 crores, as against 61 crores. The CGD sector has shown a very sharp recovery from Q2 onwards after suffering a major setback in Q1. The total gas sales by Gale Gas increased to 4.91 mmCMD in Q3, which dies against 4.7 mmCMD in Q2. As regards the capex, this quarter Gale achieved capex of Rs.1,739 crores in current quarter as against 1,530 crores in Q2. Total capex up to Q3 is 3,670 as against the plan of 6,600 crores. And we are going to achieve this total capex of around 6,600 in this year. So far as the project performance are concerned, The GAP of Ramgandam Fertilizer and Chemicals have started and commissioning activities are in progress. Presently, RHCL is drawing GAP to the level of 1 MMXMD and which is likely to go up to 2 MMXMD by March 21. On the Pradhan Mantri Urjagang commitment, as on date is over 14,500 crores. and the actual capital till date is around 10,700 crores. We have been receiving capital grants from the government regularly and till date the total capital grant received is 4,084 crores as against the total grant of 5,176 crores. The status of the various pipeline projects are Vijaypur-Auraiya pipeline is expected to be commissioned by March 21 Sultanpur-Jajjar-Insar pipeline and Haridwar-Rishikesh-Dehradun pipeline is expected to again commission by April-May 21. Dhamra-Angul section of JSBDPL by December 21. Bokaro-Angul by December 21. Durgapur-Haldia by December 21. Baroni-Gohati by December 2021. So we are on track to complete all the pipeline projects as per schedule. Sirkakulam-Angol pipeline which is having 700 km investment of 2700 crores, we are expecting to complete by July 2022. Thamra-Aldia section 2, 40-kilometer investment of 1,200 crores, we are expecting to complete by November 22. Mumbai-Jasugura pipeline, 1,755-kilometer investment of 7,800 crores, we are expecting to complete by May 23. That pipeline infrastructure in North East States, which is 1650 kilometer at a project cost of 9300 crores are actively means every material and all procurement are being done so that is also on track after commissioning of hurl plant rhcl and completion of connectivity to matrix which has sale in the domestic market will increase by across 11 MMCNT. On the CGD front, GATE is supplying gas to all 6 CGDs with infrastructure of 49 CNG stations and across 1 lakh DPNG connections. The present flow is increasing day by day with the commissioning and with the CNG stations. We have operation of its plant has been done, has been our priority. So we have achieved zero major reportable accident during last four consecutive years. And there is no such any major reportable accident which are there. So we have given the brief introduction on the financial results and the major highlights of the company. We would be happy to clarify on any point that you may have. Over to Rohit, please. Thank you very much.