GAIL (India) Limited

Ladies and gentlemen, good day and welcome to the Gale India Limited Q1 FY22 earnings conference call hosted by ES Securities. As a reminder, all participant lines will be in the listen-only mode. And there will be an opportunity for you to ask questions after the presentation concludes. Should you need assistance during a conference call, please signal an operator by pressing star and zero on your touch-tone telephone. Please note that this conference is being recorded. I now hand the conference over to Mr. Nitin Tiwari from Yes Securities. Thank you and over to you as well.

Thank you, Karuna. Good evening, ladies and gentlemen. On behalf of Yes Securities, I welcome everyone to Gear India Limited's first quarter FY22 earnings call. Today, we have the pleasure of having with us the senior management team from Gear India Limited, led by Director of Finance, Sri A.K. Tiwari. I will now hand over the call to the management for their opening comments, which has been followed by a question and answer session.

Over to you, sir.

Good afternoon, my dear friends from investors and analyst communities connected through WebEx. A very good afternoon and welcome to the Gales Earnings Call Q1 FY22. Thank you all for taking your precious time and showing keen interest in the results and performance outlook of CAIL. We have declared the results of the first quarter and the year 2021-2022 earlier today, and I am sure that you must have got the opportunity to go through it. I will give you a very brief insight of the company's performance for the quarter in this 30 June 2021. Due to localized restrictions and lockdowns imposed by the various state governments to curb the impact of second wave of COVID-19, the demand in certain pockets were slightly impacted in the quarter as compared to the March quarter. However, the performance is much better as compared to Q1 of the last financial year when we witnessed a nationwide lockdown. I will share about the physical performance for the Q1 FY22 versus Q4 FY21. Gas marketing stood at 95.95 mmHg in Q1 FY22, as against 91.37 mmHg in Q4 FY21, increase of 5%. The natural gas transmission is to that 107.66 mmHgMd in Q1 FY22 as against 109.75 mmHgMd in Q4 FY21 decrease of 2%. The capacity utilization decrease to 52% in Q1 FY22 as against 53% in Q4 FY21. Polymer production stood at 133 TMT in Q1 FY22 as against 224 TMT in Q4 FY21, which is decline of 41%. The decline was mainly attributable to the maintenance activities during the quarter. The plant is now running at full capacity and we are confident to achieve 100% production capacity on a full year basis. The polymer cell stood at 138 TMT in Q1 FY22. Similarly, the LHC cell stood at 250 TMT in Q1 FY22, and LPG transmission stood at 1023 TMT in Q1 FY22. Now, I would like to give the financial highlights. Gale achieved Gross turnover of 17,352 crores in the current quarter as against 15,472 crores in Q4 FY21. Increase of 12%, mainly due to increase in the natural gas marketing volume, higher natural gas prices, higher LHC prices, which is around 2,500 per metric grams. and higher petrochemical prices, which is around $4,500 per metric ton. However, this was partly set up due to the lower sales quantity and polymer and marginal reduction in the natural gas transmission volume, which I have already explained. The profit reported stood at $2,064 rose in Q1 of 2022, and as against 2,612 crores in Q4 FY21. The gas marketing segment has shown a robust performance which increased to 33%. Pivity was 1,530 crores in Q1 FY22 as against 1,908 crores in Q4 FY21. I will talk about the consolidated financial results Q1 versus Q4 FY21. The turnover in Q1 FY22 is 17,551 crores as against 15,677 crores in Q4 FY22. The PVT was 2,540 crores as against 3,219 crores. 2,138 crores as against 2,487 crores. During the quarter, Yale received 23 LNG cargo from US, 14 from Tabin Pass and 9 from DCP as per the cargo plan. The total 15 cargoes were sold in the overseas market and the remaining were brought to India either directly or through destination swap. On CGB front, Gale is supplying gas to all six CGBs with infrastructure of 80 PNG stations and more than 1,36,000 DPNG connections with a cumulative capacity of 832 crores. Gale Gas, which is a 100% subsidiary of Gale, During Q1 FY22, the cross turnover stood at 1,200 with 12 pros. If you talk about the CapEx plant, we have, as I have already informed a number of times that we have in the coming four to five years, we have around 8,000 kilometers of pipelines which are there. and around including the and subsidiaries, which are associated with , and around 40,000 crores of the cathodes which are there. So these cathode plants are being achieved mainly on the various pipeline projects. Angol Pipeline, 744 kilometers with an investment of 2,700 crores. And the completion is July 22. pipeline, 240 kilometers, investment of 1,200 crores. Completion is November 22. pipeline, 1,755 kilometers, investment is 7,800 crores. pipeline process in the Northeast state, 1,650 kilometers, investment 9,300 crores. 4 km is already commissioned. And Dhamra Angul, Bokaro Angul, Gurga Purhaldiya, Baroni Guwahati, all these pipelines which are there are under active execution plan and we are doing. So far as Pradhan Mantri, Urjaganga pipelines are concerned, our total commitment is 14,916 crores. and our actual capex is around 11,600 crores. We have been receiving the capital grant from the government on a regular basis, and since then, we have received the capital grant of 4,487 crores. As I have already told, GAIL, along with the JV, is executing various pipeline projects of 8,000 kilometres, entailing around 38,000 to 40,000 crores. So far as the CSR plants are concerned, various programs on health and sanitization, education, skill development, so we are doing more than 2% of our profits on the CSR projects. Our plants have run safe and we have ensured that the safe operation is there. We have zero major reportable incidents during the last four years, and we are monitoring our HSE performance regularly, and all our efforts are being taken. We are also taking various initiatives on the digitization, which has satisfaction to the employees as well as the vendors. customers, contractors, suppliers, and all, including our retired employees. So we are having various initiatives for satisfaction or for taking care of the stakeholders through our various initiatives. And we have also taken various measures during this pandemic situation and taking various welfare measures to our employees as well as to our retired employees. So that way, 360-degree stakeholder management we are trying to have. And this was a brief introduction on the financial results and major highlights of the company. I will be happy. My team is here. I will be happy for your questions. And we will be happy to do the slide for that. Over to you.

So we can take the Q&A now, the question and answer session?

Sure, sure, yes.

Yeah, thank you. Thank you very much. Ladies and gentlemen, we will now begin the question and answer session. Anyone who wishes to ask a question may press star and 1 on their touch-tone telephone. If you wish to remove yourself from the question queue, you may please press star and 2. Participants are requested to use handsets while asking a question. Ladies and gentlemen, we will wait for a moment while the question queue assembles. Thank you. The first question is from the line of Prabol Sain from Centrum Broking. Please go ahead.

Thank you very much, sir, for your time.

Am I audible, sir? Yes, yes, sir. Please go ahead. Yeah. Sir, on the PETCHEM, you mentioned that despite obviously the decline that has happened in this quarter, you are confident of achieving full capacity utilization for the full year. Just wanted to understand, does that imply that for the full year, we should still assume overall volumes to touch close to 800,000 tons despite the shortage in this quarter, sir? Yes, sir. See, every year there is an annual maintenance plan. which we normally take after close of the account here, April, May or June. So, in the month of April, we took the opportunity of this pandemic situation and we also closed our, means we had our maintenance also, regular maintenance also. And that way we completed our maintenance. That's why the production was less. But, We are more than 100% confident to achieve more than 100% of the plant production. Got it. That's very useful. The second question was with respect to transmission volumes. Obviously, we have seen, as you mentioned in the first comment, that the lockdown did impact demand in certain pockets. And there was a small QOQ decline that we saw in volumes for this quarter. Earlier, if I remember, sir, you had given guidance of around, I think, 5, 6, 7 CFD improvement in overall numbers for FI22. Do you think there is a need to revise that guidance, sir, as of now? No, no. Actually, what happened, our own volume was up, but the volume which are being transported by other entities was less. So, that was the reason of the volume. Otherwise, the performance that way the transmission segment was good. So against 104 odd MMHCMD that we saw did in FY21, we still maintain a broad guidance of around 110, 111 average levels for 22. It will be more than that because our own volumes are getting increased with the upcoming of fertilizer plants which are already there and which may consume gradually the volume of around 8 to 12 mmHg. So that is going to add the volume, not only in the transmission segment, but also in the trading segment. So we are confident to achieve more than 100 times. Great. And so one last question, if I may. On the trading front, obviously the numbers continue to do better given what we have seen of, you know, spot LNG prices versus U.S. prices. So in this quarter, that is Q2, I'm saying that trend has improved even more. Is that a fair way to look that profitability should continue to expand even more from the current quarter level for the trading segment?

It will be much better. Yes.

Hello. So the participant is current participant is moved out of the queue. We'll move to the next question. That's on the line of Amit Rasaghi from UBS. Please go ahead.

Sir, congratulations for such a strong performance despite a very tough operating environment. My question pertains to any update on the fertilizer plants if you have taken and what is the volume we will do in the Urjaganga project in this year and next year? See, in the Urjaganga pipeline project, our Sindhri, Gorakhpur, these fertilizer plants which are coming up. The volume growth will be around 8 to 10 mmHg in a gradual manner. And commissioning of these Gorakhpur plants and Sindhri plants and other plants are actively being planned. So in this financial year, it will be 8 to 10 mmHg growth will be there. Okay. And sir, when spot energy prices are touching $14, you think that it hurts our pectin profitability as well because we import a lot of natural gas as a feedstock for the petrochemical business. And do we get any benefit of higher petrochemical, higher LNG prices in our trading business right now? Are we like booking more volumes for the next year or do we have any cargos to be sold for this year? So number one question is your petrochemical pricing are concerned. So we do not, we are not dependent on the spot means cargos or spot prices. We have portfolio, mixed portfolio, and which are better for the petrochemical plants, we supply the gas of that portfolio only. So that way, we have, as you know, we have US volume, we have Gatcom, we have Spot also. We have so many sources. So that way, we optimize and we also have that portfolio in use for the petrochemicals. So that I think with the current prices of petrochemicals and with the market condition, we are going to have better realization in the petrochemicals. Okay. And so what about the impact of higher LNG prices on our trading portfolio? Do we get any substantial profitability in this year or next year because of higher JKM prices? Sure, sure. Whatever the portfolio is there, on the indexation differences, as well as the prices which are there, the volume which are there, the strategy we have, including our destination swap, as well as the hedging, certainly it is going to increase. Okay, sir. Thank you, sir, and wish you all the best, and I wish everyone stay safe. Thank you, sir. Thank you very much.

Thank you. Thank you. The next question is from the line of Vidyadhar Kindle from ICSA Securities. Please go ahead.

Thank you. Good afternoon to all. My first question is regarding the first quarter trading, gas trading. So just wanted to ask that in first quarter, you had stated on your last earnings call that some volumes were tied up when oil prices were lower. So was a higher proportion of volume, trading volume in first quarter tied up when oil prices were lower? And Will that proportion reduce as we go from Q2, Q3, Q4? See, that way I can't answer your point because each cargo has its own strategy which are tied up, which are being sold in the international market or which are having destinations as well as so many other things are there. So that way I can't answer that way. Sir, where I'm coming from is... Let me finish. Yeah, yeah, please. See, I would like to just inform to all investors, including you, that we will be doing better as we have done prior to previous years also. We will be doing better in the gas marketing statement. Previous years means, sir, when you are saying previous years, you are better than your best year, which is FY19? FYI, I think 18-19. So you will do better than that also, you are saying? Yes. Okay, so the... Sir, what I was trying to understand is that as oil prices were moving up, you must have been more keen to first tie up volumes even when oil prices were somewhat lower for first quarters. but you may not have been in so much hurry to tie up volumes for Q2, Q3, Q4. And that is where my question was, that was larger proportion of, was it tied up when oil prices were, let's say, 54, 55 or something, the futures, and are smaller proportion of volumes in Q2, Q3 tied up when oil prices were? That was my question. But if you don't want to answer that, it's fine. No, no, I will answer you. I have been giving you answers for four years. Sir, I have probably one of the most bullish guys for this year and next year, if you see my reports.

So that is where I am coming from.

So that is where I'm coming from, that the first quarter performance was lower than my expectation. So which is where I was trying to understand. No, a little pandemic or other things might have infected. Our strategy could have been hedging, could have been. So it mixes, it stays in a little bit of volume. But this quarter, Q2 onwards will be better. And so the spot energy spread for Q2, Q3, Q4 is much better and that's going to help you for sure. Will that be one of the key factors which will help you do much better in the going forward?

Yes.

Lastly, so basically in your numbers, if we see you have a gas marketing number one in standalone and one in console, which in the last two quarters, the console number is higher. So is that what you capture incrementally in console? Is it your Singapore or other entity, marketing entities outside India? Yeah, that console includes that also. And that is the number one should look at? Yeah. Okay. Thank you.

Thank you. Thank you.

Thank you. The next question is from the line of Tanakin from J.P. Morgan. Please go ahead.

Yeah, thank you.

My first question is, can you give us a sense of what was the blended gas cost in the pet chem business and how it will trend over the next two to three quarters? Because we have a situation where spot energy prices are surging and could even move higher and crude is also surging. So just to understand the pet chem business profitability.

See with the current prices and with the portfolio we have, we'll optimize the profitability of pet chem.

So sir, the profitability of pet chem should stay at these levels or come off because gas prices are increasing and headline PE prices are flat.

So volumes will increase, but will the profitability first then improve? See, we have a mixed portfolio of different gases, different portfolio of sourcing also. That will optimize the sourcing of gas for the petrochemicals.

Understood.

Fair enough. Profitability will be of the last year level or better than that.

Understood, sir.

So my second question is... And with the prices trend as we have seen this 95,000 or so per metric term, expected to go up. Understood. So my second question is basically on gas demand in India. Now, after two to three years, spot gas prices are surging and we are still not yet in the peak season of tightness. Food prices are high. Now, a substantial part of India's gas demand is met by a spot energy imports. In that context, should we see some kind of progress in India's overall gas demand? And related to that, sir, when you are talking about the fertilizer plants starting up, what is the gas cost for the fertilizer plants? Will they be buying support energy or have they already tied up for crude link contracts? See, so far as the gale is concerned, we have long-term contracts. We will be giving the gases or the supplies to the fertilizer, plants to our long-term content, which is already there as per the agreement. And so far as the spot prices are concerned, spot market are concerned, that we'll see wherever the optimization is there, wherever the requirement is there, we'll do. We have substantial volume which has been tied up on the long-term basis. So we are not dependent on the spot market. But Certainly, we take advantage of the spot prices, better spot prices for optimization of the profitability or selling in the international market or whatever the situation comes. Overall, you think that gas demand in India could be softer over the next couple of quarters given what energy prices are? Because these fertilizer plants are coming, CGBs are coming, naturally the demand is there, so demand for the gas texture is going to increase. That is obvious.

Thank you very much, sir.

Thank you. Thank you. The next question is from the line of Sabri Hazrika from MK Global. Please go ahead.

Good afternoon, sir. Basically, What we understand is that your US LNG is actually a part of your portfolio, which is blended to various kinds of gas and it is sold in India based on certain formulas, so under certain long-term contracts. And this formula is largely oil link. So in a way, the large portion of your marketing margin is dependent on the difference between oil link LNG and Henry Hub. Is that the right assessment? No, not fully because then we have also the portfolio which has contracted volume with the consumers also. That way it has also, it's not only the difference between the indexation difference between the hand-rehab and the rent link. There are other factors also. but the formula you are saying will be like different for different customers yes it may not be like a vanilla indexation yeah right yeah some yes and from the demand and but we are we are optimizing in all the wherever is there we have margins and then we tie up with that right so considering that and we have places have gone up significantly in the last three four months i think it is at 4.1, 4.2 now. So is it having any impact on your gas volumes in gas margins in particular because of this increase? Or you are like still protected depending on what kind of contracts you have? Indexation difference is favorable to us. So you consider the current increase in global gas prices not to have any adverse impact on your gas marketing portfolio? Okay, sir. And secondly, no, that's all. That's all from my side. Thank you.

Thank you. The next question is from the line of Vartarajan Sivasankaran from Antique Limited. Please go ahead.

Thank you for the opportunity. Thank you.

So, one on gale gas, what you mentioned in terms of the number of CEE stations, can you repeat it, sir? And what is the volumes we are doing currently? Gale gas. You are talking about the gale gas or on phone CGD? Gale gas as well as the CGD. What is the number of stations you are doing? Gale gas, how many? Just one minute. Just one minute. Thank you. So in the gale gas, we have more than 675,000 GPNG connections and 253 CNG stations. And at present, we are having the total sales more than 5.5 mm CNG. But it is not only the CNG and PNG. There are other bulk customers also. And you mentioned some numbers. Yeah, please. You had mentioned something about your own CGBs. Six CGBs. Six CGBs, yeah. Six CGBs, we have around 80 CNG stations, 1,36,000 ETNG connections. And we have around 832 cores. But since these are... these some of the pts are to be connected through our grid our gsbtl grid once that is connected more and more volume will increase so it will take some time uh this station is what you mentioned sir eight zero uh yes zero eight zero png station my second question is on your LNG off-tech contracts with various terminals. If you can share some details as to what are the existing contracts you have? LNG contracts with the various suppliers, you want to say? With terminals like, you know, VHS terminals, like, you know, any off-tech arrangements you have.

VHS terminal to Zaheer. Zaheer has got 4.5, Kochi is 0.43. And we have one more agreement with AMRA and AMRA is 1.5 million tons. And DABOL is going to be a 5 million ton terminal that is fully operated by us. But then it is 2 million tons.

Thank you.

Thank you. The next question is from the line of Mayank Maheshwari from Morgan Stanley. Please go ahead.

Thank you for the call, sir. Just two questions from my end. One was in terms of your LPG volumes, they have recovered very well now. So is it fair to say that most of the gas supply issues of ONGC are largely behind us now?

We request you to please stay connected while we check the line for the management.

Participants, you are requested to please stay connected while we have the management reconnected. Thank you. Ladies and gentlemen, thank you for being on hold. We have the management reconnected. So over to you, and we have Mayank Maheshwari in the question queue for Morgan Stanley.

So should I just repeat my question? Yeah, yeah, please. Yeah. So, sir, I was just checking on the LPG volumes. They have recovered very well for you this quarter. So are we kind of thinking that most of the issues that we had from supply from ONGC, that's largely behind us now?

Yeah, yeah. There is no such – means you are talking about the LPG?

Yes, LPG liquid and hydrocarbon sales have kind of recovered very well in the first part.

Yes, that is sorted out.

That should now kind of come up at the current run rates now going forward, correct?

Yes, almost there, near to that.

And so the second question was more related to your cost on the PET-CAM side because of the maintenance. Can you just kind of help us understand what would be the potential cost that you have booked in for this quarter on pet care?

Potential cost related to maintenance?

Yeah, any cost that you have booked in this quarter which is extraordinary?

No, no, that is routine type of maintenance is there. Annual maintenance always, plant maintenance are there. That is always there. Any major cost is not there. It is routine type of maintenance, oil and other things which are there, and many equipments are to be repaired, something like that is there.

Okay.

There is no major one-off.

Mr. Maheshwari, you're done with your question?

Yeah, I'm done.

Thank you.

next question is from the line of police from hsbc please go ahead yeah thanks for the opportunity so can you give some uh what is the status of the four fertilizer plants that are likely to permission and and to draw cash for me so far as the poor fertilizer plants are there

So, about the Ramagunda fertilizer which is already commissioned. HURL Gorakhpur plant is ready and the volume is 1.87 mmHg and they will take full volume by end of this year. HURL plant is ready. Pre-commissioning activity is under progress. and the volume is 1.87 mm SMD. HURS Sindhri, again the plant is ready, and they will take full by May 22, and the pre-commissioning supply will come in this month only. These are the status of these four fertilizer plants. So cumulatively, how much are they taking right now, and what will they take at peak? Total will be, peak will be 10 to 12 MMCMD. Gradually, it will increase. But by May 22, I think full volume will come. And currently, how much should we add up to all these folks? Currently, around 2.5. Currently, taking together, 2.5, around 2.5. Okay. This is it.

Yeah, my second question is, you know, if you look at the total gas demand for the country, X of these new fertilizer plants and the new CTVs, do you foresee a risk of demand going down or do you think the demand for gas will be there to try to take additional gas even with higher prices?

So demand will be up certainly 6 to 8% or 8 to 10% growth will be there, I expect. The coming CGDs which are there, the coming fertilizer that I have already sold. Including these, including the new sources of demand.

What you are telling is that because LNG prices have gone up, the demand, would the demand still grow?

Yeah, are you seeing any discussion with your customers?

Yeah, from the supply side, we've got different type of gases, and some of them are not LNG, and they are still at reasonable prices, and that is why Director Panans is telling that the demand will still grow, and 57% is our estimate. The national figure, the macro level figure that we are talking about.

Understood. My last question is if you can comment a bit on the other income. The other income was slightly softer. What elements were missing this time?

Interest. Interest income. Other income comprised mainly of the... In Q1. Come Q1. Come Q1. Okay, sir. We have received the refund from our tax department in Q4 on account of our interest and other things. We have settled the back to the source. So that's what in Q4. Tax has come down. Yeah, but even compared to Q1 FY21, it's lower. Q1 FY21. Yeah, it was 241 crore, now it's about 197 crores. Again, it was Q1 almost same, 212 crores versus 195 crores. Maybe 20 crores difference is there. It's not that... Q1 FY21 versus Q1 FY21, not much of the difference is there. Yeah, but again, keep it down compared to Q2, Q3, Q4.

All three quarters were exceedingly good.

Because we have received the dividend and other things also.

So that didn't come through. Dividend and the income tax income or income tax income?

These are the, yeah. Dividend as well as the refund from the income tax department. If you like, I will share the details also.

Thank you, sir. All the best.

Thank you. The next question is from the line of Nafisa Gupta from Bank of America. Please go ahead.

Good afternoon, sir. My question is on the LPG segment. We see substantially higher revenues in EBITDA. Is that only on account of higher LPG prices? Is the quarter despite lower sales or is there anything else?

Prices are good. Hello?

Yes, sir.

Prices were better.

So that is the only reason?

Prices were there, some volume also.

And so the volumes are down QOQ.

I see. Only prices. See, for the LSC, for prices have gone around 51%. If you compare with the Q1 FY21, which was around 28,987 and 29,000 or so. It has come to 43,000 or so. that has impacted.

Sir, if my understanding is correct, for the LPG prices, we do maintain a lag of one month, right, to the international prices?

Almost. Can you repeat? Almost?

Sir, for the LPG prices, we maintain a lag of one month to the international prices.

It's a lag by one month as compared to the international prices.

Got it. And, sir, could you, I mean, if the current transmission volumes in the pipeline, what would be the current rate if we compare maybe Q1 to Q2? 110 or how much?

Gas transportation volume is about 115 million per day.

It is around 115, yeah, 115. Got it, sir.

Thank you.

Thank you. The next question is from the line of Mohit Patel from Equus Securities. Please go ahead.

Thanks for the opportunity, sir. So just one question. When is the goal is getting completed for 5 million ton? What is the timeline there, sir?

It is December 22. Next year we are planning, but I think December 22 mechanically it will be completed and we are expecting that March 23 full operation will be there.

Okay. Okay. And, sir, in Damra, you mentioned that you have booked, what, 1.5 million tons, right?

Yes.

Okay. So, when is that is likely to be commissioned?

Next year, Q3.

So, that will be by September, December of 2022, right?

Yeah.

Thank you, sir.

Thank you very much.

Thank you. The next question is from the line of Yogesh Patil from Reliant Securities. Please go ahead.

Thanks for an opportunity, sir. Sir, I have a couple of questions. As we know, the Kochi-Mangalore pipeline is commissioned and stabilized. How much volume we transmitted through this pipeline in this quarter and how much ramp-up do you expect in next one to two quarter?

For Kochi-Mangalore, I think around two Two MMHMD? Three MMHMD. Three MMHMD has been transmitted.

Okay. And any outlook for next one to two quarters or one year?

We expect to maintain this or grow by about 0.5 to 1 million next two, three quarters.

Okay.

The section connecting Kerala to Tamil Nadu, that is under construction. That is the reason for this.

Okay. Thanks. So, second question is related to unified gas pipeline tariffs. Is there any development from the side of PNGRB and have you heard anything, any updates from your side?

No. What was done, it is still with the PNGRB. And there is no movement further.

Okay. And the last question from my side, sir. Reliance is now producing close to 18 mm CMD on kind of a gas from KG Basin. And how much gas is flowing through the Gales pipeline? Can you give us the details if you have? So, sir, we are trying to figure out if Indian gas consumers switch from the costly LNG to a domestic growing cheap gas, then will you be able to maintain the same kind of a gas transmission volume or that share can be given to someone else like that? So just wanted to figure out how that 18 mm CMD and how much share is flowing through your gas pipeline.

Thank you.

Presently 4.5 million is flowing through our pipeline, of which about more than 1.25 is our volume, remaining issue for this volume.

Okay. Thanks. Thanks a lot, sir.

Thank you. The next question is from the line of Vidyadhar Gandhi from ICSA Securities. Please go ahead.

Yeah, thank you. In the last earnings call, you had mentioned that for FY23, 50% of your volumes, this trading volumes were tied up. 30% was tied up, but the positions had been kept open and 20% was not tied up. So is the situation still the same or it has changed? For this financial year, we are fully tied up now. Yeah, 23, that is why I'm asking. For FY23, you are asking? Yeah, yeah, you had last call said 50% tied up, 30% tied up, but not... Even for 23, we have tied up all cargoes. I mean, they are allocated, which means we know where these cargoes will go, yeah. Which was not the case last call, when we did the last call.

Is that correct? You yourself have told the market is looking up, so things have changed.

So you have, between the last call and this call, tied up the balance also?

Yes.

Okay. Thank you.

Thank you. Participants, to ask a question, you may please press star and 1 on your touchtone telephone. We have the next question from the line of estimation from Nirmal Bang. Please go ahead.

Good evening and thank you very much.

So we'd like to get some update on the recovery LND in terms of any further investments required and what is the kind of expectation on the revenue and profit after tax for this year on the current volumes and what is the kind of growth you can expect in that business once it is fully operational. Stay over the next two weeks. Excuse me. Can you repeat what was it about? We could not get your question.

Basically, I'm asking you about the rest of the energy investment you have. It's pretty much a subsidiary now for the double energy terminal. So, last year you have turned the corner today on what is profit. So, what is the kind of outlook for the revenue and profit this year given the kind of pricing you are enjoying energy? And secondly, once the breakwater commission and you are able to do the full volume.

What is the kind of growth you can expect in the, I think, the R&D business? Yeah. So, for 5 MMTPA, this double terminal is there. So, 25 to 30% is being utilized. Last year, we had done around 30 cargoes, 32 cargoes. 32 cargoes. So, when the breakwater will... be operational as we are expecting December 22 or maybe March 23 also. So total 80 cargoes can come up. So on an average, I can say around 2,400 crores of the revenue will be there.

And no further investment required for funding the capex?

No, no, whatever is committed that is there, 700 crores to 800 crores. That's for breakwater only. Okay. And secondly, what is the update on your propane diatomization project for polypropylene? Where are you and what is the kind of timeline you're looking at right now, the investment? This Pusar plant, yeah, so that around 10,000, 9,000 to 800 or maybe 10,000 crores of the investment is there. And then we are expecting it to take 36 months, maybe three years from now, you can say.

So in terms of the project time then, where are you? Have you done the facility study?

Are you going to ? That is done. Licenser, we have done. We are in the process of awarding major equipment, supplies, and everything. Even the propane source and everything is under process.

If I may ask a couple of questions here. One is on propane sourcing. What is the kind of contract arrangement you have in terms of volumes and policies? And secondly, is there a license for that process?

I think we will give updates when it is concluded. Thank you.

Thank you.

Thank you. The next question is from the line of Manikant Agarwal from Agnes Capital. Please go ahead.

Just a couple of questions from my side. The first one is, you said the fertilizer plants are currently taking 2.5 msmd. When did this start from? Is it from Q1 or in Q2? 2.5, 2.2 to 2.5 is the consumption of Ramagundam plant which is online and 0.1 is the consumption of Gorakhpur. What director finance had informed is that The Gorakhpur will go to full load, which is about 2.1 to 2.2 million cubic meters per day by December. And Sindhri and Baroni will go to full load by mid of next year, though their commissioning will start this month. That is what Director of Finance has told. And Metix is likely to start offtake by next month. They will start actually this month, but that will be commissioning period, since it is already a plan which had run in the past. So that is how we are expecting the full buildup of fertilizer volumes in coming months. I understand sir. So what I'm asking is, when is the first set of volumes started being taken by the Ramakantan plant actually? The plant started consumption in July 2020. But that is the commissioning phase, and because of COVID, they had some labor problem and all that. Now they have come to full load.

This is what I want to inform you. I just want to say that they have taken. What? At Ramagunta. March for commission. But now it is full load.

Now it is full load. They have declared commercial operation in March, 23rd March, in fact. So after that, they are now consuming more than 2 million cubic meter per day. Right, sir. And my last question is, when do we expect the next set of pipeline pilot positions? So I'm asking in the context of new public consultation documents being hosted at UNGRV. I understand that the quorum is not there. So if you can provide some guidance there. Which pipeline you're talking about? I think Davao Bangalore and

The Abole Bangalore KKMDP tariffs were revised sometime in 18-19 and in terms of tariff order, the tariff will again be revised in 22 or 23.

Okay, so the new public consultation documents which are being web-hosted now, we're expecting that to come up only in two weeks?

We don't know which public consultation document has been, I don't think any public consultation document has been web-hosted.

They are not for Gale tariff, Gale pipeline tariff. No pipeline tariff.

There is no public consultation at present for any of the pipeline tariff.

No, you may be happy to the pipeline UI that we have this thing for Swan LNG connectivity to that is one proposal being considered as of now.

Thank you. The next question is from the line of please go ahead.

Thank you very much. Gale gas listeners to you reported a volume of 5.5 on a TMD. So when do you think these volumes are reflecting, you know, the market and profit we've seen, other city gas companies like, say, Mahanagar Gas or Indraprastha Gas, what are the timelines and what are the kinds of growth you expect in these volumes, say, over the next two, three years? For Gale gas, you are talking?

Yeah.

So, as number of PNGs, CNG connections are there, number of GAs they have, we expect that around 10% growth will be there. So, but it's not reflecting in your profit numbers. So, the question I'm asking is, if you compare it with other CDD companies, when do you think you'll be able to, you know, increase the margins and returns? Given the kind of scale you've already given up at 5 over CMD, which is more recent in terms of the profitability of the business over scale. There are two types of sales they are doing. One is a bulk sale also that that is not for the CNG and PNG connections. So, total volume of 5.5 mm HMT is there, but so far as the PNG and CNG connections are there, that is in the growing stage, and we expect that it will grow in the coming years.

Okay, thank you very much. Thank you. Ladies and gentlemen, due to paucity of time, that was the last question. I now hand the conference over to the management for their closing comments. Over to you, sir. Hello. Yeah, over to you for closing comments, sir.

Yeah, thank you very much. Thank you, Nitin and team. I think we have tried to give all the answers which has been asked. Now I request if some of the questions might not have been answered. As well as some of the investors want more detailed answer of any of the queries which they have, they can contact me as well as my team, and we'll be happy to provide the answer to any of the queries which are there. So thank you once again. Thank you very much to the entire team. Thank you.

Thank you. Thank you, members of the management. Ladies and gentlemen, on behalf of U.S. Securities, that concludes this conference call. Thank you for joining us.