GAIL (India) Limited

Ladies and gentlemen, good day and welcome to the Gale Limited Q1 FY25 Earnings Conference Call. As a reminder, all participant line will be in listen only mode and there will be an opportunity for you to ask question after the presentation concludes. Should you need assistance during the conference call, please signal an operator by pressing star then zero on your touchtone phone. Please note that this conference is being recorded. I now hand the conscience over to Mr. Abhishek Megham. Thank you, and over to you, sir.

Yeah, thank you, Fajal. Thank you, everyone, for taking our time for this first quarter of the 535 results call. We have with us from the management, Sri R.C. D.M., director of finance of the company, along with Adam, which is in the lead. And now, without any further delay, I will hand over to my team for opening remarks. Over to you, sir. Thank you, Abhishek. A very good morning to you. My colleagues present here, we are friends from investors and analyst community. Once again, good morning and very warm welcome to Gail's earning call for Q125. At the outset, I thank you for all of you to attending this earning call. It gives me immense pleasure to share with you Gail received many comments from CAG, for financial statement for the financial year 2023-2024 as this is 15th year in row. Gale has advanced its net zero carbon emission target for scope 1 and scope 2 emissions to 2035 from earlier stated target of 2040. Gale's results for quarter ended 30th June 2024 have been declared yesterday. I would briefly touch upon the major highlights for the quarter, and then certainly we can open the session for questions and answers. Financial highlights. Gas turnover increased by 4% to Rs. 33,627 crore in Q1 FY25, edge against Rs. 32,250 crore in Q4 FY24. And this is mainly due to robust physical performance in gas transmission segment, increased natural gas marketing volume in domestic market, and higher natural gas prices. Profit before tax increased to 3642 crore as against 2842 crore in Q4 financial year 24. And this is up by 28%. And it's mainly due to increased transmission volume and better gas trading margins. The profit after tax during the quarter increased to 2724 crore as a guess to 117 crore in the Q4 financial year 24. Again, there is an increase of 25%. On comparative quarter basis, Gail Clough turnover of 33,626 crore as a guess, 32,138 crore in corresponding period of the last year, an increase of 5% mainly on account of increase in gas transmission volume. and natural gas prices. Both PVT and PET increased by 93% to Rs.3642 crore and Rs.2724 crore as against Rs.1889 crore and Rs.1412 crore respectively and regions are same. Physical performance during the quarter Q1 FY25 as against Q4 FY24 Guess marketing volume during the quarter was 99.47 MMSCMD. It is almost flat. If you compare with the previous quarter, there it was 99.90 MMSCMD. Overall volume, as I said, is flat. However, there was an increase of 5 MMSCMD of volume in domestic market. And this growth is mainly driven by power. Natural gas transmission volume was 131.79 mm CMD in Q1 financial year 25 as against 123.65 mm CMD in Q4 financial year 24. The average capacity utilization was 63%. Polymer production was down by 86 mm TMT to 162 TMT in Q1 financial year 25 as against 248. in previous quarter due to annual turnaround which normal phenomena in our case we normally take annual turnaround during the period of April every year. LST production was 216 TMT as against 265 TMT in previous quarter. The decrease is also due to annual turnaround activity at Patta, C2, C3, Vijaypur and Gandhar units. LPG transmission was 1065 TMT as against 1114 TMT in previous quarter. The capacity utilization during the quarter. Consolidated financials for Q1 financial year 25 as compared to Q4 financial year 24, the consolidated turnover in Q1 financial year 25 stood at Rs. 34,822 crores as against Rs. 32,833 crores in Q4 financial year 24, which is up by 6%. The profit before tax in Q1 financial year 25 stood at Rs. 4,114 crore as against Rs. 3,099 crore in Q4 financial year 24 and this is again up by 33%. The profit after tax is Rs. 3,183 crore versus Rs. 2,469 crore in Q4 financial year 24 up by 29%. As you know, Gale also has six CGDs along its Jagdishpur-Haldia pipeline. We have an infrastructure of, under those CGDs, 189 CNG stations and 3.4 lakh DPNG connections. During Q1 financial year 25, 700 new DPNG connections were added. The physical volume is 0.3 MMSCMD during the quarter. In the next two years, GAIL targets to add around 80 new CNG stations and around 1,20,000 new DPNG connections. As you know, we have Gail Gass as our 100% subsidiary. Now, I will take you through the Gail Gass financial highlights for Q1 and also their plan for next two years. Gross turnover stood at Rs. 2987 crore as against 2853 crore in Q4 financial year 24. Increase of 5% and this is mainly on account of increase in revenue from CNG segment by 4% and bulk trading segment by 7%. Profit before tax stood at Rs. 149 crore as against 121 crore in Q4 financial year 24, and there is an increase of 23%. Profit after tax stood at Rs. 110 crore as against 92 crore in Q4 financial year 24, increased by 20%. The physical volume increased to 7.11 mm CMD in Q1 financial year 25. Increase of 3% mainly on account of increase in CNG sales. and 40%, sorry, increase of 3% mainly on account of increase in CNG sales and 14% bulk and trading by 4%. During Q1 financial year 25, Gale Gas along with its JV subsidiaries had added 27,467 new DPNG connections and two CNG stations having infrastructure of 10,03,000 DPNG connections. In the next two years, Gale Gas targets to add under 70 new CNG stations and around 5 lakh new DPNG connections. Now I will take you through the project performance. As you know, Mumbai-Nagpur-Jharsugda pipeline we are laying is a length of 175 km. Activities for laying this pipeline are in full swing and we expect this pipeline to be completed during current financial year. Regarding Jagdishpur-Haldia-Bokara-Dhamra pipeline, this is pipeline of 2986 km. Out of total pipeline, 2986 km has already been laid out of 3289 km and remaining part is expected to be completed progressively by March 25. Shikakula-Mangul main pipeline, this is 421 km pipeline. Work is under progress and spur lines are Work is under progress for mainline and spurline and 320 km is already completed and rest of the pipeline is expected to be completed during current financial year. Gurdaspur-Jammu natural gas pipeline, this pipeline is having length of 160 km likely to be completed by July 26. Other projects, PDHPP at USAR, capacity is 500 kTPA, project cost is 11,256 crore, mechanical completion is expected by April 25, and we expect commercial production by October 25. Till date, the progress is 69.5%. Polypropylene plant at Patta, capacity is 60 kTPA. Project cost is 1299 crore and expected to be completed during current financial year. And project progress is 87.4%. IPA at Usar, capacity is 50 kTPA. Project cost is 530 crore. Completion date is 24 months after licensor selection. Currently, we are in the process of selecting the licensor. We have Acquired one JBA petrochemicals. Now we call it a Gale Mangalore petrochemicals. Capacity of this plant is 1250 kTPA. Project cost is 4200 crore. We expect to be completed by June 25. With respect to capex, during Q1, financial year 25, we have incurred capex of 1659 crore, and this capex is mainly on pipeline, around 500 crore, petro-farm, again, around 500 crore, CGD projects, 30 crore, and capex on others, operational capex on others is around 400 crore. Estimated future capex for financial year 24-25 is 11,450 crore including the equity contributions and 2526 is 10,129 crore again including the equity contributions. Now I will take you through the segmental outlook. As you know that we have marketed almost 100 mm CMD of volume in the Q1 financial year 25. And we have been giving guidance to you that this year we expect to grow by approximate 5%. We are on that course. We have also given you the guidance regarding the marketing margin for the full financial year. We have said that whatever situation comes, we are expected to earn around Rs. 4,000 to Rs. 4,500 crore of marketing margin. We have given the kind of range to you this time. And we are on the course of achieving those targets. In Q125, we have already earned almost 1,994 crore rupees of marketing margin from this segment. And we expect to surpass the current target given to you, 4,000 to 4,500 crore. And for guidance purpose, you may consider now 4,500 crore as a minimum target for this financial year. Gas transmission volume, we have been giving guidance for now almost three years And we are on course. The guidance we have given for this financial year that we will transmit gas marketing around 130 to 130 mm CMD volume. You can see from the physical performance of Q1, we have transported almost 132 mm CMD to a precise 131.79 mm CMD. With respect to outlook for 25, 26, and 26, 27, maybe coming two to three years, we expect to grow our transmission volume by 10 to 12 mm CMD. Polymer production is stood at 162 TMT as against 248 TMT in previous quarter. And this is, as I explained to you, this is mainly due to normal plant shutdown, which we take normally in April. And this year also, we took in April. We are expecting an upside in this segment here on. As you know, the price are almost stabilized. The natural gas prices are also softened. We expect to earn, when we close this financial year, a reasonable amount of profit from this segment during financial year 25. Liquid hydrocarbon production stood at 216 TMT in Q1. And we have posted a PBT of 229 crore. The production is lower side in comparison to 265 QNT in Q4 financial year 25. Again, this is primarily due to turnaround activities. But the production level has been regularized since May 24. And we are course of achieving our capacities as we did in last year. And maybe more than that. Both for petrochemicals and LFCs. That's all from my side regarding the overview of performance and projects. The management of the company is available now with you. We would be glad to clarify any questions that you may have. Now I hand over to you, Abhishek.

Mr. Abhishek? Yes, Abhishek. Yes, sir.