GAIL (India) Limited

Ladies and gentlemen, good day and welcome to Game India Limited Q3 NFI 25 earnings conference call hosted by Ilara Securities India Private Limited. 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 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 conference over to Mr. Gagan Dixit from Ilaria Securities. Thank you and over to you, sir. Yes, thank you. A warm welcome to everyone to discuss Gale India Limited Q3 FY25 result. It is our pleasure to be able to bring to you a management of Gale India Limited led by Sri R.K. Jain, who is Dr. Faraj. and other senior executives of the company. So with these words, I would now hand over the conference to the Yale India Limited management. Over to you, sir. Yeah, thank you, Gagan. My dear friends from investors and analysts community, a very good afternoon to all of you to this earning call for result of Q3 financial year 25. At the outset, I thank you all for attending the earning call and would briefly touch upon the major highlights I feel proud to share that Gail has registered highest ever quarterly and 9 months PBT and PAT. In comparison to corresponding period of 9 months, PBT and PAT registered a stellar growth of 39%. This stood at Rs. 12,123 crores and Rs. 9,263 crores respectively. This is an account of robust physical performance. by almost all major segment and exceptional income of US dollar 285 million which amounts to rupees 2440 crore as compared to similar period last year. I feel happy to inform our investors that company has declared an interim dividend at the rate of 65% of face value of shares for the financial year 2425 that is rupees 6.5 per share. On stand-alone basis, GAIL has registered gross turnover of Rs. 34,912 crore, profit before tax of Rs. 5,029 crore and PAT of Rs. 3,867 crore in Q3 FY25. On consolidated basis during Q3 FY25, the turnover, PBT and PAT stood at Rs. 36,887 crore and Rs. 5,272 crore and Rs. 4,082 crore respectively. I will take you through the major financial highlights. Gales gross turnover registered a growth of 6% and stood at Rs. 34,912 crore in Q3 financial year 25, as at Rs. 32,814 crore in Q2 financial year 25. The PBT and FED during the quarter rose substantially by 46% and 45% respectively to Rs. 5,029 crores and Rs. 3,867 crores as I guessed, Rs. 3,453 crores and Rs. 2,672 crores in Q2 financial year 25 respectively. This includes a receipt of an exceptional income of Rs. 2,440 crores from SAFE Marketing and Trading Singapore as settlement towards withdrawal of arbitration proceedings. On consolidated basis, the turnover registered a growth of 9% and stood at rupees 36,887 crore in Q3 financial year 25 as against 33,861 crore in Q2 financial year 25. The PBT made a growth of 52% and was at 5272 crore in Q3 financial year 25 as against 3470 crore in Q2 financial year 25. VAT also followed the trade and registered a growth of 52% and stood at Rs. 4082 crore in Q3 financial year 25 as against 2694 crore in Q2 financial year 25. I will take you through now through physical performance of Q3 as compared to Q2 financial year 25. The gas marketing volume during Q3 financial year 25 was 103.46 mm CMD as against 96.60 mm CMD in Q2 financial year 25. During the quarter 37 LNG cargoes were imported making it a total of 107 cargoes during nine months as against 101 during April to December in 23 to 24. Natural gas transmission volume decreased by 4% 135.93 mm CMD in Q3 as against 130.63 mm CMD in Q2, financially at 25. The decrease is due to reduced offtake by power segment, almost 3 mm CMD and supers volume 1 mm CMD. The average capacity utilization stood at 60%, approximately 60%. Polymer production was 216 TMT as against 234 TMT in Q2, Capacity utilization for the quarter stood at 106% of its name plate capacity. LFC production was 283 TMT as against 252 TMT in previous quarter. The capacity utilization stood at 79%. The LPG transmission throughput stood at 1157 TMT as against 1144 TMT in previous quarter. The capacity utilization was 100% during the quarter. Yields. If about CDD, Gale is having direct authorization of six ZAs and has an infrastructure of 195 CMG stations and 3,43,000 DPMG connections. During the quarter, approximate 5,000 new DPMG connections were added. The physical volume remained at 0.36 mm CMD during the quarter. In the next two years, Gale targets to add around 80 new CMG stations and around 1,20,000 new DPMG connections. Now, I will take you through the Gale Gas Limited, which is 100% subsidy of Gale, the performance of Gale Gas Limited. During the current quarter, turnover was down by 3% and stood at Rs. 3043 crores, as at Rs. 3150 crores in Q2, financial year 2025. PPT decreased by 7% and stood at Rs. 155 crore as a gas, Rs. 167 crore in Q2 FY25, following cut in APM gas allocation. PET was down by 8% and stood at Rs. 114 crore as a gas, Rs. 124 crore in Q2 FY25. During Q3 FY25, Gale Gas along with JV added 25,000 new DPNG connections and 5 CNG stations and is having an infrastructure of 10,55,000 DPNG connections and 585 CNG stations. In the next 2 years, Gale Cargo targets, Gale Gas targets to add around 170 new CNG stations and around 5 lakh new DPNG connections. I will now take you through the status of ongoing projects. Pipeline projects, majority of the pipeline projects which Mumbai-Nagpur-Jharsupur pipeline, Jagdishpur-Haldia-Garavdhamra pipeline, Kochi-Kotna-Mangalore-Vanjore pipeline, and Sirka-Pur-Mangalore pipeline are scheduled to be completed in coming financial year, that is 2025-2026, whereas Gurdaspur-Jammu pipeline is scheduled to be completed in financial year 2026-2027. Petrochemical projects, majority of the petrochemical projects with 60 ktf polypropylene at Patak and 500 KTA polypropylene at Usar. 1250 KTA, PTA and GMPL are scheduled to be commissioned in coming financial year. In the Dhanush Gap Gate Limited, IGGL's first phase is scheduled to be completed in financial year 2025-2026 whereas phase 2 and phase 3 are scheduled to be completed in financial year 2026-2027. Brief about CAPEX. The CAPEX for Q3 financial year 2025 is approximate Rs. 2,122 crores and this CAPEX is mainly on pipeline around Rs. 400 crores, petrochemicals around Rs. 750 crores, CGD project around Rs. 40 crores, operational CAPEX and other projects Rs. 770 crores, equity contribution around Rs. 130 crores. Now I will take you through the segmental outlook for short to medium term. In gas marketing in nine months ended December 31st, 2024, Gale has achieved a physical volume of 99.84 mm CMD and has earned marketing margin of 6,128 crore from this segment. This 6,128 crore includes 2,440 crores that is one of the insured with respect to settlement of arbitration case with SAFE. We maintain the guidance of earning 4500 crores of gas marketing margin in current financial year excluding the exceptional income of 2440 crores. We expect this number to be a total number to be around 7000 crores including the exceptional income in financial year 2425. I further wish to inform our friends from the analyst community that as part of a group of three Indian oil and gas CSUs, Gale has entered into a non-binding MOU with Argentina State Oil and Gas Company, YPF. The MOU covers the collaboration in exploration and production of hydrocarbon and critical minerals. Argentina is home to world's second largest shale gas reserve and carries potential of development which may become a significant source of energy for India in future. Gas transmission volume for 2024-25 is expected to be in the range of 129 to 130 mmRcmd. Average gas transmission volume for 9 months is stored at 129.44 mmRcmd. Further, during next 2 to 3 years, transmission volume is expected to increase by 10 mmRcmd on year-on-year basis. Polymer production stood at 612 PMT in nine months for financial year 25. The segment has remained profitable in nine months for financial year 25 with a PBT of 121 crores as a net loss of 399 crores in the corresponding period during last financial year. Plant is currently running at more than 100% capacity and we are targeting measures to enhance operational efficiency for sustainability. LFC production stood at 751 TMT in nine months. Financial year has adjusted 730 TMT in nine months for financial year 24. Wide order dated 31st December 2024. MOPNG has ordered a cut in APM gas allocation to Gale for LPG production. Due to this cut, we expect a drop of approximate 75 TMT in LPG production in Q4 financial year 25. That's all from my side regarding the overview of the performance and projects. The management of the company is available and we would be glad to clarify for any questions that you may have or to you present. Thank you very much, sir. We will now begin the question and answer session. Anyone who wants to ask a question may press star and 1 on their touchtone telephone. If you wish to remove yourself from the question queue, you may press star and 2. Participants are requested to use handsets while asking a question. Participants are requested to limit their questions to two per participants and come back in the queue if they have more further questions. Ladies and gentlemen, we'll wait for a moment while the question queue assembles. We have our first question from the line of Probal Singh from ICICI Securities. Please go ahead.

Thank you for the opportunity, sir. Good evening. First, from the trading business, this water, in terms of volumes, it seems the relative correlation between trading and transmission is a bit different, where transmission is reduced, but trading models have actually increased quite sharply. So how should we actually look at this correlation going forward for, let's say, the year next year?

You know, if we look at, let's say, 140 odd MMSCMD around average for FY26 for transmission, what should be built in for trading?

Just wanted to get your sense of that.

Actually, trading volume in this quarter has significantly increased because of the international sale. Almost 9 million of 9 MMSCMD has come from there. So there is no significant deviation as compared as in transmission and marketing. It is going in similar way. I think that is the disconnect which I should have explained that is creating confusion. So 9mm CMD has come from the international sales. Go on, sir.

Okay, so first then the second question was if we take out the one-time income of the settlement, which I presume is sitting obviously as you mentioned in the trading edit, then the trading edit for this quarter seems to have dropped very sharply on a QOQ level or on a YOY level. Can you just take us to what has happened in terms of margin in this quarter?

Yeah, yeah, very right. This quarter we had earned... 400 plus crore, to precise 417 crore out of this trading business. The major reasons are two, three. One reason is that during this quarter, the prices of crude started falling. And what has happened because of that, we have a contract which has a nine month average on sourcing side. and on sales side three months average. So it is immediately impacting because the recovery is on three months basis and payment for sourcing is on nine months basis. So going forward we will start getting the plus on account of an average changes because overall it sets off but immediately it has impacted that is one reason it is around 200 crore rupees plus that has given an impact. Second, during this quarter, the HH prices were a bit higher as compared to the previous quarter. So, our margin between the sales side which is on crude and HH which is unhinged. Normally, we are hedging to a great extent and the volumes which were unhinged had also impacted. Third, we have... We have marketed volume more than the volume which we have sourced. Normally we do in order to take care of, to avoid the risk of take or pay because normally in an international contract it is 100% take or pay whereas in downstream contract it is It is 80-90% take-for-pay level. So, we normally sign contracts more than the source volume. So, this quarter what has happened, most of the customers were drawing and in order to fulfill those demands, we sourced spot cargos, which were higher than the marketing price, which one of the situations sometimes happens, sometimes we gain out of this also, because when the spot prices are higher, Lower we tend to gain. So this will happen during this quarter. And these two, three regions have reduced our marketing margin in last quarter, that is Q3. And this is also, you can say, not a normal situation. That's how it has come down.

So if I were to quantify this term, you mentioned 200 odd crore for the first reason, which was basically the mismatch in contract terms.

For the other two regions also, it will be somewhere in 200-300 crore each. So, that's caused the 800-900 crore crash. For other two regions, it is more than that, around 600 crore. 600 crore each for each region, is it? No, no, no. 200 crore for first region, that is 9 months average versus... The three-month average and the HH volume around 150 crores because of increasing price and fulfilled our commitment by sourcing. Because in this year, we have short of volume. 26 onwards, we have lot of volume. So, we have fulfilled our commitment in downstream by sourcing. What we unfortunately was higher during this quarter, which led to 600 crores. So, all these regions have led to more than 900 crores of drop.

Understood.

Right, sir. That was my first... If I can sneak in one last question, how should we then look at... We have given guidance of 4500 crore, which is obviously going to be net this year, net of one off.

For next year also, should we work with somewhere around this number or can it improve on these... We have been maintaining next year's number.

We have... We have in a year running course, even that marketing margin will remain in this range only for next year as well. So around 4500 minimum base space we should build in. Let us not put the word minimum at this stage, but we will be around 4500 per month.

Got it. All right, sir. Thank you so much and come back if I have any questions. Thank you for your time.

Thank you. We have our next question from the line of Puneet Gulati from HSBC. Please go ahead. Yeah, thank you so much for the opportunity. My first is if you could also talk about any long-term PPAs that you're looking to tie up at this stage to reduce this kind of marketing volatility? Already we have tied up. Actually, you know, as international market is tied during 2025, So in order to meet those, you know, shortage of volume, we have signed 0.75 mm TPA, that is one cargo per month from April onwards at a very good rate. So that is one contract we have signed. So we have mitigated those shortage on immediate basis. It means April onwards we have one cargo extra available during every month. Second, 26 onwards, we have signed contract for 1.53 mm TPA amounting to 1.5 cargo per month. So, if you add both, in 26, we have 2.5 cargo additional. And this year, we have from April onwards, 1 cargo per month. Okay. So, the loss that you incurred was 450 crores because of shortage of volume. That should go away from next year onwards. That's what I explained and not 450. We have lost 600 crore because of this, because we as a responsible organization continue to fulfill our commitment. We could have, you know, put the cuts, but we did not do that because we know that it is a temporary phenomenon, one of it. A lot of time we gained out of it also because sometimes the spots are significantly lower than the contracted price. That time we gained, but this time, unfortunate situation, the prices were higher. So this is one kind of situation.

Just to conclude on this from my perspective, do you think volatility in marketing or because of the hedging policies, it should reduce from here on?

It is already reduced. You see, last three years, we have been continuously giving you guidance or overshooting the guidance. We gave the guidance for 2022-2023 for Rs. 3,000 crores. We had, in spite of geopolitical situation, we gave the guidance of Initially, 4,500 crore and ended up with 6,000 crore last financial year. This financial year, we gave the guidance of 4,000 to 4,500 crore until quarter 2. In quarter 2, we said that we will be traveling 4,500 crore and maintaining that.

Understood. And secondly, you know, there has been this trend of rising spot prices.

Do you foresee a risk of your transmission volume on account of that? the growth at your position of 10 million cubic meters for FY26? No, we do not see any risk of transmission volume because nobody puts their plant on a spot price basis. Spot is only to mitigate the immediate need or one of kind of situations or sometime power plant consumes. So normally the transmission volume does not get impacted because plant contracts for which plants which are coming along new pipeline for a longer period they continue to take volumes. So therefore we do not see any risk in terms of capacity utilization. We have been saying and last time we said that Our volume will increase around 10, which are nearing to 10. And again, we have given guidance for 10 mm XCMD for coming two years. We are hopeful that that will happen. Okay, that's enough.

And lastly, on this cafe, while you recovered from 0, how much did you, in your view, did you lose by them not supplying? Have you been able to recover the entire loss that you made during those quarters?

Settlement is like a marriage. You don't use a game. So we have done what we thought was in the interest of both the organizations.

Thank you so much.

All the best. Thank you. We have our next question from the line of Amit Murarka from Access Capital. Please go ahead.

Yeah, hi. Good evening. So, just wanted to understand, like, from which customers did you see a fall in transmission volume in third quarter?

Power, lady power, 3 mm SEMD.

Okay. And other, anyone else as well? Because I think it's a drop of almost 6, almost 7.

I mean, the reduction is almost 4 million. 3 million has come from power. And one more unfortunate event has happened. One of the pipeline which is led by GSPL, not GSPL, the GSPL group, the GIDL pipeline to IOCL, that has been authorized by PNGRB. That has taken away some of our volume.

Oh. So that would then be a permanent shift, right? That is it.

Yeah, I will not be able to say resistance because we are challenged.

Okay. And so generally, like, what is the outlook you give, like, segment-wise outlook as well? So what is the outlook for Q4 and for 2066 you can provide?

For which outlook you are asking?

I mean the customer-wise outlook. No, no, transmission customer-wise outlook you gave, right? Power, fertilizer. So if you could just provide what is the outlook for those segments.

So we expect that we will continue to transport around 129 or to 130 mmHg, which will make the yearly average also around that level, which I said in my opening remarks that we expect on yearly basis 129 to 130 and which actually nine months average is 129.45 around that level. So we continue to expect that we'll be doing in this quarter around that level.

Sure. Also, is there any progress on the discussion with the PNG-RB on the transmission target revision?

Actually PNGRB is doing lot many things. One our tariff petition they are processing but very slow. Anyway that benefit is available to us and the more they are delaying the more tariff increase will happen on net present value basis. PNGRB has also set up a committee, industry committee to review tariff mechanism to give, to take, to address the issues raised by various transporters. which will also benefit to this transmission company. Recently they have held the committee with industry. So all these things will give a lot of positives and we are expecting that to happen in next financial year.

Okay. Next financial year, but by H1, H2, what is the expectation now?

H1, H2, next financial year?

No, I mean by when next financial year, you mean towards the end of next financial year or would you think that it will come earlier?

I give based on the understanding for PNGRB. So I gave the date last phone call around 1st April. So it is becoming difficult for me to, because I am also taking guidance from them or I am taking the information from them. So currently I maintain the first quarter they should come out with Harry Potter.

Okay. Understood. Sure. And lastly, what was the input gas cost for petrochemicals? You can say around $10. Okay. Sure. I'll come back and back to you.

Thank you. We have our next question from the line of Sabri Hazarika from NK Global Financial Services. Go ahead. so firstly on this LPG APM allocation cut so you would be cutting volumes right rather than running the plant in LNG no LNG it doesn't make sense for us to run the plant so whatever APM allocation currently we are running the plant based on the current allocation but being a portfolio player we have the ability to source time to time LNG which is affordable to LPG plant. So immediately it is not available. We are hopeful that we will be able to source the LNG which is actually making sense for us to run the plant at the level which has been designed or which we were running. So not immediate basis, but certainly beyond that we'll be looking for the LNG at that affordable price. Okay. And what could be your like targeted EBITDA? For this segment, I mean, do you have a target EBITDA or target earnings run rate where you'd be like, based on which you'd be like taking a call on the LNG prices prevailing? LNG, I will come back specifically maybe offline to this question. I'm not ready with the answer. Okay. Secondly, on the petrochemical front, how do you see FY26 in terms of like, would you be like at a break-even level or at a profitability level? How do you see FY26, and especially on the back of the new plants also coming up? Yeah. So, firstly, about PATA. FATA, we expect that these prices are at the bottom level. Currently, prices are around 88,000 per metric ton and these prices are at this level for quite some time. So, we believe that this is the price level which is at least going to be maintained and there can be upside. So, the issue is that how cheap gas we are able to give to FATA plant is Recently HH price were being higher so we could not earn the profit what we could have thought a quarter back. So whatever we have earned in 9 months we feel that next financially we will be better off because prices we do not believe that it will go down it may go up but HH prices and the gas prices will soften therefore this will increase good profit margin for water petrochemicals and we expect it will do better than this year. With respect to the PDHPP plant which is coming up, it is not a LNG or gas based plant, it is a propane based plant. So we have already tied up propane for long term contract for 15 years and propane and PDHPP, we have said polypropylene has got a good correlation and we expect that we continue, we earn a good margin on sustainable level at PDHPP. Okay, so fair enough.

And just one small question about IGGL, you mentioned that phase 1 would be ready in FY26. So by phase 1, what do you mean by, I mean, could be like all the three different routes under phase 1?

I mean, what kind of Volume, especially for lines like Baruni, Guwahati and all you are expecting from this?

Do you have information?

So we'll come back, okay? You can just post this question, we'll go ahead with the case.

Sure, sir. Thank you so much and all the best. Thank you. We have a next question from the line of Vartharajan from Antony. Please go ahead. Thank you for the opportunity. So, this LPG trend, so far, whatever we are getting in terms of APM is completely stopped or are we still getting any new point?

No, no. We are getting only 0.6. 0.63 MMF PMD has been reduced. So, we do not complete this operation. So, how much are we getting? We were getting 1.75. Out of that, 1.62 has been reduced. So, 1.13 is available.

And was there a difficulty? This is only half of the order which was actually put out in January.

So, the second half also could be cut. Is that how it was? I'm not getting very clearly to you. So the 0.63 was half of what they originally proposed.

They said, you know, in cases, they'll do a particular volume. So this 0.63 and half of it was like, you know, it is 100%. One third.

One third.

I'm checking, look at it, and you expect, explain that... 9 months was a 3 month thing which he mentioned on the trading side of the concept.

Where do we have to make that 9 month payment and how does it work on an ongoing basis? Actually, I am not getting very clearly to you. Can you please either audio, you have to be very near to, I don't know why you are not, I am not getting it. Sure.

Is this better now? Yeah.

So, this, you know, nine months, what you were referring to in terms of the payment, if you can explain how that mechanism works and, like, is it an ongoing arrangement that we'll continue to have the nine months versus this three-month discrepancy?

Actually, we have upstream contracts where crude price is based on nine months, nine months average, right? Okay. Downstream, this market is on three months average. So, if you, when the crude price falls, So immediate three months average which we will to customer is lower. So our realization goes down. But our purchase price is nine months, that is higher. But it actually sets the whole period of time because the prices on rolling basis, we are able to recover whatever we are losing currently.

Yeah, we understand that. Is it possible to give us like what volume is in this particular bracket under this contract?

So you can assume that around 10 million.

10 million cubic meters per day?

10 million cubic meters per day? Thank you. We have our next question from the line of S. Ramesh from Nimal Bank Equities. Please go ahead. Good evening and thank you very much.

I guess the thoughts on gas marketing when you talk about this crude-linked sourcing and sale price, and they have the India-based contracts.

Given the volatility in crude price, now to assume crude prices will decline, how will that impact your delta in the Brent-linked contracts? Because if your payment average is going to continue to fall, will that not be negative for the margins on the 10 million cubic meters a day? And similarly, if India prices keep going up,

Wouldn't that also be a challenge in terms of being able to pass it on on the next portion? What are your thoughts on that?

Actually, largely, Henry, our contracts, we have tied up on back-to-back basis. Even if Henry has prices increases, we will be able to pass on to customers. So that does not impact us significantly even in my detailed analysis which I explained to one of our friend which asked the question. It was only 74 crore, 70-80 crore which impacted us. So it does not impact us. Secondly, we do not expect Henry F. Price to be such a level continuously. Henry Abbott was also $1.65, $2, $1.9 for quite some time, but all of a sudden, recently it has increased and now it has started showing different trades. So, even in the worst of times, it was impacting for the very, very minuscule volume, which we have not signed on back-to-back basis.

And what about the crude prices? They were to decline.

How would that impact this, you know, lag between 9-1 sourcing and It doesn't impact us on a yearly basis. Almost we get a square of... Because on rolling basis, our sourcing starts cheaper when... Because initially, three months we will be at a lower rate, and sourcing is higher later, that higher prices goes out from the nine months, and we also start getting at cheaper rates. So, therefore, we are able to recover. So, on a rolling basis, it doesn't impact us.

Okay. Any inventory loss in the gas marketing segment in this quarter? No. No, no. Okay.

Finally, on the CGV gas allocation and the new well gas, we understand that the APM gas is going to see a natural 7% decline that will be replaced by new well gas. So, what is the kind of line of sight or visibility that the industry has in terms of the volume of new well gas that will be available for city gas distribution to bake up for the 7% decline? Can you come back specifically? I am not able to understand. Yeah, yeah. So basically we understand from Manohar gas that there is a proposal to reduce the APM gas allocation further by 7% every year based on the natural decline of the APM gas production. And that is likely to be replaced by the new oil gas from ONGC.

So now the question is, to what extent will the new oil gas production go up to replace the 7% decline that is expected in the APM gas?

I think this is better that you ask ONGC because how much production will increase, I am not in a position to answer you.

Okay. Right, sir. I will come back in a minute. Thank you very much.

Okay. Thank you. We have our next question from the line of Maheshwari from Morgan Stanley. Please go ahead. Good evening, sir. My first question was related to the marketing side of the business. In terms of volumes for next year, considering the deallocation of gas for city gas, do you think it will be able to kind of take market share in terms of marketing next year, considering the requirements for city gas on even LNG now? Yeah, actually, you're the right question. We have been able to kind of for five years contract for a significant amount in last two months. And going forward, if gas is cut for CGD, we will continue to tap that market. So, sir, a follow-up on that, considering the requirements are reasonably big over the next three to five years. Craig, I'm not talking about this next year. How are you kind of thinking about tying it up in terms of sourcing of volumes as well? Does that mean that you'll have to kind of be a bit more aggressive next year in tying up another 5-10 year volumes? Yeah, we are already scouting for additional volume. As I explained to another person that just a month back, we tied up around 0.75 mm TPA. We have already tied up almost a year back for 1.53 mm TPU of different sources and we are already in the market to scout for more volume to meet the increasing demand, not only from city gas distribution, from other factors which are coming along our pipelines. On the basis of what your conversations are, are people more inclined to use Henry Hub contracts back-to-back or oil ring contracts? Or do you want to mix half-half kind of a thing with long-term sourcing? Actually, we have a mixed kind of demand. When Henry Hub was around $2 to $3, a lot of demand was on Henry Hub basis. And when Henry Hub starts going down, people again start thinking about crude. So it's a, you know, period in which you sign the contract. People have very, very short vision. When Henry Hub is down, a lot of demand comes from Henry Hub. When Henry Hub starts increasing, they look for crude. It depends on which time you are signing the contract. I remember five years back, nobody used to talk about Henry Hub. And now... Three months back lot of people were demanding Henry up and in fact we have tied up as I said all the volumes are Henry up, we do not have any extra volume. So it depends basically at which point of time people are coming to source the gas from us. Last question was on Dabhol. Any update and progress on Dabhol? Dabhol will be completed by March 25th. the test cargoes are in or coming up now sorry so for the capacity are you started kind of testing commissioning in terms of the breakwater etc that's what i'm telling the breakwater work will be completed by march 25 we have already prepared ourselves to take the approvals from marines And we expect that after March, by May, we will have the approvals from the authorities to bring the ship during monsoon. And until April, May, we are anyway able to bring cargoes at Dhabol. So what we believe that here onwards, the Dhabol is a full-weather terminal.

Very clear. Thank you.

Thank you.

We have our next question from the line of Kirtan Mehta from Baroda B&B Paribas. Please go ahead.

The next question is from the line of Kirtan Mehta from B&B Paribas. Please go ahead. Am I audible, sir? Yes, sir. Yeah. Yeah. First question was about marketing. How much of the volume in the marketing segment which we are sourcing on HH business but selling on crude business, would there be certain volume on that basis? So, nowadays we are almost buying on HH and selling on HH. There is no basis. Most of the volume, barring some volume, which is very, very small volume, which we have ourselves kept it open. Otherwise, we have signed on back-to-back index. My second question was about the allocation for the distribution sector. We believe in January around allocation was offered higher on the distribution sector. Again, this around 1.3 mm SEMD volume was reduced for both GAIL and ONGC. Could you explain us where was the difference of 0.7 mm SEMD which was made available to the CTA social mission sector. I am not aware. From where it was done, please. Any of you know? No, I don't have any update or clue about it. And when would the next allocation be revised? Would it be in February, middle of February that the next revision will take place? Periodically, yes. In February, yes. It is quarterly UIG, I understand, from my colleagues. Right. The last question was about, you mentioned about the GIGL volume taking over some of the ISTL volume. Would you be able to indicate the quantum that has flown there and what would be the ground for challenging this? Actually, we already had a pipeline which was connected, and this pipeline, as per PNGRB order I'm telling you, was laid unauthorizedly. However, PNGRB has authorized by putting the penalty, so challenge is that the infrastructure which was already there, contracted volumes were there, so if you allow that other pipeline to be laid, having the existing pipeline, that is not correct. That's what is our... And how much of the volume is being challenged here? I mean, what will be the volume which will have an impact because of this? So, I can tell you the volume may be more or less. Capacity of pipeline is around 9.5 to 10 billion. Currently, the volume flow was very less, 3 to 4 to 5 million. So, capacity was more. So, impact immediate has come to 4 to 5 million. Sorry, I have corrected 1.5.

Sure, sir. Thanks for this clarification and all the best.

Thank you. Thank you. A reminder to all participants to please restrict yourself to two questions per participant. May you have follow-up questions. We request you to rejoin the queue. The next question is from the line of Mehul Panjwani from Forty Cents. Please go ahead.

Hello, sir.

Good evening. Good evening.

Thank you so much for the elaborate explanations on the performance of Gail. I have one question. You have mentioned that there is an impact which is going to be squared off by the fourth quarter. Is that for the entire 900 scores which you mentioned or it is for... a partial amount, I mean, if you can elaborate, explain that.

It is never said that it is going to be squared off in next quarter. I said over a period of almost a year it gets squared off because a contract which is sourcing contract, a fishing contract on nine-month average and downstream is three-month average. So it can never be squared off in a quarter, but it starts going from this quarter onwards.

Okay, so can I say that it will be,

happens from, it will start happening from Q4 by 25 and it will end somewhere in Q3 or something like that.

It will give, whatever we have not been able to recover during last quarter, we will be able to recover at least next year. And is this... We are going down from this quarter and we will recover in next year.

And sir, is it impacting the entire 900 crores because this impact or...

No, no, this entire 900 crore is not on that account. I specified three parts. Okay. One is the 200 crore is on this account. Okay. Okay. And what are the, sorry, if you can elaborate a little bit on the other side. We fulfilled our commitment in downstream by sourcing some spot cargoes because normally we oversold the volume, then the source volume in order to take care of the issues of take or pay 100% take or pay in upstream versus downstream 90% and whenever shortfall happens we actually source to spot sometimes spot prices goes lower sometime higher this time unfortunately normally we are able to source around that price or lower than that price so that was the reason Okay, sir. So, now, if you are saying that, you know, you have sold more than what you could source, or I mean, I am not yet gathered what is exactly that, but is it because of government regulations or is it just a business? I mean, you will be guided. Don't worry about it. What I am telling, the upstream contracts are 100% stake or pay, right? Yes. Downstream are either 80% or 90%. It means downstream customer has a contractual obligation to take lesser than the upstream contract. Suppose in a situation the downstream contract take lesser where we sell the 10% or 15% volume. In order to mitigate those obligations, we actually tie up for those 10-15% more.

Okay.

Sometimes situation happens that customer takes 100%. more than 100%, it means around the tie-up quantity, 110%, and we fulfill those requirements through spot sourcing.

Okay.

That doesn't happen... Every time, that is first statement. Second, the spot prices have largely given us benefit always that we were able to source cheaper gas to fulfill those increased obligations. But this time, in Q2, Q3, spot prices are a bit higher. Okay.

Okay. Okay, sir. Yeah, sir.

One more question is on tariff revision. You mentioned that somewhere in next financial year, we can expect tariff revision, right? So what is the current tariff? I mean, and what was the tariff revision? When was the last tariff revision which happened? And how much was the tariff revision? Tariff revision happened with effect from 1st April 2023, right? Okay. And next question is what? Yeah, and how much was the tariff revision?

It is Rs.

59 for a month, which is Rs. 58 to be 60 paisa to be precise. Okay. And what is the logic? I mean, is there a logic which is used for revising the tariff or what is it? I mean, or it's completely depending on the board, the P&GRB.

Sorry, sorry.

Does the tariff revision happen based on some rationale or it is just compared, it depends on the P&GRB? No, it happened for rationale. PNGRB had asked us from tariff petition. We filed in August 24. They are renewing. Now they have to do public consultation and issue the tariff order. right and the tariff order tariff order last time made they moderated around more than 10 rupees from the tariff applications we submitted and largely on account of gas price seven seven rupees per mmbt approximate they considered the gas price of three dollars sixty one you know three dollars sixty one cents for internal conjunction in comparison which is not even a apm price Our tariff order itself says you will be getting at least HPFC price. So there is a significant amount of under-recovery available. We have submitted our tariff based on the price which was indicated in the tariff order and the tariff order possibly normally is done in 6 months but we expect this has been delayed. The next quarter, first quarter of next financial year should come. So, sir, what was the price which you have quoted in the document? Sorry to interrupt, sir. May I request you to rejoin the queue? Sorry, sir. This is a follow-up question. I am not... I am answering the... I am asking the question more detailedly. Sir, if you can please clarify. How much is the tariff you have quoted for revision? We have submitted 78 rupees per MMBTU. I guess current tariff of 58 rupees 60 paisa. Okay, sir. Last question. When is the record date for dividend? I think first for... Seventh of next month.

Okay, sir. Thank you so much. I'll join the queue again.

Thank you. Thank you. We have our next question from the line of Shantanu Sakia from Indian Petrol. Please go ahead.

Hello, hi. I was just wondering that, you know, instead of the production of LPG, didn't the government offer you a A subsidy like with the petroleum companies, you know, a subsidy which can be paid to you to continue your production at LNG prices. There is no proposal on, there is no information to us. So, I mean, you know, if you are informed that you will be subsidized to the amount of the, to continue your production? Yes, sir.

This is all hypothesis. We'll do when it comes. Thank you. Thank you. We have our next question from the line of Sumaya V from Avengers Park. Please go ahead.

Thank you. So first question is on downstream. You said there is a mismatch or a higher demand this time around. If you can just quantify the volume, then it will be.

Sorry?

Yes. So you said in the downstream, there is a higher demand. So where you have to source what card goes.

So what would have been that volume? And let me see if you can just give that number, the mismatch number.

Half quarter?

Yes, sir. Keep.

Just hold on.

Around 2 mm CMD for last quarter.

So basically 2 mm CMD, we had to procure from SPOT to meet the extra demand that came from downstream. Yeah, yeah. And also, these were mostly sold on Henry Hub or Brent, whatever we sourced on SPOT.

We have not linked to customer while sourcing because we have marketed in all the indexes. I'm looking for what the customer ended up paying for the source.

They ended up paying on Hindriya or they ended up paying based on Brindling contracts.

That's what I am telling. Both types of customers were there. We supplied spot cargo wherever the shortage was there. It is for both kinds of contracts.

Okay, sir. Sir, also, we used to earlier say, you know, wherever there is basis between oil and gas or gas and oil in terms of sourcing to the point that we said we used to hedge, what is the quantum of hedging that we probably have given that we are giving, you know, output for next year in terms of what we can expect in terms of EBITDA? What is the quantum of hedging that we have and for how long we have hedged and what kind of spread that we can, that should be? Yeah.

The spread I have already said it is around 4500 crore rupees for next financial year. Regarding hedging, I already said that we have tied up most of the volume on back to back basis. Therefore, the requirement of hedging for covering the basis risk has gone down.

Understood sir, so any minimal number that you can give around hedging that also will be helpful and also in Q3 any quantum that you can give on hedging range?

Sorry?

In Q3 was there any hedging range any quantum that you can give?

We will give you right now I do not have that information we will give you just some more Thank you. We have our next question from the line of Yogesh Patil from Dollar Capital. Please go ahead. Thanks for taking my question, sir. Sir, you are guiding us in MMSCMD volume growth in gas transmission segment for a period of FF26.

over FY25. So from where this gas will come, if you could provide some clarity or break up on which sectors will be the gas consumers on your pipeline network?

Certainly. So CGD of that we expect 2 to 3 mm CMD will increase because CGD is growing at the rate of around 12%.

Even if 4 million volume increases in CGD sector, we have almost 70% high-train infrastructure in the country. Hello.

Yes, sir. Please continue. Sorry for that.

So, CGD, we expect 3 mm CMT volume will come from CGD. 1 million volume with progressive ramp-up will come from NRL. The pipeline, the refinery which is along IGGL and source is our Jagdishpur-Haldia-Dhamra pipeline. The incremental increase in refinery of IOCL, around 12 mm of CMD in total, Faraday 3.75, Haldia 2.8, Baroni 2.6, Guwahati 0.6, Mongai now 2.2. Further, we are also putting our pipeline like Mumbai, Nagpur, Jhansukhda, and Tirka Kula, Mangal, which are going to be commissioned. Their volume will also come.

Thanks a lot, sir.

Thank you. We have a next question from the line of Vikas Jain from CLSA. Please go ahead.

Thanks for taking my question. If you could explain of your current volumes, what is the share which comes from refinery and pet care? Because these are very price sensitive customers. What is the percentage share of the current transmission volumes which comes from there, please?

Transmission volume. Just hold on. If we have. I mean, you can market it. Transmission. Transmission.

Which? Intradimital descendant. We don't have.

We don't have. Vikas, see, we will give you, actually, I have only marketing slide about breakup, but not the transmission slide.

If you could give the marketing share as well, sir.

Yes, certainly. Meanwhile, my colleague has given me the transmission volume breakup. which you were asking for. Let me give total backup. Fertilizer, around 41% share. CGD, around 25% share. Power, 7%. Oil and refinery, 9%. And then internal consumption is around 6%. Steel, 2%. And other 11%.

Thank you, sir.

Okay. Thank you, sir. Ladies and gentlemen, that would be the last question for today. And I now hand the conference over to Mr. Gagan Dixit from Ilaria Securities for closing remarks. Over to you, sir.

Yeah, thanks to all the participants. Special thanks to the real India management for sharing their views on the company's quarter three performance. We take this opportunity to thank Shri R.K. Jain and his team once again. Would you like to make any closing comments, sir? yeah thank you very much and hopefully we have been able to respond to your most of the questions I remember one or two questions we could not answer immediately and the participants can ask us offline we will be able to respond and if you have any more questions which you could not ask please come back we will be able to respond you thank you very much Thank you.

You can mail your questions to irc at gail.co.in.

Thank you. On behalf of Gail India Limited and Ilaria Securities India Private Limited, that concludes this conference. Thank you for joining us and you may now disconnect your line.