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?