GAIL (India) Limited

Hi, good morning, everyone. Welcome to Q1 FI26 Earnings Call of Gale India Limited hosted by Macquarie. From the management team, we have Mr. Rakesh Kumar Jain, Director of Finance and other senior executives. So without any further delay, I would like to invite Mr. RK Jain for his opening remarks, which will be followed by a Q&A session. Over to you, sir.

Thank you, Mr. Joshi from Macquarie Capital. Dear friends from investors and analyst community, And my colleagues present here, a very good morning and warm welcome to this call for Q1 financial year 26. At the outset, I seek my apologies for being eight to nine minutes late because of unavoidable circumstances. There was a heavy rain in the morning and a lot of water logging. So my apologies for that. I take pleasure to inform that the Durgapur-Palkata section of Jagdishpur-Haldia-Bokara-Dhamra pipeline has been completed and dedicated to the nation by our Honorable Prime Minister on July 18, 2025. With the commissioning of this pipeline, now Bengal gas will be connected to natural gas pipeline and they need not take the molecule through cascade and HPCS3 GA will also get connected and there is a potential of 0.4 MMSCMD for these CGs on immediate basis once they start taking. Another development on July 23rd, 2025, Gale has got PNGRB's authorization for capacity expansion of Gale's Jamnagar-Loni LPG pipeline. The current capacity, as you know, is 3.25 mm TPA. With the authorization of expansion this capacity will increase to 6.5 mm dp. This pipeline will involve a capex of 5000 crore and it is on this project and the authorization as per authorization we have to complete this project within three years. Gail's result for quarter ended June 30th 2025 having declared yesterday and You must have gone through those results. And now I would briefly touch upon the major highlights for this quarter, post which we may open the session for queries. Gates gross turnover stood at rupees 34,735 crore in Q1 financial year 26, as against 35,602 crore in quarter four financial year 25, you can say which is almost at same level. Profit before tax stood at Rs. 2,533 crore as I guess 2,701 crore in Q4 financial year 25. This is down by 6%. And you know, mainly we receive dividend incomes in, we do not receive dividend income Q1 and that was around 239 crore in Q4, which is not available. So this may be one of the major reason for this deficit. Further, PBT for Q1 financial year 26 also includes one-off item that is Rs. 133 crore on account of differential settlement of unified tariff. This pertains to previous period, so that's why it is one-off item. The profit after tax for the quarter decreased to Rs. 1,886 crore as against Rs. 2,049 crore in Q4 financial year 26. and this is down by 8% and regions are safe. When we compare with the corresponding quarter for last financial year, that is Q1, financial at 25 as compared to Q1 financial at 26. Gale achieved turnover of 34,735 crore as against 33,623 crore. An increase of 3% in PVT stood at 2,533 crore as against 3,642 crore. And profit after tax is true that this quarter I see here, 1,886 crore, as I guess 2,724 crore in corresponding quarter last year. And now I will touch upon the physical performance of the company during the quarter as compared to previous quarter. Gas marketing volume during the quarter stood at 105.45 MMSCMD as a gas, 106.53 MMSCMD in Q4 financial year 25, almost a million difference. We can say it's a flat volume sale. Natural gas transmission is also almost flat as compared to Q4-25 in Q1-26. So there was a physical volume transmission of 120.62 mm CMD as compared to 120.83 mm CMD in Q4, financially at 25. And our capacity utilization, if you talk on overall basis, it is 58%. If you talk of integrated pipeline system, which is our major pipeline system, it is 67%. Polymer production is down to 177 TMT in Q1 as against 215 in previous quarter and this is normal phenomena. We basically take our annual turnaround shutdown during Q1 and therefore this reduction in production is because of that reason only. LST production is almost flat and it stood at 199 TMT as against 196 TMT in previous quarter. LPG transmission was also flat. It was 1131 TMT as against 1132 TMT in previous quarter and the capacity utilization is 99% during this quarter. Let me take you to consolidated financials of Q1 financial year 26 as compared to Q4 financial year 25. The consolidated turnover in Q1 financial year 26 stood at Rs. 35,369 crore as against Rs. 36,443 crore. BBT in Q1 financial year 26 stood at rupees 3029 crore as against 3240 crore in Q4 financial year 25. Profit after tax in Q1 financial year 26 stood at rupees 2369 crore as against 2492 crore in Q4 financial year 25. I will also take you through the Gaze EGDs. As you know, we have six geographical areas authorized under the Gaze Gale's balance sheet. So Gale is having direct authorization of six GAs and has infrastructure of 212 CNG stations and 4.4 lakh DPNG connections. During the quarter, 2,600 new DPNG connections were added and three physical value remained at 0.46 MMS CMD during the quarter with the share of APM gas at 0.169 MMS CMD and RLNG 0.291 MMS CMD. In the next year, GAIL's target to add around 85 new CNG stations and around 1,50,000 new DPNG connections. I will also take you through the performance of Q1 financial year 26 with respect to GAIL Gas Limited. As you know, this is our 100% subsidiary. In Q1 financial year 26, turnover of Gale gas stood at 2927 crore as against 3051 crore in Q4 financial year 25. BBT increased by 1% and stood at Rs. 146 crore as against Rs. 144 crore in Q4 FY25. PAT was up by 6% and stood at Rs. 108 crore as against Rs. 102 crore in Q4 FY25. Physical volume stood at 7.03 Mscmp. During Q1 financial year 26, Gale Gas along with its JV subsidiaries has added 23,593 new DPNG connections and three CNG stations. Gale Gas with its subsidiaries have an infrastructure of 11,30,000 DPNG connections and 664 CNG stations. In next two years, Gale Gas along with its JV subsidiaries target to add around 260 new CNG stations around two lakh sixty thousand new dpng connections i will also take you through the status of ongoing projects which gail is taking up uh pipeline projects uh majority of pipeline projects which mumbai nagpur jharsukra pipeline as you know this is one of the major pipeline project we are executing correctly jagdish for haldia bokaro damra pipeline all these pipelines are scheduled to be completed during current financial year in a progressing manner We have one more authorization of pipeline, Gurdaspur-Jammu pipeline, and this pipeline is scheduled to be completed in financial year 2026-2027. In respect of petrochemical projects, as regards the petrochemical projects, there are 60 KTA projects and 1250 KTA projects. These two projects we expect to be commissioned during current financial year. With respect to PDHPP, that is 500 KTA plant, this is delayed and is likely to be completed in next financial year. That is 26-27. Now I'll also take you through the capex of Q1 financial year 26. During this quarter, a capex of 3,176 crores was incurred, out of which 536 crores incurred on pipelines, 542 crores incurred on petrochemicals. There is a equity contribution of 1458 crores, operational capex and some other capex, 549 crores in CGD, ENP, renewables, etc., And now I will take you through the short to medium-term outlook of Gill's business. We have been giving you regularly guidance about our marketing margin and this quarter our marketing margin stood at Rs. 994 crore and as per our guidance which we gave during our analyst meet, annual analyst meet in may we said that during this year we will earn around four thousand to four thousand five hundred crore rupees of marketing bar it is this financial year as we have already earned 994 crore of marketing margin during q1 we maintain our guidance of four thousand to four thousand five hundred crore of marketing budget for the financial year 25 26. In gas transmission business, this segment has seen some kind of the unexpected decline in volume. We gave our guidance when we met with you in analyst meet. we gave a guidance of 138 to 139 mm scmd volume and subsequently we revise our guidance to 132 mm scmd and we also share the regions with you for the revision in guidance and let me just to keep you uh the Give the brief again, what were the regions? There was a reduction in refinery shippers volume around 3 million, power sector volume because of early onset of monsoon. We were apprehending at that point of time and actually it is becoming early onset of monsoon. It's a good monsoon this year. There is a reduction on annual basis of 1.2 mm CMD in sales and 0.4 mm CMD of shippers volume in all 1.6 mm CMD in terms of transmission volume. And fertilizer plants, this quarter we have seen an unscheduled shutdown of some of the fertilizer plants. And that has also resulted in 1.4 MMSC reduction. And one of them is KFCL, which is currently not operating. Due to above regions, we actually revised our guidance and as you saw that our transmission volume in Q1 was 120 plus and considering the expected transmission volume in remaining 9 months, we want to give the realistic realistic guidance we are not optimistic of around 132 revised guidance we expect this year on an average basis will end around 127 to 128 mmcmd of volume And this is because of the IRJ share, the frequent tripping of unplanned shutdown of fertilizer. And there is a slight reduction in CGD volume as we envisaged last year. Power, refinery, around 0.5 mm CMD in each of the sectors. Because of these regions, we feel that our revised guidance of 127 to 128 is achievable and therefore we want to revise it. In respect of coming financial year, we believe that our transmission volume will increase to 135, 236 MMS CMD. And this largely will come from natural growth of CGD, which is taking place and various refineries, which are coming up, Baroni, Paradi, Faldiya, Bowingo, Guwahati, and some other customers, which will be coming up along our new pipelines. In respect of polymer, polymer production stood at 177 as I shared with you as I guess 215 in previous quarter. The Pata Petrochemical Complex was also under shutdown in April 25. So there has been a loss of 249 crore. and largely why this is there is a loss there is a actually there is a reduction in the polymer prices by around thousand rupees as compared to q4 financially at 25 this is leading to the major major region for reduction and also in q1 we see the shutdown impact also comes we are taking all the measures to keep our Pata plant at a better level than this level. And we also expect that the current prices of the gas may also soften, so we will be able to improve. But as of today, this is a situation that we lost 249 crore on petrochemical plant Pata in Q1. LSE production stood at 199, I shared with you. We have posted PBT of 205 crore and there is a drop of 30% PBT from LSE segment as compared to last quarter. And which is primarily the regions we have shared, the deallocation of PPM gas and also subsequently allocation of new oil gas, which is a costlier gas. And prices of LSE has also reduced by 2000 rupees per metric ton I think this is the current quarter the Q1 quarter performance I have shared and also I have shared our revised outlook and also the outlook of other segments and now I hand you over to you Joshi ji take us through if any questions the our investors and analysts that we will be happy to answer those questions i am here and my colleagues from various departments the marketing department and the product the product the project development department the finance and city gas distributions are here we will be happy to answer your any any the questions you may have thank you very much

Thank you, sir. We will now start with the Q&A session. Participants, please use the raise hand feature to ask any questions. And in the interest of time, please limit the number of questions to two. With that, we'll take the first question from Nitin Tiwari from Philip Capital. Nitin, please go ahead with your question.