GAIL (India) Limited

Ladies and gentlemen, good day and welcome to Gale India Limited Q2FY26 on X Conference Call hosted by Phillip Capital 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. Nishant Tiwari. Thank you and over to you, sir.

Thank you, Shruti. Good day, ladies and gentlemen. On behalf of Philip Capital India Limited, I welcome everyone to Real India Limited's second quarter FY26 earnings call. Today, we have the pleasure of having with us the senior management team of GAIL, led by Director of Finance, Sri R.K. Jain. I will now hand over the floor to the management for their opening remarks. which I will follow by a close question and answer session. Over to you, sir.

Thank you, Nitin. Friends from the investors and analyst community, a very good afternoon and welcome to Gaze Earning Call for Q2 Financial Year 2016. At the outset, I thank you all for attending this meeting. Let me first begin with the latest business updates. It gives me It is my pleasure to inform you that on October 16, 2025, Gales-Shirkakula-Mangul pipeline, which is a 422-kilometre, has been dedicated to the nations by Honourable Prime Minister. Further, physical progress of Mumbai-Nagpur-Jharsukta pipeline has reached to 97% and PASO approval for Mumbai-Nagpur section, which is 693-kilometre, and Chhattisgarh Purisa section which is 489 kilometer has already been received and gas is in under process. The remaining pipeline is in advanced stage of completion and is scheduled for commissioning by 31st December, 2025. On September 9th, 2025, GAIL got PNGRB authorization to lay, build and operate pipeline from Vijayapur to Beena. This will connect to the BPCL Beena refinery The pipeline will have a capacity of 3 mm CMD and this is 105 km length and involve a capex of 450 crore. The timeline for laying this pipeline is 3 years. This pipeline will become part of integrated natural gas pipeline system of Gale. As already informed earlier, Gale has got authorization for capacity expansion of JLPL LPG pipeline. from existing 3.25 MMTPA at present to 6.5 MMTPA based on current tariff rates. This will increase GIL's revenue by approximate 700 crore rupees. As you know, the tariff is also increasing every year by 3.4%, so that will further add to GIL's revenue. And it will also improve GIL's bottom line around 600 crore rupees per annum at the EBITDA level not bottom line at EBITDA level and again the increase of tariff of 3.4% will have further addition to it. Gains result for the quarter ended 30th September 2025 have been declared today. I will briefly touch upon the major highlights for this quarter. Thereafter we may open the session for your queries. First of all I will take you through the financial highlights of the quarter. Gains turnover in this quarter, that is Q2, is almost flat, which is 34,972 crores, as against 34,735 crores in Q1 financial year 26. Profit before tax stood at Rs. 2,823 crores, as against 2,533 crores in Q1 financial year 26. This is up by 11%. The profit after tax during the quarter increased to Rs. 2,217 crore as against 1,886 crore in Q1 financial year 26. This is up by 18%. On competitive quarter basis, that is quarter two of this financial year versus quarter two of financial year 25, GAIL achieved turnover of rupees 34,972 crore as against 32,810 crore in corresponding period of last year. An increase of approximate 7%. Profit before tax is to that rupees 2823 crore as I guess 3453 crore. This is down by 18% and profit after tax is to that rupees 2217 crore as I guess 2672 crore down by 17%. Now I'll take you through the physical performance during the quarter. Gas marketing volume during the quarter is to that 105.49 mm SCMD as against 105.45 mm SCMD in Q1 financial year 26. The natural gas transmission volume was 123.59 mm SCMD in Q2 financial year 26 as against 120.62 mm SCMD in Q1 financial year 26. The average capacity overall basis if we take off the total capacity, authorized capacity is 39%, but I will talk to the integrated natural gas pipeline system, which is the main revenue earning system. As per the capacity worked out by PNGRB, the applicable capacity for tariff determination for 2025-2026 is 150.46 mm SBMD, and considering the volume flow in this integrated pipeline system of 111.76 mm SBMD, The capacity utilization for this pipeline was 74.28%. Follower production was back to normal. Level of 220 TMT in Q2 financial year 26, which is stood at 177 TMT in previous quarter due to annual turnaround. Liquid hydrocarbon production stood at 221 TMT as against 199 TMT in previous quarter. LPG transmission was 1,167 TMT as against 1,131 TMT in previous quarter. The capacity utilization was approximate 101% during this quarter. Now I will take you through the consolidated financial highlights for quarter two financial year 26 versus quarter one financial year 26. The consolidated turnover in Q2 financial year 26 stood at rupees 35,594 crore as against rupees 35,369 crore, almost flat. The PBT in quarter two financial year 26 stood at rupees 2,565 crore as a guess 3,029 crore in quarter one financial year 26. The profit after tax in Q2 financial year 26 stood at rupees 1,972 crore as a guess 2,369 crore in Q1 financial year 26. Gail, as you know, Gail also has got six geographical areas authorized city gas distribution. I will also share the performance of these six geographical areas. Gale has an infrastructure of 213 CNG stations and 4.5 lakh BPNG connections. During the quarter, 13,700 new BPNG connections were added. The physical volume stood at 0.46 mm CMD. In the next two years, Gale targets to add around 85 new CNG stations and around 1,50,000 new DPNG connections. You know that Gale also has got 100% subsidiary exclusively dealing in retail business. Now, I will also briefly touch about the financials of Gale Gas Limited. In Q2 financial year 26, turnover of Gale Gas is 2,235 crores as a gas 2,927 crores in Q1 financial year 26. PVT increased by 1% stood at Rs. 148 crore as a gas, Rs. 146 crore in Q1 FY26. Profit after tax was up by 3% and stood at Rs. 111 crore as a gas, Rs. 108 crore in Q1 FY26. The physical volume stood at 7.72 mmHg. During Q2 FY26, Gale Gas along with JVE subsidiaries has added 44,512 new DPMG connections and one CNG station. Gale gas with its JVE subsidies have infrastructure of 11,74,000 DPMG connections and 665 CNG stations. I will also touch upon the ongoing projects with Gale. Pipeline projects. SAPL as I already shared is commissioned and MNJPL, JSPDPL, KKMBPL phase 2 are scheduled to be completed during this financial year and Gurdaspur-Jammu pipeline is scheduled for completion in financial year 26-27. Petrochemical projects I will first share about the 60 KTA polypropylene at Pata and sorry 60 KTA polypropylene at Pata and 1250 KTA PTA plant at GMPL are scheduled to be commissioned in current financial year whereas 500 KTA PDHPP plant at USAR is expected to be completed in financial year 27. CapEx for quarter 2 financial year 26 during the quarter the CapEx of rupees 1662 crore rupees was incurred out of which 784 crore was incurred on pipelines, 514 crore was incurred on petrochemicals, 226 is operational capex and remaining approximate 138 crore on CGD, ENP, renewables and equity investments. Now I will share also the segment wise outlook for short to medium term. The profit before tax. From gas marketing business during the quarter stood at Rs. 1,227 crore. The gross margin during the quarter stood at Rs. 1,551 crore. The PVT from gas marketing margin during H1 financial year 26 stood at Rs. 2,221 crore. The gross margin during the H1 financial year 26 stood at Rs. 2,866 crore. At PBTA level, we are on our path to achieve the annual guidance of 4,000 to 4,500 crore from the gas marketing segment in financial year 26. In the gas transmission segment during quarter two financial year 26, average transmission volume improved to 143.59 mm CMD as compared to 120.62 mm CMD during Q1 financial year 26. Average transmission volume for H1 financial year 26 is two direct to FAT 122.11 mm at CMD. From gas transmission point of view, the current pressure has not been so good for gale. We had to revise our guidance earlier. The main reason for this downward revision was delaying pipeline connectivity to refineries, unplanned shutdown and tripping of fertilizer plants, leak of demand from power sector due to moderate summer, early onset and above average monsoon. The situation was further burdened by higher than usual pricing of natural gas in the spot market, which impacted the consumption in domestic market as refineries and industries switched to alternative fuel. Further, due to extreme monsoon and flash floods in northern India, gales suffered pipeline disturbances at four places, which are expected to be restored by the year end. Currently, the services are being managed partially through alternative arrangements. This also has impacted the transmission volume, which will be replenished as soon as the pipelines are operational again. Due to above-enforcing circumstances, the annual transmission volume for financial year 2025-2026 is expected to be at the level of around 123 to 124 mmHg. However, considering that most of the oil sector may not be there and there will be normal growth and commissioning of new pipeline that is SAPL and MNJPL. Gale expect transmission volume to be increased by around 8 to 10 million and we expect our volumes to be around 33 to 134 MMFPMD in financial year 27. Polymer production stood at 220 TMT as against 177 TMT in previous quarter. There is a loss of rupees 299 crore during quarter two financial year 26 due to increased input gas cost. This segment is likely to be at similar level for remaining part of the year. However, various measures like construction of dedicated pipeline, that is C2, C3 pipeline, installation of advanced process control, debottling and 60 KTFPP plants are being taken for cost optimization and improvement of efficiency. Since mostly, since HS gas is being, mostly HS gas being used as an internal consumption by PATA, PC plant and HH price have been unusually higher during this year which is expected to be so far in coming financial year. These factors may hopefully start giving positive results from next financial year onwards. LSE production is 221 TMT during Q2 financial year 26 as against 199 TMT sorry, 199 TMT in previous quarter with a PBT of 112 crore. There is a drop of 45% in PBT from LSE segment as compared to previous quarter, which is primarily on account of reduced price. As you know, the LSE price on an average basis has gone down by approximately 4600 rupees per metric tonne. Gale's new well gas allocation for LPG sinkage has been reduced from 0.32 mmHcmd to 0.2 mmHcmd with effect from 1st October 2025. Estimated impact on production will be around 33 TmT for S2 financial year 26. Gale management is constantly taking up the matter for further allocation of domestic gas or LST to enhance the capacity utilization of our LPG plants. In addition to above operational and financial performance, I would like to highlight that companies taking proactive measures to implement initiatives for maximizing profit and make our company future ready with introduction of advanced technologies and AI-based projects. Project structure 2, our flagship project is focused on maximizing profitability across core business segments through targeted improvements enabled by advanced data analytics. Under the Above project, GAIL is implementing 30 huge cases leveraging advanced technology with an estimated capex of 146 crore. These huge cases together are expected to provide the operational saving of approximately Rs. 600 crore on 5-year NPV basis in addition to huge quantitative benefit in optimization of process, manpower and material. That's all from my side regarding the overview of performance and projects. the management of the company is available and we would be glad to address any query that you may have. Now, I hand over to you, Nitin.