GAIL (India) Limited

during this conference call, please signal an operator by pressing star 10-0 on your touchtone phone. Please note that this conference is being recorded. I now hand the conference over to Mr. Probol Sen from ICICI Securities Limited. Thank you and over to you, sir.

Thank you, Palak. Welcome everyone to the three posts, Q3, FY26. conference call of Gale India we have with us members of the senior management headed course like Sri Rakesh Kumar Jain the director of finance of the company and other senior executives in this field without further ado I'll hand it over to him for opening remarks post which we'll have a detailed Q&A so over to you thank you Prabhal and good morning everyone and a very warm welcome to our quarter three

Financial Year 26 Earnings Conference Call. And here with me, I am joined by my senior colleagues from various sections of the departments of Gale India Limited. The quarter under review has been marked by continuous volatility in global energy markets due to uncertain weather conditions and evolving geopolitical dynamics, which has kept the HH and sport prices on higher side. Despite the adversities, Gale's natural gas transmission volume has shown a recovery as compared to earlier quarters. Marked by elevated consumption by fertilizer, refinery and CGT sectors. In addition, Gale has been able to seize the first mover advantage in preceding nine months by securing additional tie-ups with CGD customers, which has resulted in new tie-ups of approximately 2 mm CMD. I find it worth mentioning that during calendar year 2025, more than 15,000 capacity transactions have been booked through this open pipeline access portal, which is encouraging for us to continue to build and invest in the natural gas infrastructure of the country. let me begin with business updates for the quarter as you are aware that pngrb has issued an interim revision of natural gas pipeline tariff for gale's integrated natural gas pipeline network from rupees 58 to be 61 paisa to rupees 65.69 paisa per mmbtu and this is effective from 1st january 2026. This represents an increase of approximately 12.1% leading to projected impact of approximately 1200 crore rupees per annum. GAIL has filed a review petition that is post announcement of tariff. We reviewed the tariff and we filed a review petition on 26th December 2025 seeking an increase of 15 rupees per mm BTU the interim division uh let me give you we submitted approximately 78 rupees so we got 65 69 effectively there was a reduction but when we filed the review petition it became 15 rupees of same principles because as you know that the tariff is worked out on discounted cash flow methodology any delay in tariff approvals also results in increase in tariff Gail has the ability to get more. So therefore, the Rs. 12 has become Rs. 15 and we filed a review petition for increase of Rs. 15 per MMBTU to the interim tariff revision. Though the petition, Gail expects to bring up the factors like OPEX, CAPEX, transmission loss, revenue sharing in terms of the regulatory provisions, which have not been considered in the interim tariff order. With the fact from October 1st, 2025, GAIL has implemented a statewide CSG procurement of domestic gas from ONGC Gujarat to enhance tax efficiency for CGD customers. GAIL is continuously looking for tax optimization, how can we do it for various sections or various customers so that we have ability to give competitive prices. Gale has been offered to set up two fertilizer plants along the MLJPL corridor. Apart from the, you know, we will seek to go into fertilizer sector, these plants will also act as an anchor load for MLJPL. The investment for these two plants is Rs. 21,000 crore. The set proposal is having an in-principle approval award and the proposal is under evaluation stage now. Gale Global IFSC Limited, which is Gale's only owned subsidiary, has successfully commenced operations within the first year of its operation by extending an inter-corporate loan of Rs 290 crore to Bengal Gas Company Limited. energy as a strategic growth opportunity and is undertaking a significant expansion of existing clean energy portfolio of 145 megawatt we have that is 118 megawatt of wind and 27 megawatt of solar. Several large projects are currently in various stage of development or are under progress including 170 megawatt wind project in Maharashtra, solar project of 100 megawatt and 600 megawatt in Uttar Pradesh and approximate 30 megawatt 35 MW kept to use solar plants across various rain locations. Compressed biogas continues to be a strategic pillar of our clean energy portfolio. Following the successful commissioning of 5 tons per day CBG plant at Rachi, the board has approved investment for establishing 6 CBG plants. These projects are part of his commitment to establish around 25-30 CBG plants across India, for which the company is actively engaging with multiple state governments to secure land. These initiatives reflect our strong commitment to strengthen India's energy security while accelerating the transition towards sustainable and clean energy solutions and enhancing long-term value creation. This retail LNG business continues to progress steadily with a plan to establish 29 LNG stations. Development of LNG stations at five locations is presently underway. Further, these CGD entities have already commissioned 13 LNG or LCNG stations, making early step towards building a cleaner long-haul transportation ecosystem in the country. As you know, this is one of the major consuming sector and upcoming major in LNG consuming sector. I feel happy to inform our investors that the company has declared an interim dividend at the rate of 50% of face value for the financial year 2025-2026, that is Rs. 5 per share. Gains results for the quarter ended 31st December 2025 have been declared on last Saturday. I will briefly touch upon the major highlights for this quarter, thereafter we may open the session for queries. Gains turnover stood at Rs. 34,030 crore in Q3 FY26 as against Rs. 34,972 crore in Q2 FY26. Profit before tax in Q3 FY26 stood at Rs.2030 crore as against Rs.2823 crore in Q2 FY26 The profit after tax during the quarter stood at Rs.1603 crore as against Rs.2217 crore in Q2 FY26 Q3 vs Q3 i.e. Q3 FY26 vs Q3 FY25 On competitive quarter basis, deal achieved turnover of Rs. 34,030 crore as against Rs. 34,907 crore in corresponding period of last year. PBT stood at Rs. 2,030 crore as against Rs. 5,029 crore. And PAT stood at 1603 crores against 3867 crores. And as you know, this is mainly because of an exceptional income we got last year, quarter 3, that is 2440 crores, which was recorded by the company on account of arbitration settlement with SMCS. Now I will touch upon the physical performance during the quarter. Gas marketing volume during the quarter stood at 103.98 MMSCMD as against 105.49 MMSCMD Q2 financial conditions. Natural gas transmission volume improved to 125.45 mmHg CMD in Q3 FY26 as against 123.59 mmHg CMD in Q2 FY26. The average capacity utilization was 66%. Oliver production was almost flat at 219 TMT in Q3 financial year 26 which stood at 220 TMT in previous quarter. LFC production stood at 199 TMT as against 221 TMT in previous quarter. LPG transmission was 1188 TMT as against 1167 TMT in previous quarter. The capacity utilization was 103% during the quarter. Now, let me take you through the consolidated financials of Q3 financial year 26 versus Q2 financial year 26. The consolidated turnover in Q3 financial year 26 stood at Rs. 35,253 crores as I guess, Rs. 35,594 crores in Q2 financial year 26. The PVT in Q3 financial year 26 stood at Rs. 2165 crores as I guess, Rs. 2565 crores in Q2 financial year 26. The profit after tax in Q3 financial year 26 is stood at 1756 crores versus 1972 crores in Q2 financial year 26. As you know, Gale also is directly dealing with six EGDs, just to take you through the performance of those six EGDs. Gale has six direct operations of six VAs, has an infrastructure of 215 CNG stations and 4.64 lakh DPMG collections during the quarter 2 new CNG stations and 15,990 new DPNG stations were added. The physical volume stood at 0.55 mm CMD. In next 2 years, we will 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 our 100% subsidiary gas limit kit. In Q3 financial year 26, turnover of Gale gas is stood at 3292 crore as against rupees 3235 crore in Q2 financial year 26. PVT stood at rupees 143 crore as against 148 crore in Q2 financial year 26. The decrease is mainly due to increase in input gas cost and exchange rate resulted in reduction in margin. PAT is stood at rupees 106 crore as against 111 crore in Q2 financial year 26. The physical volume stood at 7.8 mm x cmd. During quarter 3, 1926, GAE gas along with its JBE substrates has added 71,411 new DPMG connections and 9 CNG stations. GAE gas with its JBE substrates have an infrastructure of 12,46,000 DPMG connections and 674 CNG stations. I will also take you through the status of ongoing project. As of December 2025, operational natural gas pipeline length has crossed to 18,000 kilometers. Calendria 2026 will be an important year for project commissioning, with several major pipelines scheduled to come on stream, like Mumbai, Nagpur, Jharsugunath. That is the remaining portion I am talking about. The Jagdish-Muralidia project, KKMVPL phase two, Gurdaspur-Jammu pipeline, Together these projects will significantly enhance reach, reliability and regional balance in national gas grid. GEEL is also actively considering participating in bidding for new petroleum and petroleum product pipeline, largely LPG pipeline. Petrochemicals project. As regards petrochemical project, this calendar year will be an important from petrochemical project point of view as well. Major projects such as GEELS 1250, KTA, PTA, plant at gmpl uh 500 kta periods to be planted usara should rule to be commissioned during this calendar year and 60 kta pp plant at pata is very advanced stage of commissioning may be commissioned in a day or so capex for quarter three financial year 26 during the quarter a capex of rupees 2186 was incurred out of which 804 was incurred on pipeline 455 was incurred operational capex another was 620 crore and rest was on cgd emp enable equity contribution etc i will also take you through the segment wise outlook for short term the pbt from gas marketing during the quarter stood at 779 crore the pbt from gas marketing during the nine year student rupees 3000 crore we are expecting to achieve marketing margin from gas marketing segment in financial year 26. In gas transmission segment quarter 3 financial year 26, average transmission volume improved to 125.45 mm CMD as compared to 123.59 mm CMD during Q2 financial year 26. Further, the volume during the month of December 25 stood at 128.65 MSM. This reflects that there is now a recovery phase or there is a growth in transmission business after we have seen the quarter one, which was not to our expectations. Further, the volume during the month of December 2025 stood at 128.65 MSM, signifying the return of volume to normal levels. Average transmission volume of nine months Financially year 2026 stood at 123.23 mmHg. The recovery in gas saturation volume is primarily on account of elevated consumptions by fertilizer, refinery and CGT sectors and reduction of gas supply on two sections after completion of repair job which had got disrupted during QE2 Financially year 2026 due to extreme monsoon and flash floods in North India. We are hopeful of achieving our gas transmission guidance of 124 to 125 mm CMD for financial year 2025-2026. Polymer production stood at 219 TMT as a gas suit on TTMT in previous quarter. There is a loss of Rs. 483 crore during quarter 3 financial year 2025-2026 due to increased input gas cost repeat depreciation and decline in polymer prices. segment is likely to be at similar level for remaining part of this financial year our likely softening of input gas prices various measures being taken for cost of optimization and improvement of efficiency may lead to improvement in performance of this segment in coming year lxc production is stood at 1299 tmp during q3 financial year 26 as a gas to 21 ta metric ton in in previous quarter with a PVT of 29 crore. The PVT for LFC segment has been hit by drop in prices on account of low prices coupled with reduction in allocation of newer gas from 0.3 mm CMD to 0.2 mm CMD. The management is actively engaging with Ministry for more allocation of domestic gas. In addition to our operational and financial performance, I would also like to highlight the progress of project Sanjaya 2, our flagship project which is focused on maximizing profitability across core business segments through targeted improvements enabled by advanced data analytics. Phase 1 of project has been successfully completed with 30 approved use cases with an expected benefit of more than Rs. 600 crore on net present value basis in the coming 5 years. This is after net of CapEx, which we are going to incur around $146. In addition to monetary benefits, Sancher2 is also helping build internal capabilities. Gale is establishing a center of excellence comprising existing Sancher2 team members and further strengthening a team so that analytics, optimization, and value creation become embedded in the way Gale operates across all business units. That's all from my side regarding over your performance and projects now the management is available management of company is available and we will be glad to address any query that you may have over to you Prabhat thank you sir can we start the Q&A thank you very much we will now begin the question and answer session