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

Anyone who wishes to ask a question may please 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. Ladies and gentlemen, we will wait for a moment while the question queue assembles. The first question is from the line of Vivek Anand from Ambit. Please go ahead.

Hi, thank you for the opportunity. I have two questions. The first one is on the transmission business. How do you see the volume ramp up for FY27 and 28? And what do you think the global gas supply dynamics are looking like when it comes to these assumptions of gas demand? That's question one. The second question I'll ask after you answer this one. Thank you. With respect to volume ramp up in financial year 26, we have been giving guidance time to time and in terms of our guidance, we are expecting at least 134 to 135 mm CMD of volume in coming financial year. uh we will end this financial year in fact around 124 to 125 and we we are expecting uh at least 10 million volume which anyway should have been available this year because there were various factors because of which we could not achieve that so in order to give even further details of that almost 4 million volume we are expecting to come from natural growth of cgd and then We lost power volume this year. Almost 2 million volume power we lost. We expect that to come back. We expect that to come back. And with new refineries, volume and old refineries, these three million volumes will come from there. But later we have seen the structure during the year that is likely to come up. So even if that volume which we lost during this year, including the CGD growth of 4 to 5 million, we expect to reach 134 to 135 mm CMD in financial year 27. Regarding global gas supply, the global gas supply is abundantly available from coming financial years. As you know, a lot of capacities are coming on stream and that is helping the price to go down. We expect the price to soften. In fact, we have a lot of offers available at a very, very competitive price and that will also increase the boost of gas consumption in our price-sensitive market. Okay, thank you for this. Just one follow up or additional question on the new gas contracts that you're signing. Are these contracts primarily Brent linked or do you have a mix of baskets to link the price to? When we source the volume, we have two things in our mind. One, that it should be cheapest available volume to our country because you know that our market, we do not go based on any geography or any index. So we are evaluating those offers which we are discussing but currently we are feeling that Brentlink contracts are, because this is all dynamics, Brentlink contracts are more competitive as compared to Henry Hublink contracts and therefore as a portfolio player we always want to keep a mix of Brentlink and Henry Hub. So, we are looking for immediate basis on Brentlink contract. We are of course also discussing Hanria, but we feel that the Brentlink contract may be available at a competitive rate as compared to Hanria during current market, I'm telling you, because I'm not telling that we will not go for Hanria with the dynamic situation. Right, that really helps. Last question is the current portfolio that you have of long-term sourcing. which is around 17 million metric tons. Where do you want to take this to? Let's say in the next couple of years? We have a stated statement about this. By 2030 at least, I am using the word at least, we want to increase our portfolio to around 6 to 7 mm dp more from current level. So, though demand in the country will be significantly more, at least 22-23 mm dp we want to increase. And when we see that more demand is coming, which is likely to come, we'll further take a point. All right. Thank you and all the best.

Thank you. Thank you, sir. The next question is from the line of Puneet from HSBC. Please go ahead.

Yeah, thank you so much. So you talked about this 6 to 7 MTPA additional LNGs. by 2030, when should one think that you'll start contracting these

We will go progressively. We are already in the market for sourcing of at least 12 cargo per annum. We are already in the market. We are having discussions with various suppliers. So such a huge volume you cannot expect. We also do not intend to contract in one go. So progressively we are going because we are also seeing what kind of index, what kind of supplier, what kind of flexibility is available. So progressively we will reach to 22, 23, that is we will be adding 6 to 7.

And are you seeing early signs of price correction coming in or you're still waiting for the glut to really start coming and then price we'll see?

Actually, we believe that already the competitive offers are available. Because when we are talking of this contracting, it is not from 26. We are talking of 27, 28. For that, the suppliers are ready to offer the competitive price. So, we do not expect that the price will further crash. Of course, you cannot predict anything in oil and gas business, but still based on our analysis that the offers currently available are quite competitive and therefore we have really interest in going ahead.

And if you can also talk, when do you think the tariff review will happen? PNGRB said 1st April 2028. Do you see a scenario where it can happen earlier?

I want to spend good time on this subject. Actually our last tariff revision had happened from 1st April 2023. And in normal course tariff revision, if you go law of the land, that is regulations, our natural need tariff revision was due in April 2028. But when April 23, the tariff was revised, PNGRV had then moderations of around Rs. 10 per MBTU, largely on two accounts. One, on consideration of system use gas at $3.61 per MBTU and capacity on a provisional basis. And the, you know... $3.61 per ambiguity was not even a domestic price. That actually, because of that, we filed an appeal with the regulator to consider that. But the appeal was taking time because of some issues and we were asked by PNG, are we filing tariffs So whenever you file the regular tariff, you file everything. So we filed everything and accordingly our submissions in August 24 was giving us a tariff of 78 rupees. But when PNGRB approved the tariff, they approved 65 rupees 69 paise. In fact, they only approved two parameters for which we went for appeal. But we believe that normally interim tariff concept is not there. So we again filed an appeal of 15 rupees. Now it has become 15 rupees. But while even doing interim relief, we believe that two parameters should have been considered differently than what PNGRB had done. They considered higher volume but did not give the transmission loss on higher volume. There is a regulation that if you transport the volume, you have 75% of capacity, 50% of the revenue the transporter can retain and 50% can be passed on. So PMG are considered higher volume, but that has not been given. We feel apparently these are mistakes apart from other parameters. So, we filed an appeal with PNGRB. We are positive and we believe that that appeal will be considered. Otherwise, the tariff was due in April 28 and they have not said anything that will be cut or this will be cut. They have considered. They have told me the order that that will be considered in 28. So, if it is considered in 28, what, 15 rupees you are asking will become 17 rupees like a fixed deposit in a bank with a 15% pre-tax return.

Okay.

and lastly if you can just talk the deposition will hire you sir may we request you to come for follow-up yeah sure thank you sir ladies and gentlemen in order to ensure that the management is able to address questions from all the participants in the conference call please limit your question to two per participant the next question is from the line of Samaya from adventures park please go ahead

Thanks for the opportunity, sir. The first question is on the fertilizer project that we plan.

If you could just help us with, in terms of, in case we start to invest, what will be the timeline? And what is your thought on this CAPEX of 20,000 crores? How did we compare with the brownfield? So we have an expansion option on this, plus also what is the project return that we are looking at? Timelines, cash flows and project return. These three things if you could help us. Thank you.

So we expect a timeline of three years from the date board approves this proposal. Principally it is approved but it is subject to policy on energy and the subsidies by government. So we are working on that. Regarding the returns, it's an assured return, if it is in terms of the policy, guidelines of fertilizer. So it will be an assured return. That is not a concern for us. And cash flow, since it is a three-year project, so in these three years, the cash flow will come maybe initial one year, maybe 10%, 20%, then 50%, 60%, and remaining like that cash flow will happen.

So there is a capital grant or subsidy angle to this, which at a later point... No capital grant.

No capital grant. It is subsidy which is available to fertilizer plants. Okay, understood. Fertilizer plant subsidy means the production subsidy. After production, because this fertilizer is sold at a price notified and the producer gets the differential.

Understood, sir.

But based on the current prevailing economics, so what do we think of the rough cut as well as the project IRR for this?

What is the project IRR of this? It's 12% equity IRR.

Okay. So second question is on the marketing side. So one, in the month of Jan, entry has been quite volatile.

It has spiked almost to $6, $7. How do we see this impacting us in the near term?

That's the first part. Second part, sorry, I missed your initial remarks on the marketing guidance outlook. And also in the presentation, in terms of the overseas sales, this number has moved to close to 12 MMSMD for the nine-month FY26, which was 6-7 MMSMD. I mean, earlier it looked like the international volumes would continue to decline and be diverted to the domestic market, but the last nine months it has gone up. If you could just clarify on this.

So marketing guidance, we have been given time to time. Initially, when the year began, we gave 4,000 crore rupees of marketing margin we will be able to earn. But seeing the Q2 performance, we were expecting somewhere 4,000 to 4,500. But the question you raise about volatility, so we still maintain that we will be somewhere 4,000 plus of marketing margin. uh that's the guidance and second question sorry one clarification is that when we say 4000 this is you're referring to fi 26 this financial year or referring to the frequency this is financially i'm talking of this financial year so for fi 27 earlier i mean we can expect a similar run break or we'll be guiding we have been giving this guidance for uh 26 also 27 also we are not saying that we will be having any different number than that because our volumes are same, the marketing kind of, you know, the challenges are same so we expect next year also we earn 4000 crore rupees of marketing margin.

The second part was on the overseas sales increasing. This is last 9 months.

My colleague Mr. Satish Sinha will respond. During the current year we are taking various optimization measures. So earlier we used to have distress and so now we are doing four base basis.

So due to this our overseas supply has increased, overseas sale has increased.

Thank you sir. The next question is from the line of Amit from Axis Capital. Please go ahead.

Hi, good morning. Thanks for the opportunity. On Petchem input gas cost, could you tell us what was the number in Q3?

Just hold on. $11.21. $11.21 per MMBT. I can get $10.49. I think it's $10.49 in the previous quarter.

In Q2. Okay. And last year, did you have the same number for last year?

Last year, it was $9.45.

Okay. And with Henry still being higher than last quarter, so this number should go up more in Q4?

Yes. Yeah, you are right with Henry has gone higher but we are talking with respect to one month settlement that is January. So after January, February has softened if you see the current market of HH. March is still there because January normally we have seen because of the severe winter it goes high. So, February and March, we do not see any challenge. January, yes, there is a challenge. So, we have a lot of options. First is risk mitigation measure by marketing in an international market. So, or doing some optimization measures. So, we are working on it, but on the face of it, what you are thinking may be correct because today it has gone up to part of that certainly we have to bear the cost.

All right. And the entire feedstock would be Henry Hub Link LHG or is there any other gas in the mix?

No, not necessarily Henry Hub. Henry Hub is quite, yes, significant amount is Henry Hub also. But we are supplying Brent and also the available squat prices, whatever, because we have a lot of volumes available. So we see whatever possible we supply to water plant, but is it not necessarily hand-rehabbed? Largely it's hand-rehabbed, but not necessarily everything is hand-rehabbed.

Understood. Is it fair to say that you will continue to run the plant at 100% utilization even if RNG is staying high, or would you look to kind of curtail that as well?

So I will come back to again. February and March we don't see any challenge. January prices settled for February, yes there is a challenge. December price settled for January, there was no challenge. It was $4.69 per MMBTU. So now coming back to your question whether we run 100%, now we are in the end of the financial year. So if you stop for a month or two, it actually impacts the energy efficiency. It also impacts the customer sentiment. So for a smaller period of month or so, We do not take a call for shutting down. This happens in business, cyclical business, certainly impact. But second positive thing has happened in last one month. The prices of polymer has gone up. This month it has gone up by 2 rupees 50 paisa per kg. 2,400 rupees per metric ton and before that 1,000 rupees per metric ton. 3,500 rupees per metric ton price has also gone up. One way the input cost has gone up, yes. Another side that price of polymer has also increased.

Understood. And earlier you had mentioned you were also thinking of diversifying into ethane. Any progress there?

We have not said that we are diversifying anything. What we are thinking, because this is only a gas-based plant in North India, what we are working on is to optimize or take various cost optimization measures to make this plant profitable on a sustainable basis even at this price. So what we are doing First optimization measure we have taken, we are putting one pipeline carrying C2, C3 from our Vijayapur plant to Patta. Currently what we are doing, we are extracting C2, C3 at Vijayapur, mixing in natural gas pipeline, re-extracting it. During this process, we lost 10% energy. So that one optimization measure we have already taken and this pipeline will be completed in one and a half years from now. Second, what we are working on it, this is quite under... you know your consideration that we lay a dedicated ethane pipeline for any of the project and and actually source ethane instead of using gas we we actually directly use ethane ethane it has been seen that is a uh cheaper than gas and it will give 20 25 percent more yield as compared to gas and if we are able to do that for which we are working uh this plant will become Even at the current level of prices, whereas the price of polymer, if you see in 29 onwards, any forecast is suggesting will go significantly high because today the capacity is higher and demand is less. This situation is going to be reversed in coming three years.

Just a last question on the LPG and liquid hydrocarbons business. The volume has been curtailed in this quarter because of the APM reduction. Is this a normal run rate now, the 200 kT volume?

I think so. Right now, we are having non-APM gas allocation around 1.12 mmHgMd and new well-filled gas around 0.2. So, total gas availability for the LHC segment is around 1.32. So, our production will be around 2 lakhs per quarter.

Okay. Understood. That's all from me. Thank you.

Thank you, sir. The next question is from the line of Vartharajan from Antic Limited. Please go ahead.

Thank you for the opportunity, sir.

Sir, when you, in your opening remark, you highlighted that the hedgerow price movement is adverse. Is it only adverse from the point of view of use as a feedstock in petrochem or has there been some kind of an impact on the trading side as well?

So, first question, yes, it will certainly impact to some extent on the petrochemical project because the January price settled at higher. With respect to the natural gas marketing, we have some open volume. We have been telling that we source 21 MMSCMD from United States, almost 3 MMSCMD we have kept open. Second, there are certain take-or-pay contracts where we have signed 60-70% take-or-pay. So if Henry Hunt prices goes higher and becomes uncompetitive as compared to the crude linked contract, it's a consumer behavior that they restrict themselves to take or pay or around that level. That certainly put us in a situation to market that volume at a prevailing price and certainly the open volume also some time provides us the you know arbitrage of differently different index is costlier so yes it may to some extent impact us but our guidance with respect to marketing margin we have been maintaining of 4000 crore rupees factoring in all likely situation or whatever is prevailing currently

In that case, would you be in a position to give us some kind of a split in terms of volume with regard to this oil-linked selling contract?

Can you come again?

So you were mentioning some oil-linked contract that is there because of which you have to curtail. So that particular volume in terms of how much of volume out of that U.S. contract is actually oil-linked that you are placing?

No, no, I have not said so. What I have said, we have 21 MMSCMD of volume we source from United States. 3 million volume we have kept open. That means it is not back to back basis. That is index and market. So that is the only challenge what we are telling. And some customers' behavior, if the prices change other way, they restrict themselves, take out pay and source from other place. So that happens regularly.

Just to get it clarified, so the remaining 18 are all back-to-back contracts with gas-linked contracts.

Majority is on back-to-back, and some volume we take swaps. So that's how we make it back-to-back. That is swaps, crude versus helium.

My second question was on the capex costs of all these projects. Is there any project where we are seeing an escalation in the capex costs?

So since most of our current projects are almost at the verge of completion and their cost has become almost kind of certain, PDHPP 11,258 crore is almost, we will be completing that project within that cost. PP is already under commissioning, no likely. Mumbai, Nagpur, Jhansukhda accepted some portion, we are almost complete. Chitrakoot and Mangol accept this per line, we are completing. So nothing... because these projects are at a very significantly advanced stage of completion and we have visibility that there is unlikely of cost escalation except that this one here, which may see some cost escalation, not any other project. Minor escalation. Minor, minor, that's what I think.

Great, sir. That is very useful. Thank you and all the best.

Thank you, sir. The next question is from the line of Sabri Hazarika from MK Global. Please go ahead.

Yeah, good morning, sir. Two questions. Firstly, you mentioned on the Henry Hub price, which is your price for January, you said it is 4.69, right?

January supply price, actually applicable for price for January, price settled in December, right? So price settled in December is 4.69, which is applicable for January supply. The price settled for January 7.46, which is applicable for current month, that is February. So that has gone up significantly, so that will have impact on the FedChem, right? Yeah, yeah, I admitted that. But we will take some optimization measures. Can we market it instead of bringing that gas to this market? Can we market it to Europe where prices are good? And then we source some spot or some group contract gas or available in our portfolio supply. So those optimization measures we will take. But on face of it, it has gone up. And a small follow-up to this. This 4,000 crores, when you say 4,000 crores, you mean the EBIT, right? I mean PBT. You mean PBT, right? So Q3, what was the PBT then? I mean EBIT was 4000 crore, but I think below EBIT... So you reduced our 69 crore from 3000 crore around 2-2-3-1. 2-3? 2-2-3-1. 2-2-3-1 was the... 2-2-3-1.

Yeah.

Okay, that was... For half year, first half. Okay, 2 to 3.1 crore was the PDP for half year versus that you are expecting 4,000 crore plus for the full year, right? Yeah, yeah. Actually, some events are taking place because of geopolitical situation. Has anybody envisaged that the exchange rate will touch to 92?

Right, right.

So these factors are also, you know, making us to calibrate but we still maintain 4,000 crore. Right sir. And second question is on your ethane sourcing. So you will set up another, I think right now you are setting up Vijayapur Pata, but if you were to import ethane from US and also you have to set up another pipeline which will be set up somewhere in the Hazira Dahej belt. Is that right? So maybe Hazira, maybe Dahez, maybe Dhabol to Vijayapur. We have all the options available because, you know, we have our own terminal as well. We are expanding the capacity of Dhabol from currently equal of 5 MTP to 6.3, already sanctioned. And we have planned to gradually increase to 12.5 MTP. we have all the options available and we are working on that which terminal uh we should plan for bringing it in and utilize because anybody will prefer that you should utilize your own terminal you got it sir thank you so much and all the best thank you sir the next question is from the line of pratyush from incorrect equities please go ahead

Hello, sir. Thanks a lot for giving this opportunity. I have two questions. First is regarding your sourcing.

So, you know, since you have mentioned it a couple of times that, you know, you source about 10.5 million turn-off contracts. So, can I get the bifurcation of the contracts?

Like, what kind of volumes are getting from Raskas? What kind of volumes are getting from Exxon, Chevron, etc.? So, it's a first question. And once you answer it, I'll, you know, go to the second question, which I have in my mind.

So we have 16.53 MTP of contracts existing. Out of that, we have 5.8 million tons from United States on Henry Up and 0.75 from Middle East on Henry Up. That makes 6.55 million tons, right? Then 4.5 million tons from, again, gas on crude link. Approximately 3 million tons again from one of the marketing company Safe on Groovelink. 0.42 million tons again on Groovelink from, you know, through PLN. And we have signed one more contract for Vitol for 1 million tons. That is Groovelink. And Airlock another 0.53 million tons of Groovelink.

Go ahead, sir. Thanks a lot.

The second question is regarding the downstream players, you know, the fertilizer, the CBD players and, you know, other players whom you actually give the gas.

So I wanted to ask regarding the marketing margins of the contracts, because in the last quarterly call, you mentioned about, you know, there's a 7.8 million ton of contract in which you have a sort of fixed margin.

you know and which is majorly sold to fertilizer players so you know does it involve that uh cdd companies also and this 7.8 is something which you majorly get from the raskis is it something which which i am understanding correct uh so that is the one point and second is saying what's the typical marketing for the other 7.2 million contract in which you do not have a typical fixed kind of margin which is there in the 7.8 billion actually

It's not last guess, we are getting 7.5 or 7.8, only we are getting 4.8 as of now.

Yes, sir.

So, linked at 0.75 on Henry M. That is one question. Second, largely our volume, I have said 3 mm CMD, you can say 0.75 mm DPA or maybe 0.8 mm DPA is open. all other volumes we have marketed either back to back or if not back to back we are taking swaps for mitigating risk time to time and when we have marketed these volumes on back to back or through swap there is a fixed margin now fixed margin varies from contract to contract and period of contract. So that's the overall scenario. Somewhere you get maybe a dollar margin or somewhere you get 20 cent margin or somewhere you get 10 cent margin. That varies from the time we market it, that varies to who we market it, and that varies also based on how much volume we market it. So largely you can consider that out of total volume we have marketed largely on back-to-back basis, except 0.8 or 0.9.

Got it sir, got it sir.

And so, over and above this, you know, largely the back-to-back contract, you also get margins on the APMM, the STPT, right? Definitely, I think it's capped according to the government of 200 rupees per thousand STM, something like that. So, this was regarding the RLNG part, but not about the domestic front. In domestic front, you also get some, you know, marketing margins on, you know, getting contract through APM or STPT. Am I understanding it correct? But there is a margin which has been kept by government and about 200 rupees per 1000 SCM. Is it something like that? Domestic gas also has two parts. One is APM gas where the margin is 200 rupees per 1000 SCM. Another is MDP gas where marketing margin is around the line of RNG.

Got it, sir. Okay, sir. That's all from my end. Thanks a lot for answering this question.

Thank you, sir. The next question is from the line of Nitin Tiwari from Philip Capital India Limited. Please go ahead.

Hi, sir. Good morning. Thanks for the opportunity. So my question is also on the gas marketing business.

So can you also help us with the guidance for volume for gas marketing in FY27? I suppose the contract with Vittal is supposed to start in FY27, right?

It has started in 26. It has started. So what is the volume guidance for marketing sir? Sorry? So volume guidance we expect actually 5% increase. We have been maintaining that by to 6% increase in the volume. So if we end up this year 104, 105 because year is to be end. So maybe 109, 110 mm CMD on normative basis we should achieve.

So my question is then, I mean, incremental question is linked to that only.

So if we are targeting higher volume in F27, so are we expecting a contraction in margin, especially in the background of what you only earlier commented that now contracts are turning out to be more favorable than HH. So are we expecting any challenges with respect to marketing of HH contracts?

So that's why we are...

I have not revised my marketing guidance. I have maintained the 4000 code in spite of increasing volume of 5mm CMD.

Yeah, so your volume is going up, but your PBT guidance remains the same, which tells me that we are expecting a margin contraction. Is that the right assessment? No, no.

yeah yeah not we are not accepting but i cannot give you my guidance which actually may face some challenges like this year in the beginning and we say that situation will happen right this is still we are maintaining the guidance we have given in earlier in the beginning of the year that is 4000 crore So I whenever we give guidance then we should give guidance which is in even conservative or difficult scenario you are able to achieve right. So if we expect more we expect more but let that to come actually. We want to give you something which is certain in today's assumptions.

Understood sir. And sir my second question was with respect to the petrochemical business. Thanks for helping us with the gas cost.

I just wanted to understand the operating cost. If you can give us any ballpark number around what could be an operating cost, operating gas cost excluding depreciation on a part and basis that we can, like, you know, I mean, to help us understand that, like, you know, how that number is moving. particularly in the process plant particularly in the petrochemicals we have around 70 to 75 percent of the gas cost or this is the other cost which includes repairs and maintenance implied cost and it goes in spheres and other costs so you can consider this one so the 75 percent number that you are saying would change when the gas cost changes right so i just wanted to understand a ballpark for say operating cost for done that we can let you know consider for our understanding total cost you can calculate whatever we have published figure for the petrochemical segments so we are reporting uh separate separately for the petrochemicals there will be another segment so you can calculate easily from the published figure okay thank you thank you sir

The next question is from the line of Vineet from Nomura. Please go ahead.

Hi, sir. Thanks for the opportunity.

One question on the PEDCAM side. So I think ONGC has already announced charter contract for a couple of ATN carriers and they also have an agreement with Pertunit LNG for ATN handling. so and given that the cutter gas will not be rich gas from 2020 onwards so what is your plan in terms of sourcing gas for your ethane crackers and and where do you want to i mean will you be using the better the hedge uh terminal for uh handling ethane or will be adding this capability in your double terminal actually this question i have clarified in detail That first, we are working on ethane sourcing. We are already in the midst of laying a line from Vijayapur to Patta, which can carry ethane. We are also evaluating putting up a pipeline upstream to Vijayapur. And for that, we have three terminals, at least in West Coast, in our mind. That is Khajira, Nahez and Abol. Abol being our own terminal. subject to viability, we will prefer to bring it in at our own terminal. Okay sir, and given the current margins for Petchem and the margins in next quarter will be probably worse than what you reported in the third quarter because of higher, heavier prices, so is it not better to just stop operating the cracker probably in the fourth quarter because you are making losses even at the data level? actually we could have done it but mind it there are two consequences of stopping the plant for a very small period because anyway we are expecting next year onwards the prices are going to be softened and there we have we have those offers available for if we stop the plant for a period of say one or two months it actually it hurts two ways one the energy efficiency or the minimum energy required to maintain the plant in and preservative conditions that we have to incur. Secondly, customer sentiment. You see, a lot of customers have signed the contract or MOUs with us. If we stop the plant in between, we will lose these customers and they will go to our competitors. So we cannot, you know, fly by night the player like, now we are losing, we stop it, now we are earning, we start it. So on a longer term basis, we do not believe that this plant is going to incur losses. Last year, we were at a break-even level. This year... unfortunately to reversing Apple prices went down and the input has gone up. Next year we are not expecting such situation to be repeated. Okay, sir. So last question on the housekeeping question. So your staff cost is down significantly.

I think it's lowest in many, many years. So what was causing this very low staff cost in third quarter?

yes sir basically during the last year we provided PRP at the 100% basically during the current year no incremental leisure for the current year so we have reduced our PRP provision and there is no impact of labor code in this number right no no right now no ok sir thank you so much thank you sir

Ladies and gentlemen, in order to ensure that the management is able to address questions from all the participants in the conference call, please limit your question to one per participant. The next question is from the line of Mayank Maheshwari from Morgan Stanley. Please go ahead.

Sir, thank you for doing the call. Just a question around CAPEX now. Considering your petrochemical projects are getting completed this year, And if you can give us a timeline of when they kind of start up on each of them. How much are you thinking about CAPEX for fiscal 27? Thank you.

So we expect to have, subject to addition of new projects, which I am not factoring in, we expect to incur 9 to 10,000 crore rupees of CAPEX in financial year 27. We have 2-3 pipelines which are under construction. Those CAPEX will come up like Vijayapur-Aurya C2C3 pipeline, Gurdaspur-Jammu pipeline, completion of KKMB-PL and Jagdishpur-Haldia pipeline and the spur lines of SAPL. uh we have also uh we have also approved in board the doubling the capacity of our jamnagar lani pipeline until now this segment appears to be very small segment but by doubling it will appear to be very lucrative segment so that will also involve a capex of 5400 crore rupees So large part of CapEx will be on pipeline in 27 and even in 28. And then we also have net zero plan. 35,000 crore rupees we have planned to incur in a period of 10 years. And we are evaluating various projects like I narrated during the opening remarks that almost 700 plus megawatt of renewable energy projects we have in hand. We are working on it. And we are doing it on pure commercial analysis basis to replace our internal usage of power which we are purchasing. So around 2 to 3,000 crore rupees of capex will come from that side and then maybe remaining capex which project we are completing during this year will be there from petrochemical and GNPL. and then equity and contribute uh cgd projects which we are doing lng projects which we are doing cbd projects which we are doing may involve 800 to thousand co-groupies of capex this is how we reach to nine to ten thousand co-groupies of capex including equity got it so very clear the timeline on the completion of the petrochemical plans this year like when are you thinking which starts up pta mangler uh pp pdh like when do they start up now from your timeline perspective PTA will start during this financial year. We are very hopeful that it will be commissioned during this financial year. PP, which we are putting at PATA, 60 KTA, will be commissioned in a day or two. PDHPP, HUSAR, we expect to complete during this calendar year. That is delayed. Delayed as planned, we could not complete. But by calendar year end, we expect it to complete.

Got it, sir. Thank you.

Thank you, sir. The next question is from the line of Saurabh from Citigroup. Please go ahead.

Yeah, thank you for the opportunity. Sir, you had mentioned that for the tariff-like benefit, which is 12%, the earnings benefit you're looking at is around 1,200 crores.

Now, this is what you had announced when the – this was before the zonal tariff apportionment. Now, based on the zonal tariffs, it looks like the benefit could be slightly higher than that. So are you still maintaining a 12% number or could you just quantify in terms of realized benefit?

Actually, we maintain 12% because this zonal distribution is subject to our risk and reward. It may be 14, it may be 11. So we maintain an average number of 12.

sure sir and uh just uh last question uh um on um capex with all your pipelines likely to get commissioned over the next uh two tools i think between march and june uh how much should we look at in terms of uh what you will be capitalizing and the implications for depreciation that's sold on in the current quarter i will capitalize around 5200 goals so only balance portion of

a spur line around 300 km and some portion of Jagdishpur-Haldia, from Calcutta to Haldia and Dhamra to Haldia, this will be catalyzed by June, and some portion of Mumbai-Nagpur-Jasugora, mainly Nagpur to Jawalpur, and in Maharashtra region. So this pipeline will be catalyzed. And by June 26, the Gurdaspur-Jammu pipeline will also capitalize. So the capex is around 500 crores. So these are the capex which we will capitalize during the coming years. Sir, and how much would this amount be if you just exclude the Gurdaspur-Jammu pipeline? Is that another 4,000 to 5,000 crores of capitalization? Around 2,500 to 3,000 crores.

Okay, got it. Thank you so much.

Thank you, sir. The next question is from the line of Vikas Jain from CLSA.