GAIL (India) Limited

Ladies and gentlemen, good day and welcome to Gale India Limited Q1FY27 Earnings Conference Call hosted by Ambit Capital Pvt. Ltd. As a reminder, all participant lines will be the listen only mode and there will be an opportunity for you to ask questions after the presentation concludes. Should you need assistance during this conference call, please signal an operator by pressing star then Piro on your touch-tone phone. Please note that this conference is being recorded. I now hand the conference over to Mr. Vivekanand S. from Ambit Capital Private Limited. Thank you and over to you, sir.

Thank you, Palak. Good day, ladies and gentlemen. On behalf of Ambit Capital Private Limited, I welcome everyone to Gale India Limited's First quarter fiscal 27 earnings call. Today we have the pleasure of having with us the senior management of GAIL led by its director of finance Sri S. K. Sinha ji. I will now hand over the call to the management for their opening remarks which will be followed by Q&A session. Over to you Sinha ji.

Okay, thank you Vivekanand. I extend a warm welcome to all of you and thank you for joining us today. I also take this opportunity to thank our investors and analysts for their continued trust and engagement with the company. For the financial year 26-27 began amid sharp volatility triggered by the West Asia crisis which impacted certain gale volumes. The company managed the disruption through a combination of portfolio flexibility and export sourcing while continue to support customer requirements and India energy security. Gale diversify portfolio proved to be a key strength in navigating the quarter effectively. During the quarter, the energy sector faced significant challenges arising from the geopolitical developments and supply disruptions. Before I move onto the operational and financial highlights, I would like to place or record my sincere appreciation for the entire Gale team. Our teams worked relentlessly to ensure continuity of the gas supplies and meet customer requirements. Their dedication, resilience, and customer centric approach enable Gale to navigate the disruptions effectively while supporting India's energy security, which is reflected in the quarter's strong performance. In summary, Q1F by 27 demonstrated the resilience of the GIL integrative business model with strong financial performance supported by portfolio diversification, discipline supply, management, and continued investor strategic growth projects. molding the key business highlights for the quarter. During the quarter, the entire 1,707-kilometer Mumbai-Nagpur-Jasovara pipeline become operational on 31st May 26th, making a significant milestone in strengthening Gill's gas transmission infrastructure. Pursuant to the NC-LT order, dated 3rd June 26th, Konkan LNG Limited become a only one subsidiary of GAIL India Limited with effect from 6th July 26th. This will help GAIL streamline operational more effectively, bring tax efficiency and make RLNG sourcing more competitive. PNG-RB also authorized for the three LPG pipelines namely Jhansi, Sitargan, moving to the performance highlights first we discussed about the standalone probability Gross turnover for Q4 FY27 stood at Rs 38,912 crores and engaged Rs 34,591 crores in Q4 FY26, reflecting growth of around 12%. Supported by elevated crude and LPG prices and well-diversified portfolio, the company delivered a robust financial performance during the quarter. PBT stood at the 5,773 crores as against 1,577 crores in Q4 F by 26. FAT stood at Rs. 4,292 crores as against 1,262 crores in Q4 F by 26. moving to the calculated financials on calculated basis for Q1 FY27 turnover stood at 41,277 crores compared to the 35,499 crores in Q4 FY26 Evita was 7,573 crores versus 2,703 crores in the previous quarter. PVT stood at 6,268 crores as compared to 1,966 crores in Q4 FY26. PACT excluding minority interest stood at 4,665 crores as against 1,485 crores in Q4 FY26. Moving to the segmental performance and outlooks. First we discuss about the gas marketing due to the force major declared by PLN. Volumes from the Qatar were impacted additionally from seven cargo from other contracts were also affected during the quarter. To meet the demand gas, Gale sourced eight spot cargo during Q1 FY27. Our gas marketing volume stood at 93.82 MMSCMD comprising 8.76 MMSCMD in the international market. Favorable movement in price indexes supported the elevated marketing market spread during the quarter. Higher returns were generated from the Henry Hub link and JCC 9 month link sourcing where the corresponding sales were not indexed on the same basis. this advantage expected to be largely short term as the 9 month and the 3 month JCC averages are expected to converge over the time and the benefit from the index movement is likely to normalize. In view of the continued volatility, we maintain our gas marketing guidance for FY26-27 at around 4500 crores PVT. We will further review and revise the guidance if required after declaration of the results for the subsequent quarter. Moving to the natural gas transmission, natural gas transmission volume for the quarter FY27. stood at 122.36 MMSCMD as against 118.99 MMSCMD in the previous quarter. The Q1 FY27 transmission volume is broadly in line with the FY26, 25, 26 with the increase primarily on account of seaport volume which rose by around 4 MMSCMD during the quarter. Based on the current operating trend and the Q1 FY27 volume of 122.36 mmHgMd, we now expect network at transmission volume for Fx27 to be around 123 mmHgMd with the assumption that the geopolitical situation continue. We will continue to monitor the evolving geopolitical situation and domestic demand and we update the guidance if material change is warranted. under the polymer business due to the diversification of pre-retrox natural gas towards the priority sector in line with the government's Gajet notification declaring natural gas as essential commodity polymer production during Q1 FY27 stood at 51 TMT. The segment incurred a loss of Rs. 130 crores for the Pata. At present, the plant is running at 100% capacity and we expect it is to be at the break-even level during 8 by 27. We are actively pursuing the shift of Pata petrochemical complex from natural gas to ethane as a free desktop to ensure long-term sustainable margins. Movinging to the LSP and LPG Transmission in the LPG Transmission Segment Volume stood at 1077 TMT as against 1114 TMT in Q4 FY26 down by around 3% primarily due to disruption in the LPG import on account of the West India crisis In the LSE segment, the company increased production by around 20% during the quarter from 194 TMT to 232 TMT supported by additional allocation of domestic new well gas of approximately 0.597 mmCMD. Production is likely to remain in the range of throughput during the last year. the LSE segment reported PVT of Rs. 772 crores during the Q1F by 27 as against Rs. 144 crores in the previous quarter and Rs. 489 crores in the previous financial year added by higher FPG prices due to the best ACR disturbance. Moving to the CGD and Gale gas performance Gales CGD network across 6 GAs comprises 217 CMG stations and 2.63 lakhs DPNG connection. During Q1 FY27, Gale's CGD business added about 20,069 DPNG connection and 3 CNGA stations. Gale Gas Limited which is wholly owned subsidiary of Gale currently operates 16 GAs directly and 9 GAs through its JB. During Q1 FY27, Gale Gas added about 16,610 DPNG connections as on 30th June 26th Gale Gas held a network of 592 CNG stations and 7,93,684 DPNG connections Over the next 2 years Gale Gas target to add around 275 new CNG stations and about 3.7 lakh new DPNG connections During the current quarter FY27 turnover of Gail Gap stood at Rs 3,326 crores as against Rs 3,227 crores in Q4 FY26 PVT increased by 3% and stood at Rs 162 crores as against Rs 158 crores in Q4 FY26 was up by 3% and stood at Rs. 120 crores as against Rs. 117 crores in Q4A by 26. Moving to the ongoing projects and capped pipeline projects, J-BDPL remaining section, KKMDPL phase 2, Gurudarpur-Jammu pipeline and C2-C3 pipeline are scheduled for completion in the current financial year. pipeline, DPPL capacity augmentation are scheduled for completion in FY27-28. JNPL capacity augmentation is scheduled to be completed in July 28. Petrochemical projects, the 1250 KTA PTA plant at DNPL is in advance stage of commissioning and should start production shortly. The 500 KTA PDSQ plant is scheduled to be commissioned in the next financial year. And moving to other CAPEX plant during the Q1 FY27, GAIL incurred a capital outlay of 6,176 crores demonstrating a strong progress across a strategic growth initiative. This sustained investment underscores our commitment to a strengthened gas infrastructure enhancing downstream capabilities, advancing clean energy projects, and supporting India's long-term energy transition and energy security objectives. We remain on track to achieve our FY27 capacity capital outlay guidance of around 11,500 crores. That concludes my overview of the quarter's performance, segment-wide outlook, and key projects. Over to you, Mr. Vivekanand.

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'll wait for a moment while the question queue assembles. The first question is from the line of Vivekanand S. from Ambit Capital Private Limited. Please go ahead.

Hi, Mr. Sinha. Thanks for updating your guidance on transmission as well as marketing and FedChem. Just drilling deeper into the drivers of the transmission volume growth, If you can help us understand, you had a volume of 127 MMHCMD in FY25. Now, clearly FY26, 27 were down years for very specific reasons. But how to think about the demand outlook beyond FY27, considering that the government is taking multiple steps to de-risk the country from the overexposure to LPG in certain sectors. Is there any change in demand outlook that you have experienced as far as the government's push is concerned? That is my first question. The second one is on the gas sourcing side. So some of your new contracts, particularly VTOL and ADDOC volumes, they will kick in now, right, this year. So just trying to understand in terms of your long-term portfolio, What are the incremental deals that you are planning to sign? What would be the duration, benchmarks? If you could talk about that, it will be great. Thank you.

Okay. Thank you, Mr. De Rutanam. Coming to the first question for the demand, as you know, P&J RV has come up with a document, a paper where it has mentioned that by 2030, the total demand will be 297 MMSCMD. currently 200 mmHgMd. So there will be increase of about 100 mmHgMd and 100 mmHgMd will come from first from the TGD sector, second from the fertilizer sector, third one was the power sector, fourth one the industries which includes steel, aluminium etc. and last one is the LNG long long haul LNG truck so these are the area where demand will come in the future and moving to the second question regarding the sourcing so right now we have 16.5 mm CTA in our portfolio and Earlier our chairman had already told that we will source around 7 to 8 mm TPA by 2030. Out of which we have sourced around 2.5. So, we are working on it.

Right. Thanks for the color. Just to help us understand the, let's say, the roadmap because the 2030 outlook, now we are not very far off. I mean, less than three and a half years. So, to understand how much of the 100 MMSCMD incremental demand will come from the various sectors. Do you have any more working that you have done? Because I understand that the P&GRB had done this at a time when the market was very normal. There was an LNG glut expected globally. But the devastation war is likely to have changed many things here. So, in your view, what do you think is the now perhaps updated demand projection that you are working with and you believe is plausible in, let us say, FY28 and FY29?

Basically, based on the current situation, we have not revised our volume, so we are totally relying on P&G RV public figure. So, certainly there will increase I have already told about the CGG sectors where the growth is around 10 to 12 percent. So, currently it is around 45-46 mmlcmd and by 2030 as per the PNJRB it will increase to 80-85 mmlcmd. And second one in the fertilizer sectors there will be around 10 to 12 mmlcmd growth will come by 2030. Third one is the power sectors currently we are consuming the power sectors around 25-26 it will increase to 35 MMCMD and in the other segments I have already told you the long term all steel and cement the growth will be happen in these sectors.

Thank you very much sir. Palak you may open the Q&A queue now. Thank you.

Thank you sir. Ladies and gentlemen in order to ensure that management is able to address questions from all the participants in the conference call, please limit your question to two per participant. For follow-up, please rejoin the queue. The next question is from the line of from ICICI Securities Limited. Please proceed.

Thank you so much. Congratulations on a strong set of numbers in a challenging environment. I just had a couple of questions. Number one, obviously, trading has surprised positively. in terms of the margin performance and yet if we look at the guidance of 4500 crore what we are implying therefore is that there is a very steep decline in terms of the quarterly run date if we look at what we have already achieved in Q1. So, how should we look at it sir? Is it just excessive rulings at this point of time and there is almost a decent probability of further upward guidance or you know is there a huge normalization that can happen when the JCC three-month linkage actually kicks in and encourages to the nine-month number. Just if we can understand a little bit more.

See, Prabhu, I think you have rightly pointed out this. We have been telling this in earlier quarterly calls also that JCC index contracts which is for 2.8 mm TPA, 2.4 mm TPA, It is on 9 months rent. It is on Japanese food cocktail but roughly it is same as it went but it is covering 9 months average and that too with a lag of 2 months. And whereas all the downstream sales are on 3 months dated rent. So there has been earlier years also cash flow differences have been there which are getting normalized over a longer period of time. So what we believe that this time in this quarter there was abnormal jump in the rent index numbers which contributed to very high realization in terms of sales and we that has contributed significantly but this is one of definitely much of it will get cured within the year that's what we understand however it depends on the level of dated rent in the coming months which is depending on so many international factors.

Gaurav sir sorry to harp on this again but another significant part of our trading portfolio is the 21 MMS Indy or 5.8 million ton of energy update gas there so that's very clear that can we have prices on are continuing to hear the discount to Asian energy prices so that advantage will still sustain there is nothing specifically one-off about that phenomenon. I mean, obviously, the definition may narrow a bit, but is it fair to assume that that advantage will continue to sustain for us for even the rest of the year?

Again, that depends on the levels of rent index and the NRIP index in the remaining months. Of course, we are continuously striving to hedge certain volumes of the exposure which we are having on the first index. As far as HenryUp is concerned roughly half or slightly less than half goes on back to back index and another may be 20% goes for our own consumption in Pasa. So the cross index whatever is available is not a very high number. Yes definitely that is in a sweet spot right now. So that contributes positively to our top line and bottom line.

Got it, sir. The second question was about the NPG business where you mentioned the additional allocation of 0.6 LMHC ND. So, in terms of production run rate, should we assume that the production run rate that we have achieved in this quarter, that will, you know, safely be maintained for the rest of the year? And what was the average pricing that we saw for our realizations in this quarter? Good advice. Thank you.

Basically, during the last quarter, it was around 90,796.

And moving to the production side, basically we have allocated additional 0.597 MMS TMDs. So earlier we had allocation of about 1.32. So total our allocation is around 1.9. So based on the 1.9 we will able to produce what we produced in the last quarter.

Understood sir. I will come back for more questions. Thank you so much and all the best.

Thank you sir. The next question is from the line of Yogesh Patil from Dollard Capital. Please proceed with your question.

Thanks for an opportunity and congratulations for the great set of numbers, sir. A few questions on the petrochemical Pata facility. What was our average gas cost for the petrochemical during the quarter? And what gas price do we expect petrochemical operating profit will come into the positive side?

During the last quarter, the average price of petrochemicals, landed price was $10.54 per mmBtu.

And sir, any guidance that at what price we will be profitable on the petrochemical side? At what gap cost?

If around $13-$14 landed price and selling price is around $1,30,000, there will be no profit and loss.

Sir, next related to USAR and the GMPL again. as you mentioned the USAR is going to start the next year and GMPL very soon but could you approximate timelines when these projects will be a fully commissioned that's one and secondly when it starts contributing to the EBITDA on a separate side will it be a second half of FY28 or to give us I mean will you give us a guidance on the FR29 side full profitability will reflect in FR29?

Basically we have not bugged out profit for the FY27-28 for the GNPL and 3D SPV but certainly our GNPL plant is under commissioning and production will start very soon. and regarding the PDFP plant this plant as per the timeline it should be commissioned by June 27th but it will take another 6 to 7 months and it may be completed by December 27th.

So last question on the PNGRB action plan 2027. So sir they have mentioned promotion of transfer and the competition in the gas infrastructure. under this paragraph PNJRB has mentioned that unbundling functions and creation of independent transport system operators what we understand recently the gas station has cancelled the unbundling of the gale transmission in the trading segment can you just give us little bit clarity on this topic basically in the year 2014 PNJRB came up with the

for the unveiling of GAIL. Unveiling means any entity which are in the transmission and marketing business has to separated with effects from 1st April 27th. So for this we went in the court and the case is still pending and recently PNJRV has withdrawn the Cloud 5A from their regulation. So, right now there is no obligation for unmanageable for the entities. They engage in the gas consumption and gas marketing.

Okay. So, then what will be the role of TSO system operator, independent TSO?

TSO will examine the third party. Basically, in any pipeline we have 25% for the third party so open access. So they will monitor the open access quantity.

Thanks a lot sir and all the best. Thank you.

Thank you sir. The next question is from the line of Siddharth Chauhan from 361 Capital. Please proceed.

Hi, thank you for the opportunity. I have two questions. Firstly, in the gas transmission business, For system use gas, do we get HPHT gas or we have to rely on spot energy? That's my first question.

Yeah, basically we are using HPHT gas. So, we had already purchased HPHT gas in the past. So, we are using same gas.

Currently, we are using HPHT that was earlier awarded to buildings where it is available. Going forward, the PNJRB has come out with a regulation where Understood and any thoughts on that? Have we planned our sourcing for the next three years?

Understood. And lastly on Dhabol LNG plant, when will the heating system be installed? And secondly, will it be fair to assume that all the incremental deals on sourcing side will be brought to Dhabol LNG for regasification?

The heating system will be completed by next year by June 27.

Okay.

And what is your next motion?

and the next question was that will it be fair to assume that the incremental deals on the sourcing side all the volumes will be brought to Dhabol LNG for recalcification so as you mentioned 7 to 8 mm TPA you are targeting by 2030 and you have already sourced 2.5 generally all the deals are having West India optionality available with them where we can

change the port or defuse the port so definitely we will end away once the terminal is fully ready to use as much as available slots as possible Thank you sir and all the best for the future Thank you sir The next question is from the line of Amit Murarka from Access Capital Please proceed Good evening for the opportunity

I believe a lot of it is back-to-back contracted. I just wanted to understand what percentage of it is still open and how much is in a contract terms now.

I think this has been answered a few minutes back in another question. As I said, we had a portfolio, we have a roughly portfolio of 21 mm STMD on NREA and out of which around half or slightly less than half is contracted back to back.

Another 20% goes for our own internal consumption in petrochemical complex.

Remaining maybe 25 to 30% is available for sale in Brent contracts. and we are time to time hedging and locking the margins for this cross-index basis.

And given the high differential right now between the two, between NG-hub linked and Brent linked, so is it fair to say that at least in second quarter or the near term, the margins that we capture from this open-ended volumes will still be quite high then?

Amit, the PATA plant was partly operational during quarter 1. It started in the mid of May. So, now only it was operating on 50% load. Now, PATA is fully operational on 100% load. So, the volume which is designated for PATA will be consumed in PATA. So, we will have less arbitrage available to play with HH.

But still, given that Petchem prices are also very high, so in that case, then the same margin will now get captured in Petchem to that extent.

Yeah, but we cannot be so sure of Petchem prices. It will anyway be determined by the market forces.

And price has already softened if you compare with the previous quarter.

Okay, sure. Okay, got it. That's it for me. Thank you.

Thank you, sir. The next question is from the line of Sumit Rora from SmartSun Capital. Please proceed. Mr. Sumit, your line has been unmuted. Please proceed with your question.

Yeah, thank you so much. Yeah, hi, sir. Thank you. Thanks a lot for the call and many congratulations on a great result. Now, sir, I just wanted to get your sense on this gas marketing. You said that, you know, 4500 crore is basically what you're targeting on a PBT level for the whole year. And you've done about 3600 crore in the first quarter. Now, I also understood you said that this is linked to Brent, the dated Brent. Now, assuming, sir, you know, Brent is averaging around, say, $90 or between $80 and $90, even in the second half, I mean, the second quarter. How do you basically think this gas marketing number should look? You know, because that's a very big moving part in the result, right? Because if you see on a total PDT of 6,500, that is 3,600. So if you can help understand on that, then, you know, they'll get a better sense on numbers on gas marketing. And so secondly, also on the LPG, you know, you've reported 772 crores versus 205 crores. Now, that is also quite a high number. So, do you also see this 700 crore plus number sustaining for the balance of the other quarter, sir?

Moving to second question regarding LPG, the price of LPG in the last quarter, it was around 90,796 and price has always softened in the current quarter. So, certainly there will be decrease in the LPG probability. And regarding input side, so we are using some portion of the APN gas, the price is around $7 and we are using some new well-filled gas. The gas price is around $12 to $13. So based on these situations, whatever we earn profit during the last quarter, certainly this So, if any change will happen in the coming days, so we will come up with the revised guidance.

Thank you so much, sir, for that. But, you know, just one thing. So, this 4500 crore has been a number, you know, which is long spoken of in the last 2-3 years. So, do you think that it's more or less going to remain around here or at some point, you know, you're going to see a very sharp acceleration in those numbers?

The situation is very volatile. Keep moving. It's changing every day. So, the results, extraordinary results that we got in quarter 1 is due to JCC and JCC 9 months and 3 months arbitrage that we got and over long run these averages are going to converge. So, second quarter the JCC 9 months average, it will reflect the current rent prices to some extent. So, the margins are going to shrink as we go forward. So the same kind of margins that we earned in quarter one may not be available in quarter two. And if Brent goes down significantly, we may lose on that number. Because the three months, Brent three months will start reflecting a lower number than our sourcing.

Okay, sure. Thank you, sir.

Thank you, sir. The next question is from the line of Sabri H. from MK Global. Please proceed with your question.

Good afternoon, sir. I have a few questions. First is on the transmission side. I think the expenditure on the transmission side is quite low if we adjust for the one which was done in Q4. So was there like anything specific during Q1?

in the in the in the last quarter there was provision 111 crore basically provision has reduced from 111 crore to 11 crore so the total cost has decreased mainly due to the provision okay but but there was nothing like no change in gas sourcing mix for the class no no no no no no one else right

Okay, okay, fair enough. And second question is on your fertilizer plans. So these are all assured projects, right, in terms of 12% to 15% IRR, which I think the government has also stated. So there will always be, like, profitable. Or is there some risk of, like, cost overshooting and you are not able to make that much money? Is there any risk or it's a fixed return business, the fertilizer capex?

of fertilizer has published the new Urea policy for the investment. So we are going for the two fertilizer plants, one is the Maharashtra and other one is the Chhattisgarh and all the plants are under active evaluation. Whenever we finalize our DFR and evasion decisions we will come inform you in subsequent.

Got it sir. Thank you so much and all the best.

Thank you sir. The next question is from the line of Mayank Maheshwari from Morgan Stanley. Please proceed with your question.

Sir I had a question around how you have used the shock of the last quarter to improve Mayank sir, can you please use your handset? Can you hear me now? Yeah, yeah. It's okay. Okay. Yeah. So, I was basically asking you in terms of your long-term market share on marketing on natural gas, how have you used the last quarter of shop considering you had a good portfolio of sourcing to increase your market share on more medium-term? Are you able to get more longer-term customers because of the shop and you are getting to kind of supply the gas during these times?

Mayank this Middle East war though it has given lot of lessons for the country but basically one lesson has come out very starkingly that our dependence the country's dependence on LPG is very much loaded on the Middle Eastern countries whereas natural gas portfolio for the country is much more diversified so for the energy security of the country it is very important and even in the longer run this message will continue that LPG has to be replaced in a very very projectized manner with natural gas whether it is for cooking, whether it is for industrial segments and whatever segments. So yes that has given a big boost and the government, the Ministry of Petroleum is also pushing very hard for more and more PNG connections for the homes and even in the industrial segment customers whether they are in the ambit of CGBs or large industrial customers otherwise on natural gas pipelines which used to earlier use LPG they are all now coming up for tying up natural gas for their energy requirement. It is a big boost for the natural gas in the longer term.

in terms of because you have been using market share on marketing side versus your transmission volumes if you look at the data has been rising over the years is that app that you can close over the next few years because of this or no?

Definitely it will help improve and one of the reasons for that whatever factor you are saying is the growth in the PGD sector where many of the PGDs sometimes they are sourcing on their own but As far as the pipeline transmission network, it is Gary being one of the biggest pipeline transmission network owners. Transmission volumes will continue to benefit.

From the volume growth in CCDs, we can understand that there has been substantial growth in industrial and commercial connections because those INC customers, they are avoiding LPG now. So, they are they are taking new connections. So, the coming quarters we will see that growth coming up.

I think it's the last question on pipeline. How much variance you think you can be going to this pipeline over the next couple of years and an impact on tariff overall? Currently, it is around 0.5 MMH DMD and this will increase further

actually we are discussing in the dhastu goa sites so there are a lot of industry in the dhastu goa so certainly they will consume gas in the coming days see one or two years is a very small period so many CGDs are there they will gradually ramp up but the most important thing is our two fertilizer plants which we are working on if they are approved they may take another 3-4 years that will be a big boost for Thank you.

Thank you, sir. The next question is from the line of Vinit Banka from Nomura. Please proceed with your question.

Hi, sir. Thanks for the opportunity. I have a couple of question firstly on the gas trading side was there any one off like in the last quarter there was a provision of 6.7 billion odd and I think you told that this could be reversed in the coming quarter so was it reversed in this quarter?

No these are not been reversed in the current quarter so one off in the current quarter yeah.

Yeah understood sir. So and secondly on the LPG LHC business I understand the volume currently the domestic gas volume that is around 1.9 LHC only so can you give a break up of how much of it is APM price how much is New Bell gas price?

1.12 is the APM gas and rest is the New Bell filled gas.

Okay, sir. And the handy of gas that you're sourcing from the US, you said around 20% goes to pet can plants. And if the same gas is sold on brand link pricing to some other customer, the margin will be much higher. So, it's time to understand, is it better or are you better off to probably use this gas to be sold to some other customer rather than using it as a pet can feedstock?

Basically, we are in the petrochemical since 1999, so we have a market, we have a customer, so we have to produce, we have to run our petrochemical plants at the certain level. So, we have a Henry of gas around 21 mm CMD and our ED marketing are already clarified in detail. So, how much we are selling on the back to back basis, how much we are selling on cross index and whatever, how much we are consuming in the our report internal consumption.

Okay, so one last question on LPG realization. So usually when I compare this realization with Saudi contract price, it is largely in line, but this quarter there was a large divergence. Is it because of there is much higher spot premium over Saudi contract price because of what was happening in the Middle East and also due to additional higher logistic cost or anything else which could explain this price difference?

Okay sir. Thank you. Thank you sir. The next question is on the line of from

advance park. Please go ahead. Mr. Somao, please proceed with your question. As the line for the current participant is not active, we'll proceed with the next question. The next question is from the line of Nitin Tiwari from Philips Capital. Please proceed with your question.

Hi sir good evening and congratulations on very strong set of numbers. Thanks for the opportunity. A couple of questions from my side. We have number of projects which are commissioning over this year and next year as well. So how do we look at depreciation and interest and if you can give us some guidance on the run rate for depreciation interest going forward on either annual or quarterly basis.

which basically in the previous quarter we have already reviewed our life of the pipelines and the petrochemicals. So, based on the current type of 40 years and 35 years of all the petrochemicals, the depreciation will be around 3200-3300 crores in the coming year.

Okay, even after the commissioning of new pipelines, I mean that is what you And also, I mean, we have petrochemical project commissioning as well in next year.

Yeah, GMPL will be commissioned very soon. And PDSTP plant will be commissioned in the next year.

Right, sir. So, I mean, if we include all of that, then how will this 3200 crore number move? Any sense on that?

Basically, the depreciation rate for the, yeah, is around 4%, so you can calculate total cost is around 11,256 crores. So, around 440 crores. Additional impact will be 312 crores.

Okay.

312 crores, sir. Got it.

And on the interest side? Currently, the interest

Total finance cost for the current quarter was around 310 crores. So, you can calculate for the yearly basis, it will be around 1,200-1,300 crores.

Understood. Because of the plant timing.

Yeah, tell me, yeah.

Yeah, I was saying that currently you would be capitalizing the interest on the debt on the plant, right? So, that will get expensed later when the plant is commissioned. So, yeah, how would the interest generate look?

Basically, total plant cost is around 11,000 crores and based on the 60-40 something total loan of the PDH is around 6,000 crores. So, 6,000 into 7, 440 crores.

Sir, and second question was on marketing margin. So, you did explain the gap between 9 months and 3 months JCC contracts which led to the widening of margin. So, but you would have sold out of spot cargoes in this quarter as well to make up for So, how was the marketing margin on those cargos if you can give us some sense either in percentage of the price terms or in dollar per annum duty?

See, during these war times, we have been managing trying to manage the volumes to our customers also. So, we have purchased lot of spot cargos during the summer period which shows that market price. So, Ultimately we have used the mix of both strategies to keep the customers supplied and also trying to protect the margins. One more factor which was playing out in this quarter was though the prices were high the power sector the peak in power certainly during the summer months and during the evening hours that consumption was substantial and sometimes the summers are mild but this year the monsoon has been deficient so Even though the pot prices were high, the power plants did consume lot of pot gas.

Sir, would it be fair to assume that you were able to make reasonable margins on the spot cargoes as well?

Yeah, that's right.

Yeah. And last question, I mean, just a clarificatory one. So, GCC sourcing is 9 months with a 2-month lag. the I mean how is the supply contact does it also have a lag or how does it work I mean suppose if a consumer is buying in August so what is the three month rent that we will have to look at understanding the price that will be immediately three preceding months sir whereas the putting side is nine months with a lag of two months got it sir thank you so much sir that answers all my questions I will get back and listen sir thank you sir

The next question is from the line of Vikas Jain from CLSD. Please proceed with your question. Mr. Vikas, your line has been unmuted. Please proceed with your question.

Hi, sir. Thanks for taking my questions. Firstly, on gas transmission, because of the thing that you just mentioned of power having sudden demand during the seasonal demand would jump at power so is it fair to assume that current gas transmission volumes will obviously be not that high that we saw in the last quarter and it's come off so I have already told you that during the current year you can assume around 123 mmHg okay so yeah I understand that but does that include some kind of normalization due to you know that the hormone supply etc gets normalized or and you know that demand might also be very price sensitive part so as like if there is a sudden spike or collapse in LNG price all of that can be more sensitive right so that's what I wanted to understand that as supply you know as that summer season related supply has gone Has that led to some kind of a cool-off in demand?

No, no, no. Basically, in the summer season, and particularly in the month of August or September, power setters consume gas. And similarly, in the month of December, January, power setters consume gas. So, based on all the factors, we have calculated the total figure of around 123 mmCMD. Okay.

Okay, and would this figure change materially? Say there is a, for some reason, maybe due to European feeling of, you know, LNG, if there is a spike by, say, a significant spike by $3-$4, would that demand figure change materially? Or do you think that this is not that price-sensitive?

Chief, change it up. happened materially in the coming year suddenly we will come and inform you in the subsequent quarter. So right now we don't foresee for any material change. So based on the current situation and we expect in the coming situation. So based on the total the gas transition volume will be around 123 mm C. Okay.

Okay. Okay. And just one more thing. Basically LPG Gas trading, you just explained that obviously there will be a period of catch-up because a lot of gains have been booked due to the benefits of the lag in this particular quarter. Similarly, for pet chem and LPG, LPG production, can I argue that, like you said, that because prices have cooled off from those very high levels, that profitability in the current quarter would not be as good as the profitability in the in the first quarter is that a fair way of looking at things?

Basically during the last quarter the price of petrochemicals was around 1 lakh just hold on 1 lakh 46,000 per metric tons as compared to the 98 per metric ton quarter 4 and similarly in the LPG the price relation of the LPG is around 90,796 as compared to 54. So there was increase of around 36,000 per metric ton. The main reason for increase in the property of the LSD mainly the price increase in the price. Plus production we have increased by 20%.

but since those prices are now have cooled off so profitability for both of these segments will also be you know not that high in the coming year will get impacted in the coming quarter so profitability of gas trading as well as pet chem as well as LPG production will all three of them will see some kind of a decline from where things are in the first quarter right it is right I am saying Okay. Yeah, that's all my questions. Thank you so much. Thank you, sir.

The next question is from the line of Vivekanand S. from Ambit Capital. Please proceed with your question.

Sure. Thanks for the follow-up opportunity. So my question is a bit broader on how the government is thinking about the the policy framework post this crisis. So before the crisis, the government was promoting the sector a lot and also coming up with frameworks that could make it very easy for you to execute projects. Now we see that there is an increased push towards DPNG as a segment. Are there any other major changes that you see From the government side that make you believe that the PNJRB vision 2030 of gas consumption increasing to close to 300 mmHg CMD could become a reality. Are there any policy actions which perhaps we would have missed which are happening behind the scenes that are likely to be a tailwind for the sector? Thank you.

The government is also pushing on gas storage as a strategic energy security measure. Of course, it may not, it has been thought very seriously, but it may not give the impact so fast. But definitely, the intent is very much there and the seriousness is there. And also then, oil acidification projects are being promoted by the government. There are policies which are incentivizing those kind of projects. So all these are the measures which the government is taking for increasing this gas usage and then of course compressed biogas was always on the front radar of the government and probably some even better schemes are likely to come in near future but we have to wait for the schemes to get published.

Sure, okay. Just as a follow-up, is the government pushing you to take up more long-term gas sourcing or say look at alternate feedstock like ethane and also perhaps explore sourcing more from the U.S. because India has a trade negotiation with the U.S. where the government has committed to buying a significant amount of energy from the U.S. in the years to come?

So as here we are always on the lookout for sourcing from all parts of the world and wherever we get a better deal we will go by it and we as already told by Dexa Finance earlier we have the sourcing roadmap for upto 2030 upto 7 MNPC of which two and a half we have already done. We will continue to scout all the indices and all the geographies.

Thank you very much for your time. And now I would hand the conference back to you for closing comments. Sinha ji, if you would like to say something in closing, that would be great.

Thank you. Thank you, Vivekanand. I have tried to get all your questions. And if you have any questions, please inform to our IR field. So, Anjana may be looking after IR activity. So, please email to Anjana. Thank you. Thank you so much.

Thank you, sir. On behalf of Ambit Capital Private Limited, that concludes this conference call. Thank you for joining us and you may now disconnect your line. Thank you.