GAIL (India) Limited (GAIL.NS) Q1 FY2026 Earnings Call Transcript & Summary

Hi. Good morning, everyone. Welcome to Q1 FY '26 Earnings Call of GAIL India Limited hosted by Macquarie. From the management team, we have Mr. Rakesh Kumar Jain, Director of Finance, and other senior executives. So without any further delay, I would like to invite Mr. RK Jain for his opening remarks, which will be followed by a Q&A session. Over to you, sir.

Thank you, Mr. Joshi, from Macquarie Capital. Dear friends, from investors and analysts community and my colleagues present here, a very good morning and warm welcome to GAIL's earnings call for Q1 financial year '26. At the outset, I seek my apologies for being 8 to 9 minutes late because of unavoidable circumstance. There was a heavy rain in morning and a lot of waterlogging. So my apologies for that. I take pleasure to inform that the Durgapur-Kolkata section of Jagdishpur-Haldia-Bokaro-Dhamra Pipeline has been completed and dedicated to the nation by our Honorable Prime Minister on July 18, 2025. With the commissioning of this pipeline, now Bengal Gas will be connected to natural gas pipeline, and they need not take the molecule through Cascade and HPCS 3GA will also get connected. And there is a potential of 0.4 MMSCMD for these CGDs on immediate basis once they start taking. One another development on July 23, 2025, GAIL has got PNGRB's authorization for capacity expansion of GAIL's Jamnagar-Loni LPG pipeline. The current capacity, as you know, is 3.25 MMTPA. With the authorization of expansion, this capacity will increase to 6.5 MMTPA. This pipeline will involve a CapEx of INR 5,000 crores, and it is -- on this project and the authorization -- as per authorization, we have to complete this project within 3 years. GAIL's results for quarter ended June 30, 2025, have been declared yesterday, and you must have gone through those results. And now I would briefly touch upon the major highlights for this quarter, post which we may open the session for queries. GAIL's gross turnover stood at INR 34,735 crores in Q1 financial year '26 as against INR 35,602 crores in quarter 4 financial year '25, you can say which is almost at the same level. Profit before tax stood at INR 2,533 crores as against INR 2,701 crores in Q4 financial year '25. This is down by 6%. And you know, mainly we received dividend incomes in -- we do not receive dividend income in Q1, and that was around INR 239 crores in Q4, which is not available. So this may be one of the major reason for this deficit. For the PBT for Q1 financial year '26 also includes one-off item that is INR 133 crores on account of differential settlement of unified tariff. This pertains to previous period. So that's why it is one-off item. The profit after tax for the quarter decreased to INR 1,886 crores as against INR 2,049 crores in Q4 financial year '25, and this is down by 8% and the reasons are same. When we compare with the corresponding quarter for last financial year, that is Q1 financial year '25 as compared to Q1 financial year '26. GAIL achieved turnover of INR 34,735 crores as against INR 33,623 crores, an increase of 3% in PBT. PBT stood at INR 2,533 crores as against INR 3,642 crores and profit after tax stood at this quarter INR 1,886 crores as against INR 2,724 crores in corresponding quarter last year. Now I will touch upon the physical performance of the company during the quarter as compared to previous quarter. Gas marketing volume during the quarter stood at 105.45 MMSCMD as against 106.53 MMSCMD in Q4 financial year '25, almost 1 million difference, we can say it's a flat volume sale. Natural gas transmission is also almost flat as compared to Q4 '25 in Q1 '26. So there was a physical volume transmission of 120.62 MMSCMD as compared to 120.83 MMSCMD in Q4 financial year '25. And our capacity utilization, if you talk on overall basis, it is 58%. If you talk of integrated pipeline system, which is our major pipeline system, it is 67%. Polymer production. Polymer production is down to 177 TMT in Q1 as against 215 in previous quarter, and this is normal phenomena. We basically take our annual turnaround shutdown during Q1. And therefore, this reduction in production is because of that reason only. LHC production is almost flat, and it stood at 199 TMT as against 196 TMT in previous quarter. LPG transmission was also flat. It was 1,131 TMT as against 1,132 TMT in previous quarter, and the capacity utilization is 99% during this quarter. Let me take you through consolidated financials of Q1 financial year '26 as compared to Q4 financial year '25. The consolidated turnover in Q1 financial year '26 stood at INR 35,369 crores as against INR 36,443 crores. PBT in Q1 financial year '26 stood at INR 3,029 crores as against INR 3,240 crores in Q4 financial year '25. Profit after tax in Q1 financial year '26 stood at INR 2,369 crores as against INR 2,492 crores in Q4 financial year '25. I will also take you through the GAIL CGDs. As you know, we have 6 geographical areas authorized under the GAIL's balance sheet. So GAIL is having direct authorization of 6 GAs and has infrastructure of 212 CNG stations and 4.4 lakh DPNG connections. During the quarter, 2,600 new DPNG connections were added and 3 physical value remained at 0.46 MMSCMD during the quarter with the share of APM gas at 0.169 MMSCMD and RLNG 0.291 MMSCMD. In the next year, GAIL's target to add 85 new CNG stations and -- next 2 years, sorry, next 2 years, GAIL's target to add around 85 new CNG stations and around 150,000 new DPNG connections. I will also take you through the performance of Q1 financial year '26 with respect to GAIL Gas Limited. As you know, this is our 100% subsidiary. In Q1 financial year '26, turnover of GAIL Gas stood at INR 2,927 crores as against INR 3,051 crores in Q4 financial year '25. PBT increased by 1% and stood at INR 146 crores as against INR 144 crores in Q4 financial year '25. PAT was up by 6% and stood at INR 108 crores as against INR 102 crores in Q4 financial year '25. Physical volume stood at 7.03 MMSCMD. During Q1 financial year '26, GAIL Gas, along with its JV subsidiaries has added 23,593 new DPNG connections and 3 CNG stations. GAIL Gas with its subsidiaries have an infrastructure of 11,30,000 DPNG connections and 664 CNG stations. In next 2 years, GAIL Gas, along with its JV subsidiaries target to add around 260 new CNG stations and around 260,000 new DPNG connections. I will also take you through the status of ongoing projects, which GAIL is taking up. Pipeline projects, majority of pipeline projects with Mumbai-Nagpur-Jharsuguda pipeline. As you know, this is one of the major pipeline project we are executing currently. Jagdishpur-Haldia-Bokaro-Dhamra pipeline; Kochi-Koottanad-Mangalore-Bangalore pipeline; Srikakulam-Angul pipeline, all these pipelines are scheduled to be completed during current financial year in a progressing manner. We have one more authorization of pipeline, Gurdaspur-Jammu pipeline, and this pipeline is scheduled to be completed in financial year '26, '27. In respect of petrochemical projects, as regards the petrochemical projects, PP PATA, 60 KTA projects and 1,250 KTA GMPL. These 2 projects, we expect to be commissioned during current financial year. With respect to PDH-PP, that is 500 KTA plant. This is a bit delayed and is likely to be completed in next financial year. That is '26, '27. Now I'll also take you through the CapEx of Q1 financial year '26 . During this quarter, a CapEx of INR 3,176 crores was incurred, out of which INR 536 crore incurred on pipelines, INR 542 crores incurred on petrochemicals. There is equity contribution of INR 1,458 crores, operational CapEx and some other CapEx of INR 549 crores in CGD, E&P, renewables, et cetera. And now I will take you through the short- to medium-term outlook of GAIL's business. We have been giving you regularly guidance about our marketing margin. And this quarter, our marketing margin stood at INR 994 crores. And we -- as per our guidance, which we gave during our analyst meet -- annual analyst meet in May, we said that during this year, we will earn around INR 4,000 crores to INR 4,500 crores of marketing margin this financial year. As we have already INR 994 crores of marketing margin during Q1, we maintain our guidance of INR 4,000 crores to INR 4,500 crores of marketing margins for the financial year '25, '26. In the Gas Transmission business, this segment has seen some kind of the unexpected decline in volume. We gave our guidance when we met with you in analyst meet. We gave a guidance of 138 to 139 MMSCMD volume. And subsequently, we revised our guidance to 132 MMSCMD. And we also shared the reasons with you for the revision in guidance, and let me just to keep you the -- do the brief again, what were the reasons. There was a reduction in refinery shippers volume around 3 million power sector volume because of early onset of monsoon, we were apprehending at that point of time, and actually, it is becoming early onset of onset (sic) [ monsoon ] It's a good monsoon this year. There is a reduction on annual basis of 1.2 MMSCMD in sales and 0.4 MMSCMD of shippers volume in all 1.6 MMSCMD in terms of transmission volume. And fertilizer plants, this quarter, we have seen unscheduled shutdown of some of the fertilizer plants, and also that has also resulted in 1.4 MMSCMD reduction. And if you, one of them is KFCL, which is currently not operating. Due to above reasons, we actually revised our guidance. And as you saw that our transmission volume in Q1 was 120-plus. And considering the expected transmission volume in the remaining 9 months, we want to give the realistic guide. We are not optimistic of around 132 revised guidance. We expect this year. On an average basis, we'll add around 127 to 128 MMSCMD of volume. And this is because of the -- I just shared the continued -- the frequent tripping of unplanned shutdown of fertilizer, and there is a slight reduction in CGD volume as we envisaged last year, power refinery around 0.5 MMSCMD in all the -- each of the sector. Because of these reasons, we feel that our revised guidance of 127 MMSCMD to 128 MMSCMD is achievable, and therefore, we want to revise it. In respect of coming financial year, we believe that our transmission volume will increase 235, 236 MMSCMD. And this largely will come from natural growth of CGD, which is taking place and various refineries, which are coming up: Barauni, Paradip, Haldia, Bongaigaon, Guwahati and some other customers, which will be coming up along our new pipelines. In respect of polymer, polymer production stood at 177. As I shared with you as against 215 in previous quarter, the PATA Petrochemical Complex will also under shutdown in April '25. So there has been a loss of INR 249 crores. And largely, why there is a loss. There is a -- actually, there is a reduction in the polymer prices by around INR 1,000 as compared to Q4 financial year '25. This is leading to the major reason for reduction. And also in Q1, we see the shutdown impact also comes. We are taking all the measures to keep our PATA plant at a better level than this level. And we also expect that the current prices of the gas, may also soften. We will be able to improve. But as on date, this is a situation that we lost INR 249 crores on petrochemical plant PATA in Q1. LHC production stood at 199. I shared with you. We have posted a PBT of INR 205 crores, and there is a drop of 30% PBT from LHC segment as compared to last quarter and -- which is primarily the reasons we have shared the de-allocation of PPM gas and also subsequently allocation of new well gas, which is a costlier gas. And prices of LHC had also reduced by INR 2,000 per metric tonne. I think this is the current quarter, the Q1 quarter performance I have shared. And also I have shared our revised outlook and also the outlook of other segments. And now I hand you over to you, Joshi, to take us through if any questions, our investors and analysts, we will be happy to answer those questions. I'm here and my colleagues from various departments, the marketing department and the product -- the project development department, the finance and City Gas Distributions are here. We will be happy to answer your -- any of the questions you may have. Thank you very much.

Thank you, sir. We will now start with the Q&A session. [Operator Instructions] With that, we'll take the first question from Nitin Tiwari from PhillipCapital.

So sir, my question is related to the tariff revision that we had guided for in the earlier quarter that looks likely we're going to see that revision by the end first quarter. So any renewed guidance over there? That would be my first question, sir.

Actually, in respect of tariff revision, we get guidance. We do not give guidance. We continue to follow up with the regulator. And what I can update you about the process part, the regulator has completed the process of consultation. They are now seized with the finalization of tariff agenda for approval of their Board, and we also are following. Now any timeline if give -- I have been giving a lot of timeline. If I say it comes in next month or I say in maybe in October or September, maybe -- may not be correct. But what I can tell you, it has already been ordinately delayed, and we as a company are following. We expect that tariff order to come as soon as possible. And if I say August, and I meet you in August, you will say it has not come because it is beyond my control, but we expect it to come any time from now.

Got it, sir. And sir, my second question is with respect to the petchem business. So this quarter, of course, was impacted by the planned shutdown that you want to take it. But can you give us some color in terms of how the market is looking in terms of product placement and whether we are finding any challenges with respect to placement of our products in the market in terms of pricing, et cetera? And when can we see a more secular trend in terms of profitability in this segment because the segment has been suffering with making operating losses for some time now?

Yes. In terms of product offtake, there is no challenge. There is a good amount of demand available in market. We do not even carry these stocks with us. The challenge is largely on price part. We are going through a cycle -- the pricing cycle where there is a lot of availability of polymer in international market that is also pushing the pricing pressure to price towards downward. And second, unfortunately, which we never -- we did envisage last year, the Henry Hub price, which we give to our PATA has almost doubled with our average Henry Hub price last year was $1.88 per MMBtu is on an average basis, this quarter was $3.5 per MMBtu. That means the $1.7 per MMBtu and consequential tax, the duties and the implications, this is putting a lot of pressure. So though we are taking all the measures, let me tell you, we are regularly taking the hedging -- doing hedging for input gas prices to reduce the prices for PATA petrochemicals, we -- yesterday also, we took the hedging around $3 per MMBtu. So we try to take all the measures. But in terms of guidance, we do not feel that we will be a very good in petrochemical business in this year. We may be able to reduce our losses. We may be trying to come near to breakeven level, but I will not be able to give you any guidance. We say that we will be in black during this year as far as petrochemical business is concerned.

We'll take the next question from Puneet Gulati from HSBC.

My first question is on your transmission guidance. While you did reduce your guidance for this year, even for next year's you've brought it down to 135, 136. Why would you do that? If you can share more light on that?

Every year, we'll not see the monsoon like this. Every year, we'll not see the tripping of fertilizer plant like this. That is 2 major reasons which have brought down. Let me tell you.

Your next year, I thought was higher earlier, right? I mean you were guiding for 140 plus.

Yes, yes, we have already factored -- we have now considered the base of the revised guidance of 127 MMSCMD, 128 MMSCMD to give you the guidance for next year. It means if we have reduced the abnormality for this year and natural growth the pipeline, which are coming next year for the purpose of guidance. We give guidance, which is actually on ground. I could have revised my guidance of '27-'28 in next quarter, but I feel I should give you guidance, which is actually realistic as on date.

Okay. Secondly, if you can also talk about this differential tariff impact for previous year, INR 133 crores. What is the nature of that?

Actually, what is -- I understand you may be knowing what is integrated tariff and what is [indiscernible]. There is a mechanism in PNGRB that there is a settlement committee, which takes the input from the entities with respect to their claim of respective pipeline because our claim is based on our pipeline uses. So there was a differential claim for some jobs for previous year, the 2 previous years are involved, '23-'24 and '24-'25. Those claims during settlement, we did not submit when last committee meeting took place and then we submitted our claim and PNGRB has accepted. That's what I understand. That's a claim which do not pertain to this quarter, claimed in this quarter. PNGRB has acknowledged that there was a missing link in terms of our claim. There were lesser claim by us. That is that difference and which continues to happen. Sometimes it is on a higher side. But this time, this was a substantial figure. So therefore, I thought that let us cover in our opening remarks that INR 133 crores is a one-off, which you should not consider that it is available always.

We'll take the next question from Vivekanand S. from AMBIT Capital.

Thanks for the frank and candid guidance on transmission. So I know you covered some of this in the opening remarks. Could you delve a bit more, Mr. Jain, on the specifics of the granularity of demand -- incremental demand that you expect in FY '27 and FY '28. FY '26 seems to be loss given the first half being very weak compared to last year's base. If you could talk about specific sectors and also demand sources that you may have modeled in detail so that we can jot down. That's the question.

So I understand you are asking me the next year's projection and the basis of our next year's projection. Is that right?

That's right.

So we have given our revised guidance for 128. And we have been experiencing that CGD is naturally growing at the rate of 12%. There may be some quarter-on-quarter difference. So even if you consider that demand, almost 5 million on country level basis, the demand comes from CGD gas distribution. We being a pipeline infrastructure company, having almost 65% to 70% of pipeline network for GAIL on a ballpark basis, 3.5 million naturally comes from this sector, which has been coming and the sector is regularly giving. Second, this quarter, we lost a lot of volume. Let me tell you, last year, we transported 131 million. This year, we transported 120 million. And a large part of it was from power sector, which was not expected. Today, when I am late, it is because of raining only. So because of the weather conditions, power demand was not there. So we expect at least 1 million to 2 million on an average basis, demand will be there from power sector, which has been there. When we are commissioning new pipelines like I shared in opening remarks, Kolkata section of the pipeline. We are commissioning Mumbai-Nagpur-Jharsuguda pipeline. We are commissioning Srikakulam-Angul pipeline. Volume come from there. And the refineries, which I shared, the Barauni refinery, Paradip, Haldia, Bongaigaon, Guwahati. What happened in this quarter, one unique thing, the alternative fuel prices were down. Therefore, refineries volume also reduced. They also switched over to alternative fuel. In fact, the spot demand, which used to come regularly because of higher gas prices were not available. We do not believe that such situations will always be there. We believe in normal business. And therefore, all these things will give at least 8 million to 9 million volume. 5 million, 6 million is anyway available. 2 million, 3 million volume has gone down this year and the natural growth. So 8 million volume to 9 million volume we expect will be available next year. And this will -- this guidance is on a realistic basis and not a very tariff driven guidance.

No, I appreciate the color. That really helps because otherwise, it's difficult for us to understand the path from 125 to -- 121 to 135. My second question is on the petrochemical investments. You were planning to undertake an ethane cracker investment in Madhya Pradesh. Is there any further update on that? And secondly, can you just also refresh us on the other petrochemical projects that are currently underway where you've already committed capital and the project progress is somewhere in between?

So we -- I shared in opening remarks, 160 KTA project we are putting at PATA, and it was because of the feed is available at PATA and another is PDH-PP project at Usar. These 2 projects are going to be commissioned, the PP will be commissioned during this financial year. PDH-PP will be commissioned next financial year. Regarding ethane cracker, let me tell you, we being a commercial organization, this I have been telling a lot of times. We being a commercial organization and having the wherewithal to invest in new projects look for opportunities. The Madhya Pradesh is one of that opportunity. We, time to time, evaluate the newspaper cuttings, you may have seen that those come. But in respect of decision of investment, we have not taken any decision on investment. Any decision on investment will be taken based on viability of project, whether that project is viable, what kind of incentives are available. If incentives are available, certainly making our -- which we are able to have our hurdle rates, we will take decisions. We have not yet taken any decision. We time to time evaluate various opportunities. The ethane cracker is one of those, that opportunity we are reviewing and evaluating.

We'll take the next question from S. Ramesh, Nirmal Bang Equities.

Thank you for the opening remarks and the details you have shared so far. So if you look at the decision to defer the PDH-PP project, can you highlight the reasons for this? Is there any concern in terms of the margins? Or is there any physical delay in the progress? And does it impact the capital cost for that?

Actually, there is no margin concern that we have delayed in the product. We want this product to be completed as quickly as possible. One of the civil contract, which is causing a problem, there are delays on that part, and that becomes a base part of any project. So we are regularly reviewing that. And that's the only reason. Otherwise, nothing more than that.

So what is the reason for the increase in the reduction in the depreciation from more than INR 1,000 crores to INR 800 crores?

Depreciation, INR 800 crores?

Yes, if you look at...

My colleague, Ranjana will explain you.

Actually, we have assets which are fully depreciated and any major overhauling or repairs is reflected in depreciation. So we had carried out overhauling of our compressors, which has caused that -- which is not there in this quarter. And last year, we had full shutdown at PATA. This year, we had partial shutdown at PATA. So even PATA also major overhauling and major spares were capitalized and fully depreciated. So that is the change in the depreciation this time.

Okay. If I might squeeze in one last question. In the gas marketing segment EBIT between stand-alone and consolidated, there is a downside of around INR 400 crores from INR 1,071 crores to INR 660 crores. What is the reason for that decline in the gas marketing segment earnings in the consolidated entity?

Under the stand-alone, we have not -- we are including CGD. And under the consolidated, we are separately showing CGD. So profit of CGD has been isolated from the stand-alone to consol. So if you see in the consol figures, we have shown separately CGD.

So you're saying the gas marketing in...

There is a [indiscernible] from marketing to CGD.

From stand-alone to consolidated.

Okay. But how can it be such a large swing? That INR 400 crores seems to be a fairly large swing. Is there any negative impact on the subsidiaries.

If you see overall, there is no change. We have multiple JVs and associates, which are operating in CGD segment. One is GAIL Gas, Bengal Gas. So it is the impact of those CGDs, the subsidiaries, which we have taken.

So you're saying whatever marketing margins you have booked in stand-alone is shown under the City Gas in this consolidated segment. Is that the way to understand that?

Yes, yes.

We'll take the next question from Probal Sen from ICICI Securities.

Yes. Sir, just one question, a broad question on the direction of crude prices and what impact it will have on our business. On the one hand, obviously, crude prices go up, term LNG prices and any other LNG linked to crude does go up. But what we have seen this peculiar situation where alternate fuel prices had actually gone down as a result of softness, which caused lower demand from downstream. So just wanted your view on what kind of -- what scenario you see if, let's say, crude goes up by maybe another $5 from here. How do you see the mix of demand as well as the input costs playing out for us? That was my first question.

See crude prices, as everybody has been talking, they are largely expected to remain in the range of $60 to $70 in the next few years. However, we have seen earlier also and which cannot be ruled out is the geopolitical events, which keep on happening very frequently and which tend to push the crude prices upwards on -- for a few months. Largely, they are -- otherwise, they are largely expected to remain in the $60 to $70. As far as your question is concerned, some of the alternate fuels like naphtha, furnace oil, they are -- while they are correlated with the crude oil prices, they are also linked to the refining complexities. And they are consistently remaining subdued, the alternate fuel prices, especially the propane and the naphtha which are a matter of concern. And what happened actually this year, the summer got whitewashed because the spot prices of natural gas never came down. They were not very high, but they didn't -- the summer phenomenon didn't happen in the spot gas prices, which has resulted in lower natural gas demand, which could not compete with the alternate fuels. This is slightly abnormal. Normally, the natural gas prices are able to compete even with the alternate fuels, and that is why this year, all these factors got combined.

Right. So just as a follow-up, I mean, how do we even look at it if I look at the next, let's say, 12 to 18 months? Particularly, you also mentioned, I think, for petchem that Henry Hub prices, which is also a major component of our sourcing mix, those also have risen. So if you look at our input cost scenario basically going forward for the next 12 to 18 months, what do we really see in terms of our margins and pricing for petchem, for LHC as well as for the trading or marketing part of? Just your view on -- just a very broad view in terms of how you see that evolving.

Petchem, we believe that the prices at the current level, the output prices are currently on a lower side. And we believe that this should be up by maybe a few thousand rupees. That is actually putting pressure. Secondly, as I shared, the Henry Hub price, which we are using is also not supporting us. Last year, it was substantially down. But as my colleague also said with respect to question, this is actually not a normal situation, which we are experiencing that Henry Hub prices are higher. So we believe that these prices to be softened. And time to time, we also track -- regularly tracking the market and taking positions in paper market to keep the cost down. So these -- first, the optimism, our expectations that price will come down. Second, our actions on paper market will help -- certainly help the PATA Petrochemical to give its improved performance. And how much we are able to do that really difficult to predict, but we'll say we'll be able to improve from the situation we are in today.

Understood, sir, if I can squeeze in one last housekeeping question. CapEx guidance for FY '26 and '27, if available, breakup between segments?

We have a CapEx plan of around INR 12,000 crores in financial year '26, '27. And that largely will be pipeline projects around INR 4,000 crores, CGD projects, a very small CapEx of around INR 200 crores, petrochemical projects, INR 2,500 crores, E&P INR 500 crores, we have net zero plan, and we are working on that around INR 2,000 crores. Then operational CapEx, INR 1,400 crores, equity contribution, INR 850 crores, and there are other projects, INR 500 crores.

We'll take the next question from Sabri Hazarika from Emkay Global.

Yes. So sir, regarding this transmission guidance, so 127 MMSCMD is for the full year average. Is that right?

Yes, yes.

And what is the run rate currently, the volumes that we have lost, what you have mentioned when we fell to like, say, around 120 MMSCMD. So right now, fertilizer plants and all they have normalized? Or right now, what could be the run rate, if you're able to disclose?

Actually, the current run rate is hovering around the average which we expected and around 132 MMSCMD. That means 127 MMSCMD to 130 MMSCMD, 131 MMSCMD depending on the day -- if it is Saturday -- Sunday, not Saturday, Sunday, it goes down to the average of 127 MMSCMD. If it is not Sunday, then the -- it is around 130 MMSCMD, 131 MMSCMD. And also, it is depending on the weather conditions. So fertilizer plants are almost now -- working at a normal level. But then we are running at around 127 MMSCMD. Currently, if you talk of July, we are running at around 127 MMSCMD and sometime beyond that. And even someday, there will be 1 million or 2 million lower. So we have worked out how from where this volume will come because as we are connecting pipelines also, that is not factored today. When you talk July, those pipelines are getting connected, those volumes will be added. So all these we have worked out from where these volumes comes. But again, to sum up, we are currently in this month working -- running around transmission around 126 MMSCMD, 127 MMSCMD; sometimes 130 MMSCMD, 131 MMSCMD.

And this Dhabhol is operating normally this monsoon, right?

Dhabhol, yes, that's a positive for us.

Okay, sir. And sir, second question is on this PDH-PP. So right now, how are the margins of PDH-PP?

Actually, when we consumed this project, it was giving us beyond our hurdle rate. And even today, we are expecting around 13% to 14% of project IRR. And that's how we have recently also checked and let us see how it goes. That's the current expectations.

And this propane will be brought from Middle East only? Or do you -- are you looking at U.S. and other things?

Actually we have signed a contract -- a long-term contract with BPCL for 15 years contract, where we will bring the propane at jetty. One contract is with respect to jetty. This is a bundled contract. They will supply us on Saudi CP basis. So that's the benchmark where from they source, what they do. But for us, index is fixed.

We will take the next question from Vikash Jain, CLSA.

Just one since you mentioned that you are at 127 MMSCMD right now in terms of volumes in July as compared to less than 121 MMSCMD for the quarter. So this extra roughly 6 MMSCMD on an average, is this largely from fertilizer plants now operating normally as compared to the scheduled and unscheduled shutdowns that we saw in the first quarter? Or is there anything else which is more noticeable? It's primarily that bit, is it?

It's primarily that. And also, we were not operating our PATA Petrochemicals during the first quarter. That was also shut down. So that is also substantial. So in terms of major volume, this is from 2 sectors, the fertilizer and also from PATA.

And sir, this -- to give a guidance of 128 MMSCMD means you're talking of possibly going well above 130 MMSCMD, 132 MMSCMD at the exit levels. So this incremental, is there a hope built in that players like refinery, et cetera, will come back? And is there -- that is going to take volumes back to 128 MMSCMD on an average for the year?

That is part of that working.

Okay. And of the current volumes, what proportion is the more price-sensitive sectors like refinery and maybe petrochem, how much is of this 127 MMSCMD that you're currently doing in July, what proportion is refineries and what proportion is petrochemicals?

Just hold on, I was asking my colleague in marketing.

That refinery, pet-chem segment is roughly 20% of the whole basket. And -- going forward, why we are hopeful of achieving this number is primarily because, number one, PATA was shut down, as sir has already conveyed. There were some scheduled shutdowns of fertilizer plants, but there were also a lot of unscheduled shutdowns. So all these 3 factors will not be there going forward, the scheduled shutdowns, the unscheduled shutdowns and the PATA. And we are still hopeful of some demand coming from the power sector in the late summer, like September, October, which normally comes back after the monsoon season, especially when the monsoon this year has happened very early.

Okay. Sure. Just 2 last bookkeeping things. One is that this INR 133 crores would be revenues for the Gas Transmission segment, just double confirming that, right? That's the extra...

That's right.

And in your opening remarks, you mentioned that you've achieved the marketing margin, which I'm assuming is marketing EBIT of INR 994 crores, but I think the release has somewhere around INR 1,070 crores or something. Can you confirm which number or what is the difference?

Basically, you are talking about the publications, what we published in the quarterly accounts.

That's right.

About only PBT levels.

Okay. So what INR 994 crores is the PBT level, you mean?

Yes.

And the publication is EBIT. That's what you mean?

INR 1,071 crores.

In fact, if you compare your guidance, it is INR 1,071 crores. That's what we said.

So the INR 4,000 crores -- the guidance that you have INR 4,000 crores to INR 4,500 crores as against that, we have got INR 1,070 crores.

And similarly, we have been giving last year's guidance also.

Sure, sure. No, no, no, just because that number was confusing.

We'll take the last question from Amit Murarka from Axis Capital.

Just a question on the PNGRB revision. Like I believe [Technical Difficulty] more than 1.5 years since we have been talking about it. So I just wanted to know when this revision happens, it will be prospective, right? Just wanted to confirm on that.

Yes. Actually, regulation is like this. The month in which the tariff is approved, it is applicable from the subsequent month from the month it is approved. So if it is approved, say, in July, it will be applicable in August. Only thing is that what PNGRB does first, they approve the tariff, then they ask entities to submit general tariff. When we submit the general tariff, that is actually the approval, but that's a very, very small process. So that sometime also delays maybe by 15 days, but it will be prospective.

Right. So more or less -- I mean, I believe 3 years anyways is the regular time line for review of pipeline tariff. So more or less, we are falling along those time lines now if, let's say, it's getting delayed by further another 6, 8 months. So I just wanted to reconfirm that like will it still be [Technical Difficulty] an interim review? Or how does it work?

Actually, there is nothing in regulations, which is called an interim review. The periodical review happens in 5 years, but not before 3 financial years. This time, they called for submission of tariff, the PNGRB called because there is a provision in the regulation that if any change in substantial parameters, then they can -- either we can approach or they can ask. So there was substantial change in the parameter in terms of capacity or also in terms of gas prices. PNGRB, when they revised the tariff last time, they considered significantly higher capacity. Later, they engage EIL and based on the recommendation of APM, PNGRB revised the capacity, which is downward. Second, they considered the APM price of $3.61, which are nonexistent price, and now they have come out with the regulation that they will consider $11 as a gas price for fuel consumption. So that's -- of course, they have come recently, but that was in their mind. So there were the reasons they did not follow the regular time line. And it is in terms of regulation only that can be called for. So this will -- there is nothing like interim, but you can say because of change in parameters, they can revise an interim. So this is -- in that sense, it is interim.

Thank you, sir. That was the last question. Over to you for any closing remarks. Sir, request you to unmute your line for any closing remarks.

Sorry. So thank you very much. It was a nice interaction with you all, and I hope we were able to answer to most of your questions, maybe all the questions. If you or investors may have any more questions, certainly, we welcome you, and you can connect with our [ Mac ] an IR team and which will be happily responding to any more questions you may have, which we could not answer or you could not ask. Thank you very much.