GAIL (India) Limited (GAIL.NS) Q2 FY2026 Earnings Call Transcript & Summary

Ladies and gentlemen, good day, and welcome to GAIL (India) Limited Q2 FY '26 earnings conference call hosted by PhillipCapital Private Limited. [Operator Instructions] Please note that this conference is being recorded. I now hand the conference over to Mr. Nitin Tiwari. Thank you, and over to you, sir.

Thank you, Shruti. Good day, ladies and gentlemen. On behalf of PhillipCapital India Limited, I welcome everyone to GAIL (India) Limited's Second Quarter FY '26 Earnings Call. Today, we have the pleasure of having with us the senior management team of GAIL, led by Director of Finance, Sri R.K. Jain. I will now hand over to the management for the opening remarks, which shall be followed by a question-and-answer session. Over to you, sir.

Thank you, Nitin. Friend from the investors and analyst community, a very good afternoon, and welcome to GAIL's earnings call for Q2 financial year '26. At the outset, I thank you all for attending this meeting. Let me first begin with the latest business development updates. It gives me immense pleasure to inform you that on October 16, 2025, GAIL's Srikakulam-Angul pipeline, which is a 442-kilometer has been dedicated to the nation by Honorable Prime Minister. Further, physical progress of Mumbai-Nagpur-Jharsuguda pipeline has reached to 97% and PESO approval for Mumbai-Nagpur section, which is 693-kilometer and Chhattisgarh-Odisha section, which is 489-kilometer has already been received and gas is under process. The remaining pipeline is in advanced stage of completion and scheduled for commissioning by 31st December 2025. On September 9, 2025, GAIL got PNGRB authorization to lay, build and operate pipelines from Vijaipur to Bina. This will connect to the BPCL Bina refinery. The pipeline will have a capacity of 3 MMSCMD, and this is 105-kilometer length and involve a CapEx of INR 450 crore. The time line for laying this pipeline is 3 years. This pipeline will become part of integrated natural gas pipeline system of GAIL. As already informed earlier, GAIL has got authorization for capacity expansion of JLPL LPG pipeline from existing 3.25 MMTPA present to 6.5 MMTPA. Based on current tariff rates, this will increase GAIL's revenue by approximately INR 700 crore. As you know, the tariff is also increasing every year by 3.4%. So that will further add to GAIL's revenue. And it will also improve GAIL's bottom line around INR 600 crore per annum at the EBITDA level, not bottom line at an EBITDA level. And again, the increase of tariff of 3.4% will have further addition to it. GAIL's results for the quarter ended 30th September 2025 have been declared today. I will briefly touch upon the major highlights for this quarter. Thereafter, we may open the session for your queries. First of all, I will take you through the financial highlights of the quarter. GAIL's turnover in this quarter, that is Q2, is almost flat, which is INR 34,972 crore as against INR 34,735 crore in Q1 financial year '26. Profit before tax stood at INR 2,823 crore as against INR 2,533 crore in Q1 financial year '26. This is up by 11%. The profit after tax during the quarter increased to INR 2,217 crore as against INR 1,886 crore in Q1 financial year '26. This is up by 18%. On a comparative quarter basis, that is quarter 2 of this financial year versus quarter 2 of financial year '25, GAIL achieved turnover of INR 34,972 crore as against INR 32,810 crore in corresponding period of last year, an increase of approximate 7%. Profit before tax stood at INR 2,823 crore as against INR 3,453 crore. This is down by 18%. And profit after tax stood at INR 2,217 crore as against INR 2,672 crore, down by 17%. Now I'll take you through the physical performance during the quarter. Gas marketing volume during the quarter stood at 105.49 MMSCMD as against 105.45 MMSCMD in Q1 financial year '26. The natural gas transmission volume was 123.59 MMSCMD in Q2 financial year '26 as against 120.62 MMSCMD in Q1 financial year '26. The average capacity overall basis, if we take of the total capacity, authorized capacity is 59%, but I will talk to the integrated natural gas pipeline system, which is the main revenue earning system. As for the capacity worked out by PNGRB, the applicable capacity for tariff determination for '25-'26 is 150.46 MMSCMD. And considering the volume flow in this integrated pipeline system of 111.76 MMSCMD, the capacity utilization for this pipeline was 74.28%. Polymer production was back to normal level of 220 TMT in Q2 financial year '26, which stood at 177 TMT in previous quarter due to annual turnaround. Liquid hydrocarbon production stood at 221 TMT as against 199 TMT in previous quarter. LPG transmission was 1,167 TMT as against 1,131 TMT in previous quarter. The capacity utilization was approximately 101% during this quarter. Now I will take you through the consolidated financial highlights for quarter 2 financial year '26 versus quarter 1 financial year '26. The consolidated turnover in Q2 financial year '26 stood at INR 35,594 crore as against INR 35,369 crore, almost flat. The PBT in quarter 2 financial year '26 stood at INR 2,565 crore as against INR 3,029 crore in quarter 1 financial year '26. The profit after tax in Q2 financial year '26 stood at INR 1,972 crore as against INR 2,369 crore in Q1 financial year '26. As you know, GAIL also has got 6 geographical areas authorized as city gas distribution. I will also share the performance of these 6 geographical areas. GAIL has an infrastructure of 213 CNG stations and 4.5 lakh DPNG correction. During the quarter, 13,700 new DPNG connections were added. The physical volume stood at 0.46 MMSCMD. In the next 2 years, GAIL targets to add around 85 new CNG stations and around 150,000 new DPNG corrections. As you know that GAIL also has got 100% subsidiary exclusively dealing in retail business. Now I will also briefly touch about the financials of GAIL Gas Limited. In Q2 financial year '26, turnover of GAIL Gas stood at INR 3,235 crore as against INR 2,927 crore in Q1 financial year '26. PBT increased by 1% and stood at INR 148 crore as against INR 146 crore in Q1 financial year '26. Profit after tax was up by 3% and stood at INR 111 crore as against INR 108 crore in Q1 financial year '26. The physical volume stood at 7.72 MMSCMD. During Q2 financial year '26, GAIL Gas along with the JV subsidiaries has added 44,512 new DPNG collections and 1 CNG station. GAIL Gas with its JV subsidiaries have infrastructure of 11 lakh, 74 thousand DPNG connections and 665 CNG stations. I will also touch upon the ongoing projects with GAIL. Pipeline projects SAPL, as I already shared, is commissioned and MNJPL, JHBDPL, KKMBPL Phase 2 are scheduled to be completed during this financial year, and Gurdaspur-Jammu pipeline is scheduled for completion in financial year '26-'27. Petrochem project -- petrochemical projects. I will first share about the 60 KTA polypropylene at Pata and -- sorry, 60 KTA polypropylene at Pata and 1,250 KTA/PTA plant at GMPL are scheduled to be commissioned in current financial year, whereas 500 KTA PDH-PP plant at Usar is expected to be completed in financial year '27. CapEx for quarter 2 financial year '26. During the quarter, a CapEx of INR 1,662 crore was incurred. Out of which, INR 784 crore was incurred on pipelines, INR 514 crore was incurred on petrochemicals, INR 226 crore is operational CapEx and remaining approximate INR 138 crore on CGD, E&P, renewables and equity investments. Now I'll share also the segment-wise outlook for short to medium term. The profit before tax from gas marketing business during the quarter stood at INR 1,227 crore. The gross margin during the quarter stood at INR 1,551 crore. The PBT from gas marketing margin during H1 financial year '26 stood at INR 2,221 crore. The gross margin during the H1 financial year '26 stood at INR 2,866 crore. At PBT level, we are on our path to achieve the annual guidance of INR 4,000 crore to INR 4,500 crore from the gas marketing segment in financial year '26. In the gas transmission segment, during quarter 2 financial year '26, average transmission volume improved to 123.59 MMSCMD as compared to 120.62 MMSCMD during Q1 financial year '26. Average transmission volume for H1 financial year '26 stood at 122.11 MMSCMD. From gas transmission point of view, the current financial has not been so good for GAIL. We had to revise our guidance earlier. The main reason for this downward revision were delay in pipeline connectivity to refineries, unplanned shutdown and tipping of fertilizer plants, lack of demand from power sector due to moderate summer, early onset and above average monsoon. This situation was further burdened by higher than usual pricing of natural gas in the spot market, which impacted the consumption in domestic market as refineries and industries switched to alternative fuel. Further, due to extreme monsoon and flash floods in Northern India, GAIL suffered pipeline disturbances at 4 places, which are expected to be restored by the year-end. Currently, the services are being managed partially through alternative arrangements. This also has impacted the transmission volume, which will be replenished as soon as the pipelines are operational again. Due to above unforeseen circumstances, the annual transmission volume for financial year '25-'26 is expected to be at the level of around 123 to 124 MMSCMD. However, considering that most of the old factor may not be there and there will be normal growth and commissioning of new pipeline that is SAPL and MNJPL, GAIL expect transmission volume to be increased by around 8 million to 10 million, and we expect our volumes to be around 133 to 134 MMSCMD in financial year '27. Polymer production stood at 220 TMT as against 177 TMT in previous quarter. There is a loss of INR 299 crore during quarter 2 financial year '26 due to increased input gas cost. The various -- this segment is likely to be at similar level for the remaining part of the year. However various measures like construction of dedicated pipeline, the C2C3 pipeline, installation of advanced process control, debottlenecking and 60 KTA PP plant are being taken for cost optimization and improvement of efficiency. Since mostly -- since HS gas is being -- mostly HS gas being used as an internal consumption by Pata PC plant and HS price have been unusually higher during this year, which is expected to be softened in coming financial year. These factors will hopefully start giving positive results from next financial year onwards. LHC production stood at 221 TMT during Q2 financial year '26 as against 199 TMT in previous quarter, with a PBT of INR 112 crore. There is a drop of 45% in PBT from LHC segment as compared to previous quarter, which is primarily on account of reduced price. As you know, the LHC price on an average basis has gone down by approximately INR 4,600 per metric ton. GAIL's new well gas allocation for LPG shrinkage has been reduced from 0.32 MMSCMD to 0.2 MMSCMD with effect from 1st October 2025. Estimated impact on production will be around 33 TMT for H2 final year '26. GAIL management is constantly taking up the matter for further allocation of domestic gas or LHC to enhance the capacity utilization of our LPG plants. In addition to above operational and financial performance, I would like to highlight that company is taking proactive measures to implement initiatives for maximizing profit and make our company future-ready with the introduction of advanced technologies and AI-based projects. Project Sanchay-2, our flagship project is focused on maximizing profitability across 4 business segments through targeted improvements, enabled by advanced data analytics. Under the above project, GAIL is implementing 30 use cases leveraging advanced technology with an estimated CapEx of INR 146 crore. These use cases together are expected to provide the operational saving of approximately INR 600 crore on 5-year NPV basis, in addition to huge quantitative benefit in optimization of process, manpower and material. That's all from my side regarding the overview of performance and projects. The management of the company is available, and we would be glad to address any query that you may have. Now I hand over to you, Nitin.

[Operator Instructions] The first question is from the line of Probal Sen from ICICI Securities.

Sir, first question was with respect to the volumes. Because of the way that the rains have gone, obviously, demand from the power sector has been a major factor driving the slower demand. So any guidance you can give us of what H2 looks like given the very long tail of monsoons we have seen in the country this year?

So I shared in terms of average volume for this financial year, which is around 123 to 124 MMSCMD, and we expect in H2, we will be around 125 MMSCMD.

So not much change in terms of segmental demand is what we're looking at least for this year.

Actually -- yes, yes, you're right, not much change, but kind of quarter 1, we saw -- we are not going to see those things because in quarter 1, as we shared, fertilizer plants went for shutdowns, the power demand was not there. Our petrochemical plants were also under shutdown. So quarter 2 onwards, we have started seeing the normalcy, and we will see some kind of growth in terms of commissioning of new pipeline and the normal growth.

Got it, sir. And a couple of more questions. One was about the Dabhol LNG with respect to the progress on getting into full utilization. Any guidance on FY '27 in terms of the terminal utilization that we can get?

So as we shared with you, Dabhol terminal is now full by the terminal, right? And the nameplate capacity of that terminal is 5 MMTPA. But only one constraint is still we are experiencing that we do not have the heating system. Whenever RGPPL runs, we are able to take the advantage of the heating system available there. But in the absence of heating system, we are expecting to utilize around 50% of the capacity. And the heating system will also be available some time in '26-'27.

Got it, sir. And last question from my side. You had, I think, mentioned in previous interaction that the last leg of that Kochi-Bangalore-Mangalore pipeline is imminent in terms of completion. So if you can kindly refresh us in terms of latest time line for both the legs to be fully operational?

Yes. I shared with all the pipelines. Actually, including KKMBPL the last leg, which is pending, Jagdishpur-Haldia and MNJPL, all the pipelines GAIL is constructing, excluding Gurdaspur-Jammu pipeline will be commissioned during this financial year.

The next question is from the line of Balaji Das from Allianz Services.

So I have basically 2 questions, right? First question is like, what is the latest status on this integrated tariff, which is pending from the PNGRB? Like we heard that there has been frequent discussions, and there is some difference of opinions in the tariff billing and et cetera. So could you please provide the latest progress on this integrated tariff pipeline actually?

Actually, as you know, we submitted our pipeline -- integrated pipeline tariff way back in August '24. All the processes has been completed. And now with regard to various information news, which are going around, we don't bother about these news. Because we are very clear what tariff we have submitted that is INR 78, which is in terms of the regulations. And we share that even if PNGRB based on past moderations PNGRB does, we were sharing some time in March that our tariff will be around INR 70, INR 71. But in between, one development has happened. PNGRB has changed its regulations with respect to sharing of revenue, about 75% utilization of pipeline, 50% to be retained by entity and 50% to be passed on to customers. That regulation is also giving some kind of increase to tariff. And second, the amount of delay, it is happening in the processing of tariffs. That is also adding to the tariff. So maybe INR 0.20 per month is increasing. So our guidance that on a conservative basis for INR 70, what past that should increase by INR 2 to INR 3. Now coming back to a specific answer to your question when it will come, we expect it can come in any time from now, maybe in November.

Okay. And sir, second question is like on this -- we heard like the listing of the GAIL Gas IPO actually, so any other progress on the consultant and when are the future plans actually for GAIL Gas actually because we heard that we are hiring consultants for the analysis of listing and...

Yes, yes, you heard rightly. But GAIL Gas is one of the biggest company in the country in terms of city gas distribution. I shared in the brief that currently, it is marketing 7.26 MMSCMD volumes. GAIL Gas has got most of the geographical areas any distribution company has. We have one of the geographical areas like Bengaluru. It has already reached 1 MMSCMD. And we, in GAIL, believe that now it is high time that we start the process of listing GAIL Gas. In that regard, we have already started the process of hiring of consultant. As I understand, the consultant has already been selected and the order may have been given -- we maybe in giving in very few days from now. Either it might have been given or maybe given. So we are on our path to study about listing of GAIL Gas and after conclusion of study. Certainly, that study is very important for us. We expect a 1-year time line or so should be good enough.

The next question is from the line of Amit Murarka from Axis Capital.

Just a question on petrochemicals. What was the input gas cost in Q2, if you could just tell that?

The input gas cost in Q2 was around $10.6 -- $10.5, $10.6, deliver at Pata.

So this is expected to go up given that Henry Hub has actually increased?

Actually, Henry Hub has started softening now. I also briefed you that we have experienced unusually higher Henry Hub price. If you compare last financial year, Henry Hub prices were 50% of the current price levels. So it is already worth speaking, and it started softening. Currently, Henry Hub prices, we do not believe that it will further go up, rather it will be soften. That's how we expect that in next financial year, a lot of good positive things should happen with us.

And what is the outlook on OpEx? The OpEx has also -- looks like it has increased a bit in the quarter on the transmission side?

Transmission side, OpEx, I will have to come back. I don't think -- I don't know from where you are arriving at. Rather gas consumption has gone down. Anyway, we can offline you for your specific details. But during the quarter, it has reduced as compared to previous year. Yes, that's what I was telling. It has reduced.

No, no, not against previous year. I was looking at versus Q1. So Q1, it was actually INR 836 crores, which is INR 905 crores in Q2.

We will be giving this very, very soon. There is no big difference in what you are sharing. Will be giving you off-line this answer. You can connect our IR team.

Okay. And lastly, what is the outlook for gas transition volumes for FY '27? Like this year looks like we will do close to 124 MMSCMD or so. Next year, like earlier, you were talking about 135 MMSCMD for FY '27. So do you think that could also be at risk now with weaker numbers we are seeing in '26?

Actually, this year, we were expecting -- last year, we transported 131 MMSCMD. We were expecting that we will beat this number, but whatever events which has happened during this, I narrated, like in terms of power demand, which has significantly gone down. Nobody would have expected that the monsoon, there will be early onset of monsoon. The summer will be below average kind of summer and the spot prices will be higher and, therefore, the refineries, in particular, have shifted to alternative fuel. Henry Hub prices were also higher. And our 4 pipelines got impacted due to heavy monsoon. So all these are the unique and one-off kind of situations. So we maintained this. Next financial year, we will be having 134 to 135 MMSCMD kind of volume.

The next question is from the line of Sabri from Emkay Global.

So I just revised your opening remarks. I think you mentioned something about tariff for the first 2, 3 minutes. Can you please like -- again, like touch that upon?

You are talking of tariff approvals?

I mean, initially you -- I mean, you started with the tariff part, right? I joined 4, 5 minutes late. So that's what I would like to know about tariff.

We did not share anything about tariff. I only answered with respect to the question which earlier participant had asked about the tariff approval when it is likely to happen. If your question is that, I can repeat that answer.

No. My question is on the opening remarks. You -- before you touched upon the results, you were updating something 2%, 3% to be growing.

No, I was updating about commissioning of various pipelines, not tariff.

Okay. So that would lead to some sort of like blended increase in tariff cost. Were you touching about that?

No, no. That will not increase -- yes, on company basis, it will change the tariff. But those are the MNJPL, Srikakulam-Angul are bid out pipelines. Their tariff is fixed. So overall company level, certainly, it will change the blended tariff.

Right, sir. Okay. Got it. And second question is on this new pipelines only. I think these are like bid out pipelines, right? But Srikakulam-Angul is bid out, right?

Srikakulam-Angul is also bid out. We got 3 pipelines under bidding. One is Srikakulam-Angul, second is Mumbai-Nagpur-Jharsuguda. And third is Gurdaspur pipeline.

Right. And I think the tariff is like about INR 100 per MMBtu in each of them, right?

That's a good tariff, yes.

So I just wanted to know given that you have got capacity left in the integrated network also, would you be able to push volumes in this tariff? I know Srikakulam-Angul is a specific route, but Mumbai-Nagpur-Jharsuguda is somewhat parallel to Jagdishpur-Haldia. So what's your strategy...

How it's parallel to Jagdishpur-Haldia? Jagdishpur-Haldia is eastern pipeline. That is the west-east pipeline. It's not parallel.

No, I mean it's connected only. I mean that way I think Haldia-Vijaipur-Jagdishpur...

No, no, it connects the terminal, yes, but the market is different.

Okay. Okay. So how much volumes you're expecting in these new pipelines, say, by FY '27 or '28?

So next year, we expect around 2 million volume from these pipelines because these are beginning to start marketing or transmitting volumes. So next year, we expect 2 million, then it will ramp up.

[Operator Instructions] The next question is from the line of Yogesh Patil from Dolat Capital.

Sir, in Q2 FY '26, our gas transformation segment per unit tariff realization has declined compared to the Q1 FY '26. Any particular reason in a reduction in the tariff realization?

Yes. Yes, yes. Actually, in Q1, we got INR 133 crore on account of tariff reconciliation on unified tariff, right, which is not available this quarter. So that is how the weighted average tariff or total tariff -- weighted average tariff rather of Q1 was higher. This quarter, since that was a one-off kind of thing, it is not available. Second, quarter-on-quarter, the average tariff will continue to change sometimes. It will be higher, sometimes it will be lower. The major reason is that it depends which zone has transmitted how much volume because zonal tariff rates are different. So these -- one is the reason I shared about INR 133 crore. And second is also how much around INR 50 crore on account of weighted average.

Okay. That INR 50 crore is on upon the weighted average basis?

And weighted average tariff is also not much, 60.68% to 60.11%.

Okay. Sir. Sir, second question is regarding our upcoming petrochemical projects, which are expected to complete in FY '26 and FY '27, which you guided. Can you guide us what quantum of EBITDA contribution one can expect from these petrochemical facilities in next 1 to 2 years? Any numbers you can share with us?

So if we talk first off, the small capacity addition at Pata, I think which may not be very significant from your point of view, that is 60 KTA capacity we are putting at Pata. So by this year-end, it will start producing. And since it a facility at Pata, it will remain around same level what Pata is doing because much -- nothing much is going to change. But if you talk of PDH-PP, which is 500 KTA facility at Usar, this is going to be commissioned in financial year '27. And effectively, it will start contributing in financial year '28. So if I start forecasting Polymer price for 2 years ahead, it will not be good on my part. But if you talk of the kind of EBITDA levels in terms of dollar, maybe $250 per metric ton to $300 per metric ton will be kind of EBITDA will be available to us. That's based on our project approvals and which holds good even today.

And sir, any updates on the JBF side, which will be completed in FY '26?

Yes, it is going to be complete during this financial year, yes.

But any probable numbers which we can expect contribution to the EBITDA from that project post completion?

We'll come back -- numbers. So we will give you because ready -- I don't have ready number available, we'll be able to share with you offline.

Okay. Sir, last question related to our new LNG sourcing contracts, which will start mostly from the next year, 2026. Need a small clarity. Are we able to regasify all of these new LNG cargoes at our Dabhol terminal? Because as you mentioned that facility will be ready in the next year so that we will be able to operate it at 100% level MMTPA.

So currently -- let me answer it differently. Currently, we have 2.5 million tonne capacity at Pata, which we have booked -- sorry, Dahej and 1.5 MMTPA capacity at Dhamra and 2.5 I shared with you is almost available without even the heating system at Dabhol. So currently, we are able to manage our cargoes from these facilities. But when the next year, the one more new contract starts supplying, certainly, we will be needing more regasification capacities. Currently, we are working to tie up the additional regasification capacities with the terminal operators where we feel that the market is there. And meanwhile, our Dabhol terminal will also start functioning at 5 MMTPA. But I believe that this capability will still be not sufficient kind of demand we accept in our country. So we have already taken a decision to expand Pata Petrochemical from current level of 5 -- sorry, again I'm talking about Pata. Dabhol terminal from 5 and I'm taking that to 6.5 and discussing about increase of capacity of Dabhol terminal from 6.5 to a higher level. So we are quite conscious of the capacity availability currently and the capacity requirement in future. So 2 actions are to some up. One, we are tying up more regasification capacities with different terminal operators. And second, we are also taking actions to expand our Dabhol terminal beyond the existing nameplate capacity of 6.5 and thereafter from 6.5 to, say, 10 or 12.

Suppose 6.5 MMTPA target Dabhol capacity, evacuation pipelines would be ready? Or do we need to inform PNGRB and they will ask us for the new pipelines to be...

Already for 6.5, we have taken actions. The PNGRB has authorized the expansion of DUPL-DPPL pipeline. We are already starting the construction job. So that concern is not there. As and when we take up the business for further enhancing Dabhol terminal capacity, certainly, we'll go back to PNGRB for further expansion.

So as of now, is it a correct understanding if we expand till 6.5 MMTPA, the evacuation of gas is possible with the existing infrastructure? That is the correct understanding?

Yes.

[Operator Instructions] The next question is from the line of Vikash Jain from CLSA.

Rakeshji, a few questions. Firstly, is your guidance of increasing volume in FY '27 to I think 131, 132, which is roughly anywhere around 8 to 10 MMSCMD more than the average for this year. That -- in that, how much -- could you give the breakup of that? What is the assumption of some of the lost -- the power volumes, which did not happen this time that coming back...

So you have the detailed breakup. Meanwhile, let me take up -- Vikash, last year, we transported 133 -- 131. This year, a lot of unwanted events have happened. So coming back to your -- answer to your question from where at 8 to 10 will come, the 3 million to 3.5 million will certainly come from the city gas distribution company, which is a normal growth, which we have experienced this year also. Second, the power volume is around 2 million -- 5 million to 2 million was down. That will come up. So that makes 5 million. Then 2 million, I shared that we will be having volume in MNJPL and Srikakulam-Angul, that makes to 7 million. And then refineries volume, which has gone this year. Actually, we cannot expect every year to be same. Almost 2 million to 3 million volume we lost to refineries. One more event, I shared that the 4 of our pipeline got impacted because of the heavy flood. Those volumes are around 1.5 million to 1 million. So this is broad backup. I have not given any new market like coming to Eastern sector or normal growth in Eastern sector. But this set makes to 8 million to 10 million volume. And I'm corrected, power is 3 million, not 2 million.

Okay. Okay. And the other question was on CapEx. The CWIP that we had at the end of, say, FY '25 and also there will be a number higher than that at the end of this quarter. How do we see that's like over INR 20,000 crores now? How do we see the stand-alone number? How do we see that falling at the end of FY '26 and the end of FY '27 as your projects get -- pipelines get commissioned this time and by FY '27, even the petchem will -- plant will get commissioned?

Let me give answer to this question. Around INR 8,500 crore belongs to MNJPL, right? That is going to be commissioned by this financial year-end. That is a major setback. The Pata Petrochemicals, PDH-PP around INR 1,300 crore going to get commissioned this year. Then KKMBPL, my colleague will give a figure. I don't have readily available figures. Phase 2 is going to get commissioned, which is also significant, maybe around INR 2,000 crore to INR 2,500 crore, that will get commission. So this year -- and Jagdishpur-Haldia, some capitalization will also take place in Jagdishpur. These 4 major CapEx CWIP around INR 13,000 crore to INR 14,000 crore will be capitalized -- likely to be capitalized in this financial year. Then PDH-PP Usar will get commissioned in '27. So remaining CWIP belongs to PDH-PP and smaller to Gurdaspur. So largely extra PDH-PP and Gurdaspur, which is a very small project, will get commissioned this year.

Okay. Okay. And sir, just last thing. Any change in guidance, any update on gas trading or anything on that side in terms of...

Vikash, I have been maintaining since the beginning of this financial year that we will be earning around INR 4,000 crore to INR 4,500 crore on EBITDA level. And we have already crossed INR 2,200 crores in first half in spite of the various negative things. So we expect that we will certainly touch INR 4,500 crore of guidance at PBT level, and we may even exceed that.

Okay. Anything for next year also, sir?

Next year will be around same level. We do not expect any new addition to this guidance because a lot of things depends. But in terms of guidance, I will maintain around that level only.

The next question is from the line of Varatharajan from Antique Limited.

In the case of GAIL Gas, if you can give us a breakup in terms of CNG under GAIL as well?

GAIL Gas, you're looking for breakup in terms of CNG, PNG supplies?

That's right, sir.

And let me see whether that data is here or not -- yes, Q2. So we have bulk trading in GAIL Gas in 4.5 MMSCMD, bulk trading, which GAIL Gas does. Then past PDM zone, which is the UPM-based pricing, 1.32 MMSCMD. And in terms of city gas distribution, which includes PNG, CNG put together around 2 MMSCMD.

Okay. And similarly for the 6 GAs under this?

Sorry? 6 GA, I can give you. 6 GA, actually, I don't have the breakup the way you wanted, but largely, it will be satisfying your requirement. We marketed 0.46 MMSCMD, which constitute 0.17 MMSCMD at APM. So largely, it will be PNG and CNG and some portion of RLNG also will be there. And 0.29 MMSCMD, we have used RLNG. So I don't have the breakup you wanted, but I can give you offline.

Sure, sir, I'll take it. My last question is on your JBF. I see that you have floated a proposal for connecting the pipeline to the port. So why would you even consider that in the presence of MRPL potentially who can supply pretty much all your requirement in terms of our par value?

Actually, initially, we were expecting that we'll get to supplies from MRPL, but somehow things could not materialize as of now when I'm talking. But anyway, even if we are able to tie up with MRPL in order to continuously run the plant, nothing wrong about having alternative supply. And it also gives us flexibility to take the benefit of price advantage. So currently, we do not have any contract with MRPL. So that's the constraint. And second, it always provides a price opportunity and redundancy of the sources. So these are the 2 reasons why we are laying the pipeline connecting port for importing paraglidings.

The next question is from the line Gaurav Jain from ICICI Prudential.

Sir, just one question from my side. This INR 4,000 crore to INR 4,500 crore marketing guidance that we gave, that is at the EBITDA level or EBIT level? Is it EBIT or EBITDA?

It is actually PBT level.

PBT level, right?

If you talk of margin level, I also share those numbers. It is around the INR 2,866 crore. If you are interested in EBITDA level, INR 2,866 crore. I shared that also.

Yes, yes. But the guidance of INR 4,500 crore, is it PBT level?

PBT level, yes.

The next question is from the line of Somaiah from Avendus Spark.

Sir, first question is on the volume for FY '27. So you did explain in terms of what are the factors that will drive the 8 to 10 MMSCMD. We also used to have a start-up of new refineries which would contribute and also some ramp-up on the fertilizer plants. So is this considered into FY '27 or this it more of an FY '28 phenomenon? Or what is the potential new industries getting connected?

We have included that when we are talking of the refinery segment, it includes the upcoming new refineries, which are likely to get connected on the eastern part of the country and also the existing refineries, which have taken slightly less during this year.

So when you said the refineries will add 1 to 2 MMSCMD, so this includes both these factors?

No, no. Number is not correct. The statement is correct. Actually, there are 2 factors. One, the volume is lost, right? And the another new -- so we said around 2 to 3 MMSCMD, not 1 to 2. When Vikash asked the question, I said around 3 MMSCMD we'll get because lost volume and the new refineries.

Got it, sir. And which are the refineries that we are looking at, sir, for the incremental volumes?

The new ones to be connected are Haldia and Bongaigaon and Guwahati.

Got it, sir. Sir, any further upside in fertilizer plants ramping up or any upside that is left? Or is it -- it's fully come out?

Fertilizer plants have already ramped up.

Understood, sir. Sir, also second question...

If we talk of the addition in -- by convection fertilizer, there are some plants which are actually doing capacity expansions. And we also understand there are proposals to put plants in maybe Maharashtra and also Chhattisgarh. So in those terms, certainly, there will be additions to the transmission volume. But in terms of existing, yes, its ramp up.

Got it, sir. Sir, also in terms of gas consumption for transmission, the system use gas consumption, the quantum and the pricing, is it still HPHT, if you could just help on that? And also on the petchem and LPG side, the quantum of gas consumption?

What is your specific question?

The system use gas consumption on transmission side. Do you think it's 1.5, 1.6 MMSCMD?

For the gas transmission segment?

Yes.

1.44 for LPG and around 5 for petrochemicals.

Sorry, sir, missed the transmission. Transmission, what number you had mentioned, sir?

1.6.

1.6. And the pricing, sir, it is at the HPHT, the 1.6 MMSCMD?

Actually, we always endeavor to get the cheapest available sourcing, one of the cheapest for -- even for this internal consumption transmission, but you for your working consider around HPHT remotely.

Understood. Sir, in terms of marketing of the total volumes that we do, broadly, what would be the back-to-back contracts that we will have? And any -- I mean, what are the quantum of spot exposure? If you can give some color on that? And also is the basis swaps that we do, to what extent it covers our portfolio currently?

So I understand the portfolio of GAIL. Let me -- for the sake of repetition. We have currently contracted volume of around 16.5 million tonnes, okay? And the -- out of 16.5 million tonne volume, 1 million tonne will start flowing from next year. That is it all. The 15.5 million tonne volume is currently flowing. Out of that, only 0.75 million tonnes or even less than 0.7 million tonne is open. Rest is back-to-back, only some of the volume, which is not back-to-back in terms of the index. One of contracts we have wherein we have the formula -- upstream formula on GCC and 9-month average and downstream, we have a formula on Brent 3 months average. So to that extent, you can say it's different, but we consider that also back-to-back because it only leaves a cash flow issue because over a period of time, 9 months and 3 months average give the same -- similar kind of cash flow. So we consider those as a back-to-back contract. If we consider those as a back-to-back contract, only 0.75 million tonne, you consider that we have open volume around 2.53 MMSCMD of Henry Hub volume, which we have -- you can consider that we have kept willfully available to us in order to take the benefit of market arbitrage sometime in domestic market and sometime in international market. So that's the only volume we have. And in terms of spot volume, spot volume, we source time to time in order to fulfill the demand of our existing contract because we contract downstream more than we have the sourcing. And in order to fulfill those demands, sometimes we source spot and also to meet the demand like power, we source spot. So that largely remains 10% to 15% or 10% the kind of spot volume we have on average basis.

This is quite helpful, sir. Just one follow-up there. So in case this 95% or 96%, 97%, where you are back-to-back contracted, if there is a difference in basis, for instance, it's an Henry Hub, whereas the end consumption is on the oil-linked basis. So we would have had a basis swap to cover it. So that's the right understanding, sir?

Let me give you, again, repeat, Henry Hub volume, only 3 MMSCMD -- 2.5 to 3 MMSCMD are only open. Remaining 18 million -- 17 million, 18 million are on back-to-back, we do not have any basis risk. Regarding 2.5 to 3, whatever volume is there, yes, we have basis risk if we supply our crude base. We have basic risk at export prices, we have differently and we sell on spot. We continue to take swaps for those volumes also, not 100% level. We continue to take swaps to be at 50% -- 45% to 50% level, depending on the portals being provided by market. That's only, only, only risk we carry.

The next question is from the line of Pratyush from InCred Equities.

I have 2 questions. First is on the transmission realization. So I just wanted to understand that do you actually get the realization and the revenues to the weighted average of the zonal tariffs? Is it the correct way to get the revenues out there from the transformation segment? Or there is some other thing also which is mentioned on PNGRB website about the integrated tariffs? So does GAIL has something to do with the integrated tariff also? Or you just do the weighted average cost and you take out the zonal tariffs and the volumes, which have been supplied in those respective zones and you get the revenue. So is it the correct way? Or again, does something you do with the integrated tariff?

We get the integrated tariff rate, but integrated tariff has also been divided into dollars. Integrated tariff rate is, say, INR 58.60 like that. But that has been divided into 3 zones, Zone 1, Zone 2, Zone 3. These are 3 different tariff rates under the same average tariff of INR 58.60. So when you talk of weighted average, it depends which zone customer exists. So if customer exists in Zone 3, we get higher.

Understood. So your integrated tariff would ultimately change if Zone 3 customer draws more gas compared to Zone 1. So it totally depends on which zone.

Yes.

Okay, sir. And my second question is regarding the customer portfolio. So you very well talked about sourcing portfolio when the marketing division of GAIL is concerned that what is the sourcing portfolio in terms of back-to-back contract Henry Hub and how do you usually reduce the risk. Just wanted to understand what is the portfolio of the customers to which you sell those gases? For example, you have a contract of 15.5 million tonne of natural gas. So -- and definitely, there would be some priority customer, there would be some nonpriority customer. Is this something that you do have some fixed kind of margin for the priority customers, some different kind of variable margins for the -- or the market-determined margin for the nonpriority customers and in that nonpriority customers or in that market-determined margins, you do have cost plus markup or inclination of something like that? So how do you -- what is your customer portfolio in terms of marketing division?

Actually, market-driven price, we market -- what is market-driven price of the imported gas? So again, in order to give more clarity to your question, out of 16.5 million tonnes, we are yet to start getting gas for 1 million tonnes. So from 15.5 million tonne, 4.8 million tonnes is almost on a fixed margin, which increases every year.

Okay. Understood. So this 4.8 million tonne -- continue, sir.

Another 3 million tonne volume, we have, again, on same margin, but I shared just before that, that contract, we have fixed margin, but there is some cash flow issues. We source on 9-month basis, and we market on 3-month basis. So whenever crude price goes down, our realization reduces for time being and our upstream payment becomes higher because 9 months average takes time to come down. Or whenever crude price goes up, we get more margins initially and then it will start reducing. So we consider them again back-to-back, but there is some averaging issue. That is 3 million tonne. It makes 7.8 million tonne. Now coming back to the remaining 5.8 million tonne from United States and also 0.75 million tonne we recently sourced from Middle East, these contracts purely are varying margin depending on the time we marketed, the kind of ability we had to get the margin. So these have varying margins depending on time when we contracted with the customer.

Okay. Understood. But the 4 million tonne, there is...

Let me give you. Over and above, we also have ability to optimize these margins because the United States volume is on FOB basis. What we do in order to reduce the cost, we do shift swaps that we call destination swap or FOB sale and DS purchase. So that also we continue to do and are able to reduce our shipping tariff that also is helpful in optimizing our profit or increasing our profit.

Understood, sir. And in that 4 million tonne, which you mentioned that you do have a fixed kind of margin, is this being sold to the priority customers where you probably usually get the margins of somewhere around INR 200 per 1,000 SCM, something like that?

No, no, no INR 200. No priority. It is when we marketed, we marketed on whosoever wanted to buy those volumes. But these are largely -- we have contracted with fertilizer customers.

But the margins are fixed by the government for the fertilizer customers?

Not by government, by the parties. And then it continue to increase 5% every year.

The next question is from the line of Nirmal from Aditya Birla Sun Life.

Just sir, you mentioned about -- that you expect 2 to 3 MMSCMD of power sector demand coming back in the next year. Just wanted to understand this in the context that the government has in March, April, recently closed some of the old gas-based power plants. And also there was a statement in August by the Chairman of Central Electricity Authority that India is planning to phase out import of natural gas for power production. So when we say that power sector demand will come back, is it -- do you expect it to come back for peak power demand usage or also for base demand, considering that LNG prices might go down significantly next year?

Let me answer first, we are not aware of what we said. We'll have to check up. We are not aware of any such kind of information. But coming back to specifics, we continue to sell around 5 to 6 MMSCMD regularly, even without a peak power demand to power sector. We have more demand for peaking. And during the period, maybe May to September, October, which is, you can say, the peaking power demand, which comes insignificant amount. There are days when we had marketed last year 20 MMSCMD kind of volume to power sector. Thirdly, now we are experiencing the power sector is also coming up with regular demand largely to balance the grid because a lot of renewal energy is coming. As you know, that renewable energy only is able to provide the power during day hours, so during nonpeak hours in order to maintain the supplies, that demand also comes. So these are 3 different regions while power sector demand is existing and continue to increase.

Due to time constraint, that was the last question. I now hand the conference over to the management for the closing comments. Over to you, sir.

Thank you very much our friends from analyst and investors community, and hope we have been able to answer to your questions. I know 1 or 2 questions we have passed for off-line discussions, and we will certainly be providing those information to you, and you can connect our Investor Relations team. Over and above, if you might have any more questions you might have missed, you wanted to -- wanted to ask more questions due to time limitations you could not have asked, we are always available to answer your questions. You can connect our MEC and IR team. Thank you very much.

Thank you. On behalf of PhillipCapital Private Limited, that concludes this conference. Thank you for joining us, and you may now disconnect your lines.