Gail (India) Ltd (GAIL) Q2FY27 Concall Transcript - Sep-2026 Qtr
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Moderator: Ladies and gentlemen, good day, and welcome to Gail India Limited Q2 FY '27 Earnings Conference Call hosted by PhillipCapital. As a reminder, all participant lines will be in the listen-only mode, and there will be an opportunity for you to ask questions after the presentation concludes. Should you need assistance during the conference call, please signal an operator by pressing star, then zero on your touch-tone phone. Please note that this conference is being recorded. I would now hand the conference over to Mr. Nitin Tiwari from PhillipCapital. Thank you, and over to you, sir.
Nitin Tiwari (PhillipCapital): Thank you, Muskaan. Good day, ladies and gentlemen. Best wishes in advance for upcoming festive season. On behalf of PhillipCapital India Limited, I welcome everyone to GAIL India Limited's second quarter FY '27 earnings call. Today, we have the pleasure of having with us, the senior management of GAIL, led by Director Finance, Shri S.K. Sinha. I will now hand over the floor to the management for their opening remarks, which shall be followed by a question-and-answer session. Over to you, sir.
S.K. Sinha (Gail (India) Ltd): Thank you, Nitin. Good evening, everyone. It is always a pleasure to talk to the investors and analysts, and we are deeply thankful for your continued trust and engagement with GAIL.
S.K. Sinha (Gail (India) Ltd): Company has declared its result for the Q2 FY 26-27 today which you must have seen by now. I will talk about highlights, business overview, outlook, status of capital expenditure, and then we will take your question. I will start with key business highlights for the quarter. Number one, GAIL won prestigious awards PNGRB Excellence in the category of gas transporter of the year and health and safety. GAIL recorded is the highest ever natural gas transmission of around 148 MMSCMD on 21st September '26. Quarter two of FY 26-27 was another quarter of robust and resilient performance, even as a challenging times continue. The West Asia crisis has now gone on for over 8 months, and the company's volume from the Middle East remained disturbed. This was partly offsetted through portfolio flexibility and spot sourcing. GAIL's diversified portfolio again proved to be a key strength in navigating the quarter effectively. Gas price continued to be volatile and quite high. It is around $30 to $32 per MMBTU. Throughout this crisis, our teams have been resilient and agile and have kept the wheels in motion. Even as the times remained challenging, as a company, our prime focus has been to meet our customers' requirement so that they are not left dry run. Our trading arm in Singapore, GSPL, supported GAIL in the sourcing spot volume from time to time, and we could prioritize supply to our customers. The company continued to focus on operational efficiency and on creating sustainable value for our stakeholders. PBT and PAT during the quarter stood at 5,838 crores and 4,650 crores, respectively, almost in line with the previous quarter. For half-year, this financial year, PBT and PAT stood at 11,611 crores and 8,943 crores, respectively, which is a growth of more than 116% as compared to the H1 of the previous financial year. Moving to the segment wise, let's starting from the natural gas transmission. Natural gas transmission volume for Q2 FY '27 stood at 130.10 MMSCMD, as against 122.36 MMSCMD in the previous quarter, an increase of about 6.3%, in line with the recovery in the gas consumption in the country. During the quarter, we also recorded our highest ever transmission volume of 147.55 MMSCMD on 21st September '26. Overall natural gas transmission volume for H1 FY '27 stood at 126.25 MMSCMD. We expect that the natural gas transmission volume for FY 26-27 should be around 126-127 MMSCMD in the prevailing circumstances. Moving to the gas marketing, GAIL sourced 18 spot cargo during the Q2 FY '27, as against eight cargo during FY-- during Q1 FY '27. All the cargo were sourced through the GSPL. Our gas marketing volume for Q2 FY '27 stood at 97.23 MMSCMD
S.K. Sinha (Gail (India) Ltd): at PBT level. For FY '26-'27, the range assumed continued Brent volatility and accounts for the disturbed long-term supply during the year. Moving to the polymer business, polymer production during the quarter stood at 204 TMT as against 51 TMT in Q1 FY '27. And due to the scale of operations, the segment remained around break-even level during the quarter, and is expected to be at the same level during FY '27. Moving to the LHC and LPG transmission, in the LPG transmission segment volume improved by 5% and stood at 1,130 TMT as against 1,077 TMT in Q1 FY '27, primarily due to improvement in volume from flow in VSPL. Overall, capacity utilization stood at around 98% for the quarter. In the LHC segment production increased by 10% to 256 TMT from 232 TMT in Q1 FY '27. In view of ongoing crisis, we restarted operation at our Gandhar plant and LHC production of 32 TMT was achieved during Q2 FY '26-'27. The LHC segment generated a PBT of Rs. 442 crores during Q2 FY '27 as against Rs. 772 crores in Q1 FY '27, primarily on account of lower price realization by Rs. 18,000 per metric ton. Moving to the CGD and GAIL Gas business, we have already received PNGRB nod for transfer of GAIL six GAs to the GAIL Gas to have a retail focus approach. Thereafter, GAIL Gas Limited will be listed for which necessary action is underway. These six CGD have 219 CNG stations and around 3 lakh billed DPNG connections. GAIL Gas, which currently operates 16 GAs directly and 9 GAs through its JV, has a network of 593 CNG stations, over 8 lakh DPNG connections. Quarterly profit of GAIL Gas increased by around 50%. GAIL Gas marketed around 7 MMSCMD volume during H1 '26-'27. Moving to the ongoing projects and capex, during Q2 FY '27 GAIL incurred a capital outlay of Rs. 1,425 crores. For H1 FY '27, the cumulative capex stood at Rs. 7,600 crores. Around Rs. 12,900 crores is expected to be incurred toward the capex during the current financial year. These sustained investments underscore our commitment to strengthen gas infrastructure, enhancing downstream capabilities, advancing clean energy projects, and supporting India's long-term energy transition and energy security objectives. Moving to the segment-wise capex program, pipeline projects, JHBDPL, remaining section, KKBPL Phase-2, Gurdaspur-Jammu pipeline and C2-C3 pipeline are scheduled for completion in the current financial year. Vijaipur-Bina pipeline, DUPL-DPPL capacity augmentation are scheduled for completion in the next financial year. JLPL LPG pipeline capacity augmented augmentation is scheduled to be completed in FY '28-'29. Petrochemicals projects, the 1,250 KTPA PTA plant at GMPL is in the advanced stage of commissioning and should commence commercial production very shortly. The 500 KTA PDH PP plant is is scheduled to be commissioned during the next financial year. CBG Gobardhan scheme, the company has one operational CBG plant at Ranchi and others are under construction. Company has registered 10 CBG plants on Gobardhan portal, including one operational, six under construction, and three under approval. It is expected to receive capital assistance of around Rs. 100 crores for five under construction CBG plants under the Gobardhan scheme. Konkan LNG Limited, the company expects the ambient heating system to be partly commissioned by March '27 and to be fully completed by September '27.
S.K. Sinha (Gail (India) Ltd): post which full 5 MMTPA can be utilized for full year and around 80 cargoes can be served annually. Moving to the renewal segments, GAIL remains committed to achieve Net Zero target by year 2035 for Scope 1 and Scope 2 emissions. We have 155 MW of renewable energy portfolio, which includes 118 MW wind and rest is solar. Additional 908 MW renewable power capacity is under construction, along with 572 MW of the Battery Energy Storage System. With completion of these projects, GAIL have will have a renewal energy portfolio of around 1 GW. That's concludes my overview of the quarterly performance, segment outlook, and key projects. Over to you, Nidhi.
Moderator: Thank you very much. We will now begin the question-and-answer session. Anyone who wishes to ask a question may press star and one on their touchtone telephone. If you wish to remove yourself from question queue, you may press star and two. 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 Probal Sen from ICICI Securities. Please go ahead.
Probal Sen (ICICI Securities): Hi, sir. Very good afternoon, sir, and many congratulations for a very strong set of numbers. Just wanted to understand your thoughts on where this strong gas demand is coming from in the sense that despite the kind of strength we have seen in LNG pricing, you know, in Europe, I mean if you can just give us some sense of which segments, consuming segments are actually seeing traction. And is it And is it more a function of organic demand or also a continued switchover from other alternate liquid fuels, which have also obviously seen price increases over the last three or four months? Just your thoughts on this, that was my first question.
S.K. Sinha (Gail (India) Ltd): Thank you, Probal ji. As you know, we have major five segments where gas consumption is happening. Number one, fertilizer; second, power; third, CGD; fourth, industries; and fifth, other other consumers. So, during the Q2, power sector and fertilizer sector where consumed more gas as compared to the previous quarters. So, power sector consumed power consumption of power sector has increased from 10% to 12% during the Q2 FY '25. Similarly, the fertilizer sector also, gas consumption has increased from 32% to 33%.
Probal Sen (ICICI Securities): Okay. And and this this percentage increase is versus Q1 or on a YoY level, sir?
S.K. Sinha (Gail (India) Ltd): Q2. Q2 versus Q1. Q2 versus Q1.
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