Thank you sir. We will now begin with the question and answer session. Our first question is from the line of Puneet Gulati from HSBC. Please go ahead Sir.

Thank you so much and congratulations on great numbers. My first question is on your guidance for FY2025? Why betting for lower marketing margins for FY2025 versus FY2024 or are you just being conservative?

Puneet we have shared the minimum marketing margin which we are likely to earn. For this year if I have to share, we said that we will earn at least Rs.3500 Crores So we are saying this will be minimum which we expect to earn and then based on the market situations, the arbitrage available and the optimization we are able to do, we may be better off than this, but for guidance purposes, we are considering a number of Rs.4000 Crores.

So it is fair to assume that there is a 100% probability of Rs.4000 Crores marketing margin?

Secondly, you can also talk a bit about what is driving the improvement on the petrochemical side? If it was decent improvement? What is the optimization that you are doing that you talked about in your opening statement?

Actually first when we were we were running the plant before this quarter it was suboptimal production capacity we were running. So in last quarter we were able to operate the plant at 101%. Once you operate the plant at full capacity or more than the full capacity, lot of positive things happens and one of the positive things is that specific energy consumption in terms of per MMBTU consumption for one metric tonne has gone down significantly. Second the fixed cost allocation is to a higher quantity. Third, through our portfolio because in our portfolio we have options to make available the gases which suits the Pata petrochemical project production and the viability we are able to do that. So all these factors have enabled the profitability in Q3 for Pata petrochemicals.

Lastly, if I may, if you can also talk about the opportunities on increasing your volume for marketing business? Are you sourcing new gas? What kind of gas contracts and gas pricing are you are experiencing there? What is the new volume tie up that you expect to do over there?

So our Chairman has already said on various occasions that we intend to source 7 to 8 MMTPA of additional gas for our portfolio and maybe one to two MMTPA on yearly basis. In this regard already there was an announcement that we have signed a contract for one MMTPA which is going to be available to us from calendar year 2026. We are also in advanced stage of discussions with various suppliers and very soon we may be able to inform you when we conclude these deals. So we are on the job to source the gas, so as to have broader portfolio and do more marketing.

Okay excellent. That is very helpful. Thank you so much and all the best.

Thank you. Our next question is from line of Sabri Hazarika from Emkay Global. Please go ahead.

Good afternoon Sir and congratulations on good set of numbers. So I have two questions. The first one is relating to marketing so from what we understand generally the marketing margin in APM gases something like Rs.200/MSCM which is like around $0.1 per MMBTU and in LNG it ranges somewhere around 20 cents per MMBTU, so if we do a rough cut calculation we can end up at around Rs.2000 Crores to Rs.2500 Crores kind of marketing EBITA for the year so I am just wondering that when you are like sighting Rs.4000 Crores so does it mean that any of this arbitrage opportunity. They are like more recurring in nature or do you think has there been any like material increase in gas marketing margin or anything of that sort that has happened?

Actually you are arriving at these numbers based on the sales price which includes certain fixed or some fixed kind of marketing margin. That is one part of it, but our portfolio does not include the APM gas and RLNG which we market at fixed margins. Our significant portfolio also includes wherein we have an option and opportunity where we are able to market the gas on a midterm to long term basis on a higher marketing margin than what you have estimated that is one thing, but apart from the marketing side, it is also sourcing side. I also narrated during my brief that we are able to do lot of things through which we are able to reduce our cost of gas sold like time swaps, destination swaps, a ship to ship transfers, a lot of things which we do and all these things and then taking this position in financial markets. The paper positions because we have a lot of portfolio available to us. So all these things enables us to have at least a number of Rs.4000 Crores which we have seen in last two to three years because every year when we are giving guidance we are working out these numbers like before we said Rs.3000 Crores we surpassed even the worst kind of situation. This year we said Rs.3500 Crores. We again went back to our calculation and we achieved it and then we have done it. So similarly for next years, we see that the gas marketing volumes are growing. Growth is there in the business and also we are able to take the benefit of lot of options which we are exercising because we have a lot of flexible gas at least from United States.

Right in marketing volumes will also grow by around 5% to 6% or it will be even more than that?

We expect getting volume to grow at least by 5% to 6%.

Okay and second question is relating to your transmission business so the KG basin tariff order just came sometime back and they have like increased the gas cost, gas pricing assumption in the quarter? I think they have taken some long term average of HPHT and also? This is the final or do you think there could be further upside to the gas cost assumption?

I understand you are talking of KG basin tariff, is that right.

I think you go back to the tariff order. There is no implication of any gas assumption in KG basin tariff because there is no compressor station. There is no fuel consumption in KG basin tariff so that has no link with the tariff of HBJ which is part of the unified tariff where compressor fuel is being used. That is a separate issue.

I am talking about the gas price?

Gas price, how will it impact in tariff unless it is used as a compressor fuel or transmission loss. Only these two things happen.

Okay got it. Got it, Sir. Thank you so much. So it is under review only and will come separately for you?

Right.

Thank you so much and all the best.

Thank you. Our next question is from line of Maulik Patel from Equirus. Please go ahead.

Thanks for the opportunity. Sir a few questions. Sir now you do not have any of this APM gas for your gas transmission business so is this on normalized cost on transmission segment?

If I understood you, you are telling there is no gas allocation and at what cost we are booking is that right.

Yes?

So since there is no gas allocation we are sourcing the gas for our compressor fuel. We are trying to source the gas from domestic sources to the extent it is available or else we use the RNLG for our compressor fuels which is at prevalent market size.

You are using around 1.7 MMSCMD of gas for the compressor business right approximately?

Right.

Right. Export LNG or the gas available out of our portfolio.

Okay and Sir when do you expect that order to come now because earlier the assumption was that within a year the regulator will revisit the assumption what they made into this integrated tariff happened at ~$3.5 when do you expect that to have it again?

Actually we are following with PNGRB and we expect them to take a decision soon, but we understand that there is issue of member legal there. Probably that is delaying that process.

Got it. Sir last questions, this is on the on the petchem side? Now you have turned into that again profitability and this quarter the spot LNG prices are again lower than the previous quarter? Is this fair to assume that your profitability will substantially improve in this quarter and Sir any update on that the acquisitions what we have done a couple of quarters back that Rs.2000 Crores which we are supposed to spend when do we plan to start operation in that?

Yes. So it is fair to assume that profitability for petrochemical project or plant where Pata with certainly improve as compared to Q3 and we expect it to be the level of PBT or rather we will be at breakeven level for Pata petrochemicals on yearly basis. Second question is with respect to the plant which we have recently acquired that is erstwhile JBF Petrochemicals. We expect that plant to be commissioned by March 2025.

Okay and so will this be around about Rs.2000 Crores in that right?

We have acquired that through NCLT process at approximate Rs.2100 Crores and then we are expected to incur around Rs.2000 Crores to bring it to the commissioning level.

Sir the PDH plant will also commission around that time only next year?

Yes PDH will be commissioned mechanically by April FY2025.

FY2025 so commercial will be take another six more months to complete it?

Maybe three months.

Okay great Sir. Thank you. Thank you very much.

Thanks for taking my question Sir. So couple of questions firstly on your volumes? Now this 121 volume that we are seeing, could you just remind us how much of this is outside the main pipeline which is the, the unified pipeline how much of this is outside that like the Kochi, Mangaluru and I think?

Maybe 10% of the volume is out of the unified network. KKMBPL and KG Basin is the large volume. Rest are very, very minimal. So KG Basin maybe around four to five again this four to five is KG Basin, so 9 to 10 million volume. 8 to 9 and then another Agartala region which are small networks which are not part of this unified tariffs.

No because what I am asking is that if the kind of growth that we are talking about, if we are at about 110 or so, we get another 8 to 9 MMSCMD of growth, then we would be already at 75% utilization right for the main network so in that case incremental volume increase could also lead to tariff adjustments or how does that work?

Vikas you know the tariff regulation. At least we do not expect for few years that incremental volume will lead to reduction in our revenues because regulations are such that any under recovery of past years, we have a right to recover from any over transmission in coming years. So there will be years when we have under recovery. In past we had years so those under recovery will be first offsetting from over supplies if whenever it happens so there is no question even if we reach 75% level that we need to pass on.

Okay that is useful clarification and the other thing was this opex that we see for this for gas transmission segment that has gone up significantly so this is because all of this quarter the complete allocation has gone or there was part of it that was around?

This quarter Vikas the allocation has totally gone now in two stages. One I think in October 1st and second is December 16th. So with effect from December 16, we do not have any allocation of APM gas for use in compression fuel.

So that is December 16 th so next quarter if anything opex will be even higher because why I am asking that Sir is we are right now, I mean last year there was this thing about the opex being one off because there was much higher price for LNG $40 spot LNG that you had to use and all of that but even now that I see most likely next quarter opex from gas transmission will be at a much higher level because you said that December 16 when it the full effect will be in January to March, is that?

So 0.2 of a base of 1.7, right?

Right.

So 1.5 say 1.7 so that is what that just so about 10% to 15% kind of an adjustment.

Yes.

And any reason why LPG realizations look a little low? Any reason you can think of that you can because this appears to be a little bit of a discount to what I thought was the market price?

Can you come back again Vikas?

LPG segment realization any reason why they appear to be a bit low or you do not have any specific reason you can think of?

No we do not have because it is all market driven, import parity price and we do not have any control over it. So there is no specific reason international prices are in that range.

Okay and finally where do you see, so when you say this 12 MMSCMD growth that in your opinion is more you are talking because I think you said over the next three years average of 10 to 12 MMSCMD growth is what you see so that is more like we should be thinking of more from a perspective of CAGR rather than specifically next year 10 to 12 MMSCMD coming is that how you think about it?

Yes let me tell you. Currently there is a disruption in supplies from one of pipeline Dadri to Panipat supply, right. So we expect that three MMSCMD volume at least to come back. Increase in offtake. Every year there is a growth in CGD by 12% to 13% even if you take roughly 70% of our market share three MMSCMD will come from there. IOCL Barauni we expect to come 0.5 and the general increase. So we have the bigger data from where this 10 to 12 will be available. I have given only two to three to you.

Why I say that Sir, because 10% increase when you are increasing 10%, Indian gas demand is also rising effectively close to that. That is something that we have not seen for many, many years and there have been?

Which is of a low base? A lot of those prices sensitive?

I agree with you.

Sir the very high prices of last year due to the spot LNG prices being?

Right but we expect that is possible.

Thank you so much Sir. Thanks a lot.

Thank you. Our next question is from line of Vivekanand Subbaraman from Ambit Pvt Limited. Please go ahead.

Thank you for the opportunity. I have two questions. The first one is on Petchem business? Sir, are you able to share the price of gas, the input gas that you sourced in 3Q and what is the assumption that you have made for FY2025 as far as the guidance on full year profitability is concerned? The second thing, could you help us understand the status of the volumes that were under dispute, the shortfall that you had from the Gazprom trading entity and is there any compensation you received there and resolution plan there? Thank you.

We expect that firstly, it is not the input gas based on which we can assume that Pata will be profitable on yearly basis. It is a function of both the sales price and also the input gas cost. So if you were to ask me at based on current level of pricing $8 to $9 is a very good price input gas cost for Pata Petrochemical and we are able to source and supply at that level to Pata Petrochemicals. Second assumption is that the pricing levels of petrochemical were low even in this quarter as compared to Q2. Even if you maintain the price level of Q2, which were higher by Rs.8000 per metric tonne, we will be at a good profitable level in Q4 and also the next financial year.

Okay so just to clarify at $8 per…

Not $8, it is $8 to $9 because it is always varying.

At current spreads $8 to $9 will be the breakeven point in FY2025 is that?

Sorry I am unable to understand. You said that your petchem business will break even in FY2025? My question was at what input gas price that you are assuming for this break here?

I never said that our FY2025 we will break even. I said we will be in profit in next financial year first thing. I said that in order to have the profitability we need a function of two things. One is the selling price and second is the input gas cost. We are able to source and supply to Pata Petrochemicals around $8 to $9, sometime $9 to $9.5 and sometime 8.5 and what I also said that during this quarter our petrochemical prices were low. Even if you compare by Q2 by Rs.8000 per metric tonne, so even if we maintain those prices of Q2 level, we expect those prices to be available and if we are able to supply at $8 to $9, we will be not breakeven, we will be in a reasonable profitability for Pata Petrochemical.

Understood very clear. My other question is unanswered.

What is that?

That is on the on the gas what is the legal resolution there till now and also on the marketing side?

Compensation sorry I missed that. So that case is sub judice I cannot say anything on that.

Okay and is there any assumption that you have made with respect to any resolution in the guidance given for FY2025 on the marketing side?

Any?

Any resolution and what about the cargoes are we getting it now?

Anything which are contingent we have not considered.

Okay and lastly, are you getting cargos now from the new entity?

Yes.

Okay but no shortfall is being met, right? The cargoes that were not available?

Shortfall is not yet supplied by them.

Thank you. Our next question is from line of Mayank from Morgan Stanley. Please go ahead.

Sir this is Mayank. A couple of questions. On the capex side first, can you just talk us through in terms of your full year capex for FY2025 and how much of that will be incrementally now spent on the petchem front and secondly, if you can just talk about a bit around the long term sourcing contracts, obviously you signed one but how does that kind of impact the overall spreads that you were talking about on the marketing side? Thank you.

The new contracts you are talking about how it will impact.

Yes, so when does that impact kick in, in terms of earnings for you I think FY2026 or onwards or does it?

The supplies are to start from 2026 onwards, so therefore those impact will only come from 2026 onwards.

But Sir will there be back-to-back contracts as well or you think there will be kind of like we have seen over the last five to seven years some of that could be?

Actually the back-to-back era is over. Though it is always good for you to have a sustainable kind of thing and we also wish to have that. We will try to do that but nowadays you have a lot of opportunities available. It depends what kind of prices you are sourced and what kind of market it is there. There are a lot of markets here so we expect because we have a good price under that contract, we expect to have not back-to-back. We expect to have more than what marketing margin we are earning today.

So Sir just out of curiosity in terms of the volumes that you are thinking on a portfolio basis now like in five years time or so, what percentage could look like on back-to-back and what percentage you will take exposure on your balance sheet?

So it is difficult as on date because of the supplies are to start from 2026. I can share about current portfolios but since it is too far from today, we will start marketing for those contracts now because we have recently signed the contract. So now we will go to the market. We want those contracts to be signed on back-to-back basis with a good margin. Now when we go to the market then only we will be able to know what kind exposure we will be carrying but there will not be any exposure because that is at a very good price we have entered into those contracts.

Got it.

With respect to your question on capex FY2024-FY2025, we target to incur Rs.17,000 Crores of capex.

Yes so Sir, can you just help us give us a bit of a that break up because the numbers are a bit high?

Around Rs.3000 Crores on pipeline projects, Rs.4400 Crores of petrochemicals and around Rs.3000 Crores we target to incur on net zero, around Rs.750 Crores on operational capex and around Rs.5000 Crores equity contributions to JVs and subsidiaries.

And Sir this Petchem capex will be largely driven on the PDH plants as well as the PTA plant? There are no shutdowns or anything for the Pata plant for fiscal year?

Largely on Usar, whatever capex we will incur for PTA we will be forming part of equity contribution to JV subsidiaries.

Okay clear and Sir no major shutdowns or anything planned for FY2025 on Pata correct?

Now we are not expecting anything like major shutdown. Any routine shutdown may happen but not as of now we have not envisaged.

Got it. Thank you.

Thank you. Our next question is from line of Manikantha Garre from Franklin Templeton India. Please go ahead.

Thank you providing me the opportunity Sir. I have a couple of questions. One is on the 1 million tonne LNG contract which you have with Vitol recently? Vitol is a commodity trader and this deal is probably different from other deals, any other or any LNG of take in India including you has taken so far? Is there any difference in dealing with the commodity trader versus dealing directly with the ENP Company in terms of probably slow path, destination, flexibility or any other terms because of which you are dealing with the commodity trader now? That is my first question.

Yes, good afternoon. This is Kaviraj. I am heading LNG Group. To come to your question. We do not see there will be any difference between an offtake tie up done with directly a producer and the trader or for that matter portfolio okay but different players come with different plus and minus okay. In this case, we got a couple of good flexibilities which we thought would be very much useful in our LNG portfolio. So we went ahead. Nothing significant different from other suppliers.

So can we expect that the slope here also would be more or less in line with what we are doing directly with the producers or there would be any difference there?

I do not want to say anything on this, but definitely the slope is very competitive. I do not want to give a judgmental qualification saying that it is better than producer or vice versa. All I can say is it will be very competitive.

Got it. My second question is more of a follow up to what Sabri was asking earlier on gas marketing side? Sir has mentioned that time swaps and destinations swaps and ship to ship transfers were probably the key reasons for the raise in guidance in gas marketing business and continuous outperformance than what we were expecting but if I have to go back maybe four or five years back also we were doing all of this then also, right? So what is the key change that has happened in these swaps or ship to ship transfers, that has happened over this period if you can throw a bit more color on that and also if you can along with that provide how much percentage or how much of marketing volumes were on swaps on quarterly run rate basis in FY2024 for example versus let us say three years back in FY2020?

Actually one significant difference what you are asking five years back and today is that largely we were marketing our volume in overseas market because the demand was not to the current level. Now the demand in the domestic market is there and we are able to consume all our sourcing from international market in domestic market. So, when we were doing those swaps largely to mitigate our volume risks not to optimize the cost. That was one factor which is different. Five years back the demand as compared to today was less is that Kaviraj.

Yes just to add, as our Director (Finance) rightly said in the past, we did swap for a different objective okay but currently we are doing swap as part of our LNG portfolio operations meaning thereby the swap which you do is on a case to case basis. Earlier we used to do a swap for let us say one year or two years, something like that. But today perhaps almost every alternate cargo we try to create value by doing a swap and that is the reason there is a spike in this value. Am I able to answer this?

Yes Sir just an extension to that? Sir has started off with saying that we have transferred more volumes to India versus selling more of them earlier in international market, right so do we have to take it that we are able to earn more margins on this India sold volumes relatively than what we were getting earlier when we were selling them on international markets?

Yes obviously.

I said during my speech that the marketing margin is not only a function of what price you are marketing. It is also function of what gas cost, cost of gas sold you are able to arrive at. So when we did optimization, we were able to reduce our cost of gas sold significantly. So when one of the analysts were asking that you have fixed kind of marketing margin, we are not able to arrive at so they are working out from top line. I am telling we are able to reduce our cost. So both things have played role not only the gas price at which we market it and at what cost of gas sold, we are able to have our costings so those two things are working and that is how we are able to have good marketing margin and we will continue to do so.

Understand, Sir. If I can just squeeze in one last question related to this only, how many trading hubs have you created currently globally from the gas marketing division?

We have only one in Singapore.

Okay so apart from India, there is only one in Singapore? Nothing in the US or European markets?

No US they handle the operation of the LNG contracts. That involves trading of gas, upstream gas whenever we face some operational difficulties. So in true sense it is not a trading hub.

Understand. Thank you so much for answering my questions.

Thank you. Our next question is from line of Amarnath from Ministry Of Finance Of Oman. Please go ahead.

My first question was with respect to this value unlocking activities which the management and the board was thinking whether with respect to CGD or with respect to merger or reverse merger with your petrochemical side any update you can give on this regard at the moment?

Actually we have not come out with any such kind of value creations through disinvestment of CGD or petrochemical. Yes, we are internally evaluating and we will take this call at an appropriate time. But till now we have not concluded what we will do about these investments in CGD and there is no thought about petrochemicals.

One thing I am just trying to understand now every year the capital expenditure towards this petro chem side is keep on increasing while the uncertainty relating to that business compared to our main business of gas transmission and marketing is quite high? As you correctly said, the output price is not in our control? The only thing we can do something with respect to our input price so what is the rationale behind so much of expansion towards the pricking side of the business and increasing the overall uncertainty business again?

The first thing is that Indian demand of petrochemical side is lowest if we compare with the world average per capita consumption and even if we compare with the developed countries like China significantly lower. So let us talk first, there is a demand. Second with respect to uncertainty in terms of realization, the current investment which we are doing in Usar is on PDH PP, the input for which is propane and the output polypropylene is directly having correlation with propane price. So we expect to earn a certain delta of margins between input and output price. So our investment is quite conscious based on long term analysis of input and output price and like we currently have some time uncertainty about the Pata petrochemical and we will have consistent profit in the new investment which we are making for PDH PP.

Sir just to interrupt see making the profit is not all the thing. It is the allocation of the capital and the return on capital employed? Now you can help us to understand compared to the capital allocation towards your main business and compared to that to the petrochemical business, how much return on capital do you earn from that business of the Petchem so far on an average?

Actually we are there to invest and currently we have been able to win all the authorizations of pipeline which PNGRB we comes out, we are not in a position to decide and lay the pipeline. We certainly can look for any opportunity for investment in pipeline projects but at least that should be available. Currently there is no opportunity available and we are the only entity in last few years who have through PNGRB won all the authorizations. We were rather sometimes single entity to bid and got the authorization. So we are there to invest in our core business that is laying, building, and operating the natural gas pipeline but at the same time, if you find there are opportunities for investment in other business segments which we continue to do because ultimately we have to find growth and if we find that growth in some of the businesses is sustainable so that is how we decide and allocate our capital.

Yes, I understood but that capital allocation towards your Petchem which apparently has much lower ROCE is taking your entire companies ROCE quite drastically down? That is the point I just wanted to say?

Your experience is part of Pata petrochemicals that is how based on the availability of project at Usar which is on a different field. So in order to not to have the uncertainty, we have gone for propane dehydrogenation not gas based plant.

Any idea about this hydrogen plant related investment where we are and also what is your reason with respect to the expansion to that side of the business? Though it is at the very infancy stage relating to hydrogen, but last call I have understood from you that you guys are thinking kind of in diversifications towards this non gas?

So regarding your question of hydrogen, we are only putting up a pilot project at one of the unit and then you ask why because energy transition is taking place and whether we like it or not the energy transition will happen. So in order to be future ready, so we are as a pilot project we are putting one of the hydrogen plant at one of the units.

Yes okay thank you Sir.

Thank you. Ladies and gentlemen, that was the last question for the day. I now hand the conference over to Mr. Probal Sen for closing comments.

Thank you very much. I would like to thank everyone for sparing their valuable time to attend the call and thank you so much to the management for taking the time to give such detailed answers to all of the queries that have been put. Appreciate that. We can end the call now. Have a very nice day. Thank you.

Thank you. On behalf of ICICI Securities that concludes this conference. Thank you for joining us and you may now disconnect your lines.