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Edited Transcript of GAIL.NSE earnings conference call or presentation 9-Aug-19 11:30am GMT

Q1 2020 GAIL (India) Ltd Earnings Call

New Delhi Aug 22, 2019 (Thomson StreetEvents) -- Edited Transcript of GAIL (India) Ltd earnings conference call or presentation Friday, August 9, 2019 at 11:30:00am GMT

TEXT version of Transcript

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Corporate Participants

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* Anjani Kumar Tiwari

GAIL (India) Limited - Director of Finance, CFO & Director

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Conference Call Participants

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* Akshay Mane

Centrum Broking Limited, Research Division - Associate of Oil & Gas

* Amit Rustagi

UBS Investment Bank, Research Division - Analyst

* Amit Shah

BNP Paribas, Research Division - Analyst

* Bhavin Gandhi

Batlivala & Karani Securities India Pvt. Ltd., Research Division - Research Analyst

* Gagan K. Dixit

Elara Securities (India) Private Limited, Research Division - Analyst

* Manisha Porwal;Taurus Mutual Fund;Analyst

* Nilesh Ghuge

HDFC Securities Limited, Research Division - Research Analyst

* Nitin Tiwari

Antique Stockbroking Ltd., Research Division - Research Analyst

* Pinakin M. Parekh

JP Morgan Chase & Co, Research Division - Associate

* Probal Sen

Centrum Broking Limited, Research Division - Analyst of Oil and Gas

* Rohit Ahuja

BOB Capital Markets Limited, Research Division - Analyst

* Sabri Hazarika

Emkay Global Financial Services Ltd., Research Division - Senior Research Analyst

* Sanjay Mookim

BofA Merrill Lynch, Research Division - Director and India Equity Strategist

* Sujit Lodha

Aditya Birla Sun Life Insurance Company Limited - Research Analyst

* Vidyadhar Ginde

ICICI Securities Limited, Research Division - Oil and Gas Analyst

* Vishnu Kumar A.S.

Spark Capital Advisors (India) Private Limited, Research Division - VP

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Presentation

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Operator [1]

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Ladies and gentlemen, good day, and welcome to GAIL (India) Q1 FY '20 Earnings Conference Call hosted by HDFC Securities Limited. (Operator Instructions) Please note that this conference is being recorded.

I now hand the conference over to Mr. Nilesh Ghuge from HDFC Securities. Thank you and over to you, sir.

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Nilesh Ghuge, HDFC Securities Limited, Research Division - Research Analyst [2]

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Thank you, Aman. Good evening, everyone, and welcome to Q1 FY '20 Earnings Call of GAIL. We have the management of GAIL represented by Mr. A.K. Tiwari, Director, Finance; and other senior executives. I now hand over to the management for their initial comments. Over to you, sir.

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Anjani Kumar Tiwari, GAIL (India) Limited - Director of Finance, CFO & Director [3]

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Good evening. And it is, I'm A.K. Tiwari, DF, from GAIL. I would like to share some of the brief highlights and then we'll discuss on the questions which are there from the investors.

So again, good evening to all. The physical and financial performance of the quarter ended June '19 are already with you. And the same has been -- also been made available on the GAIL website. I presume that all of you have gone through the same. However, for the benefit of audience, let me reiterate the following few highlights for Q1 FY '20.

I would like to first share the physical highlights, then the financial highlights. The gas marketing volume has decreased by 1.87 MMSCMD, mainly due to decrease in the domestic gas sales, which is 4.14 MMSCMD and increase in the RLNG sales by 2.27 MMSCMD.

There have been major shutdown at the customers and mainly fertilizers like CFCL, IFFCO Aonla, Phulpur, NFL, NFL Bathinda, KRIBHCO, which has impacted the supply as well as the gas market in themselves.

Overall transmission volume has decreased by 3.74 MMSCMD, mainly due to above reasons for major shutdown at the customers' end. The capacity utilization of NG Pipeline has been 51% in comparison to the 53%, which was in Q4 FY '19. And the polymer production has further decreased by 68 TMT in comparison with the Q4, mainly due to shutdown for preventive maintenance and gas regeneration job. But I would like to mention here that post shutdown, the plant is running fine. And we have made record production of 78 TMT in the month of July 2019, which is the highest.

The LHC production has decreased by 36 TMT due to shutdown at Pata, Vaghodia, Gandhar and C2-C3 plant at Vijaipur. There is decrease in LPG transmission volume by 196 TMT, mainly due to shutdown at HPCL [carbon], at DHPL and capacity augmentation job at JHPL.

Now I would like to highlight the financial highlights for FY '20. The gross sales for Q1 FY '20 is INR 18,276 crores versus INR 18,707 crores, decreased by 2%, mainly due to decrease in the Petchem sale by 77 TMT, rupee appreciation, decrease in LHC sales, et cetera.

However, the PBT for Q1 FY '20 is INR 1,981 crores versus INR 1,740 crores in Q4 FY '19, which is increase of around 14%. The PAT for Q1 FY '20 is INR 1,288 crores versus INR 1,122 crores in Q4 FY '19, which has increase of 15%.

Now the increase in the profitability are mainly due to profit in Gas Marketing segment has increased by INR 258 crores. I think the segmental profit and PBT is already available with you. In the Gas Marketing segment, INR 258 crores due to better realization on tradable volume. And the profit in NG transmission has increased by INR 90 crores, mainly due to increase in the weighted average tariff realization.

The loss in Petchem segment has increased by INR 202 crores, mainly due to decrease in the petrochemical production, sales quantity, increase in the weighted average cost of input, which is partly offset by a decrease in the chemical consumption, repair and maintenance, et cetera.

The profit in LHC segment has increased by INR 95 crores, mainly due to increase in the average LHC price realization, which is 5,200 metric tonne in comparison with the last quarter. The profit in LPG transmission segment has decreased by INR 33 crores, mainly due to decrease in the LPG transmission quantity. And the profit in the other segments has increased by INR 61 crores, mainly due to increase in the E&P revenue, increase in the wind power revenue, et cetera.

The CapEx during the quarter is INR 877 crores, mainly due to -- on account of the pipelines. I would like to share that the tariff revision order for HVJ, HVJ upgrades, Mumbai region, KG basin has been ordered, which are effective from 1st July, 2019. And the commissioning at the KKBMPL Kochi-Koottanad pipeline is already on there, so commissioning is going on in a phased manner. The Urja Ganga project is also as per our schedule, and we have reached up to Dhobi, Patna. Gas has been charged in all the CGDs there like Varanasi, Patna, Cuttack and Bhubaneswar. We have already started our CGD sales, PNG, CNG. So these are the few highlights, which I wanted to share with you. Now I'll request for any questions you have with the participants. Thank you very much.

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Questions and Answers

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Operator [1]

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(Operator Instructions) The first question is from the line of Rohit Ahuja from BOB Capital Markets.

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Rohit Ahuja, BOB Capital Markets Limited, Research Division - Analyst [2]

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Three, four questions. First on tariff, sir. The tariffs that we got for HVJ and some pipelines were far lower than what we had initially submitted. Can you clarify, are we contesting this tariff in the appellate?

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Anjani Kumar Tiwari, GAIL (India) Limited - Director of Finance, CFO & Director [3]

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No, we are not contesting the tariff.

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Rohit Ahuja, BOB Capital Markets Limited, Research Division - Analyst [4]

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Okay. So any particular reason why? And what is the effect on the overall tariff from 1st July? Are we seeing an increase or it's going to be flattish?

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Anjani Kumar Tiwari, GAIL (India) Limited - Director of Finance, CFO & Director [5]

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It will be almost neutral. And we are not contesting. And whatever the data and details we have submitted the PNGRB, it will be a healthy part of the tariff for HVJ. So this is okay from our side.

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Rohit Ahuja, BOB Capital Markets Limited, Research Division - Analyst [6]

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Okay. Sir secondly, from Petronet LNG, we got the data that their incremental capacity of 2.5 at Dahej is operating at close to 100%. So that's roughly about 10 MMSCMD increase. So do we see those volumes entering our pipeline network and what sort of quantum can we expect from that?

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Anjani Kumar Tiwari, GAIL (India) Limited - Director of Finance, CFO & Director [7]

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You see, their capacity which has been augmented from 15 to 17.5 MMTPA. So we have long-term tie-up and wherever we have long-term tie-up as well, wherever we are having the LNG, we will process there itself as well as the other LNG terminals wherever required. So that capacity, they have augmented. We will utilize wherever the opportunity comes.

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Rohit Ahuja, BOB Capital Markets Limited, Research Division - Analyst [8]

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So apparently, usually traditionally you have seen about 70% to 80% of Petronet's overall volume flow resulted through pipelines. Can

(technical difficulty)

same to be maintained?

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Anjani Kumar Tiwari, GAIL (India) Limited - Director of Finance, CFO & Director [9]

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Yes, that is, yes. [Sanjay], you want to -- I think roughly.

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Unidentified Company Representative, [10]

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The additional volume that is coming from Petronet is about 9 million cubic meter per day. And the quantity that we have booked -- we are getting that quantity. We are getting whatever is there and our ratios are maintained. In fact, the ratio that GAIL is getting gas in last quarter is actually more than what it used to be earlier.

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Rohit Ahuja, BOB Capital Markets Limited, Research Division - Analyst [11]

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So that's interesting, sir. Sir thirdly, on the marketing business earnings, we saw a very good level of earnings, around INR 860 crores earnings from there.

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Anjani Kumar Tiwari, GAIL (India) Limited - Director of Finance, CFO & Director [12]

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Yes, please.

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Rohit Ahuja, BOB Capital Markets Limited, Research Division - Analyst [13]

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That is driven mostly from low spot LNG prices that has got you such a good margin?

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Anjani Kumar Tiwari, GAIL (India) Limited - Director of Finance, CFO & Director [14]

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No, no, it is mix of that, some of the hedging we have done on the long-term contracts. It is basically the difference between the purchase price and sales price. So wherever required, we have hedged and the better margin, we have got it from the HH volume, which we have traded and the difference between the -- this Brent price as well as the HH price which are there. So that is the combination of that.

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Operator [15]

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(Operator Instructions) The next question is from the line of Bhavin Gandhi from B&K Securities.

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Bhavin Gandhi, Batlivala & Karani Securities India Pvt. Ltd., Research Division - Research Analyst [16]

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Sir, can we have the split of the gas trading volumes as to how much was U.S. LNG, how much was medium and short-term contracts and domestic gas?

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Anjani Kumar Tiwari, GAIL (India) Limited - Director of Finance, CFO & Director [17]

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Mix of the total LNG contracts you are talking about?

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Bhavin Gandhi, Batlivala & Karani Securities India Pvt. Ltd., Research Division - Research Analyst [18]

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No, no, the gas trading volumes, 97 MMSCMD. Can we have the split?

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Anjani Kumar Tiwari, GAIL (India) Limited - Director of Finance, CFO & Director [19]

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Yes. We have -- this 97 is comprised of -- yes, is comprised of -- our domestic is around, yes, 84.

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Unidentified Company Representative, [20]

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And 12.5 outside India.

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Anjani Kumar Tiwari, GAIL (India) Limited - Director of Finance, CFO & Director [21]

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No, you're talking about the outside sale or it is the sourcing number?

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Bhavin Gandhi, Batlivala & Karani Securities India Pvt. Ltd., Research Division - Research Analyst [22]

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Both. So if you can help us with both the numbers, please?

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Anjani Kumar Tiwari, GAIL (India) Limited - Director of Finance, CFO & Director [23]

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So APM gas is around 43 MMSCMD and then we have this, RLNG is 21, 22. And the total domestic is 84.11.

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Unidentified Company Representative, [24]

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International is 12.5...

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Anjani Kumar Tiwari, GAIL (India) Limited - Director of Finance, CFO & Director [25]

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International sale is 12.44. So total is 96.55.

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Bhavin Gandhi, Batlivala & Karani Securities India Pvt. Ltd., Research Division - Research Analyst [26]

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And sir, how much of U.S. LNG was sold in India?

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Anjani Kumar Tiwari, GAIL (India) Limited - Director of Finance, CFO & Director [27]

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It is -- how much cargo? How much cargo has been sold in India?

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Unidentified Company Representative, [28]

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5.5 million cubic meters has been sold in India. 12.5 million cubic meters have been sold outside India.

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Bhavin Gandhi, Batlivala & Karani Securities India Pvt. Ltd., Research Division - Research Analyst [29]

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So sir, sequentially, the sales have declined, is it, in the domestic -- I mean, U.S. LNG sales in India from fourth quarter to this quarter, have they declined?

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Anjani Kumar Tiwari, GAIL (India) Limited - Director of Finance, CFO & Director [30]

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Yes, because of shutdown and other things we have told, that these are the basic reasons for that, in my opening remarks. So these are the overall reasons for the total [trading]. And we are hopeful that it will be better in this quarter.

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Operator [31]

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The next question is from the line of Probal Sen from Centrum Broking Limited.

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Probal Sen, Centrum Broking Limited, Research Division - Analyst of Oil and Gas [32]

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I have 2 questions. One, with respect to the Petrochemical segment, there seems to be a sharp increase in the gas costs or rather the overall costs for the segment on a per-unit basis. Is that solely because of the fact that sales volumes or production volumes have gone down sharply? Or have the effective gas costs also gone up for the segment in this quarter?

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Anjani Kumar Tiwari, GAIL (India) Limited - Director of Finance, CFO & Director [33]

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It is mainly because of the decreased production, which has factored the fixed cost added more. This is the -- primary reason is that only. Because the production was less so it was distributed on the produced quantity that was there.

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Probal Sen, Centrum Broking Limited, Research Division - Analyst of Oil and Gas [34]

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Got it, sir. And as you mentioned that from July onwards, we are now at an accelerated run rate of even more than 200 million tonnes per quarter.

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Unidentified Company Representative, [35]

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[200,000] tonnes.

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Anjani Kumar Tiwari, GAIL (India) Limited - Director of Finance, CFO & Director [36]

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Yes. Yes, we have already catch-up plans to have 100% capacity utilization for the Petrochemical. So that we are going to achieve.

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Probal Sen, Centrum Broking Limited, Research Division - Analyst of Oil and Gas [37]

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Okay. And sir, the second question was with respect to the LPG realizations. If I look at the international prices prevalent for India, they were at probably around $450 a tonne, if I'm not mistaken. Whereas our effective price is coming in at significantly higher than that. Any reason why that premium on Asian countries has gone up, sir, this quarter for us?

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Anjani Kumar Tiwari, GAIL (India) Limited - Director of Finance, CFO & Director [38]

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I think it is international determined prices are there. So this quarter, we had INR 5,000 increase in the per tonne overall. That is the main reason.

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Probal Sen, Centrum Broking Limited, Research Division - Analyst of Oil and Gas [39]

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So are you saying that international prices have gone up by INR 5,000 a tonne or so, sir, Q-o-Q?

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Anjani Kumar Tiwari, GAIL (India) Limited - Director of Finance, CFO & Director [40]

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Yes, yes.

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Operator [41]

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The next question is from the line of Sujit Lodha from Birla Sun Life.

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Sujit Lodha, Aditya Birla Sun Life Insurance Company Limited - Research Analyst [42]

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The first thing, sir, the quarter-on-quarter drop of about 4 MMSCMD. How much of that we -- could be ascribed to the shutdown in fertilizer plant?

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Anjani Kumar Tiwari, GAIL (India) Limited - Director of Finance, CFO & Director [43]

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Can you speak loudly, please, sir?

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Sujit Lodha, Aditya Birla Sun Life Insurance Company Limited - Research Analyst [44]

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Hello. Can you hear me now, sir?

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Anjani Kumar Tiwari, GAIL (India) Limited - Director of Finance, CFO & Director [45]

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Yes, yes, it's okay.

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Sujit Lodha, Aditya Birla Sun Life Insurance Company Limited - Research Analyst [46]

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Sir, the quarter-on-quarter drop in transmission volume of roughly about 4 MMSCMD, how much of that could be ascribed to the shutdown in fertilizer plants?

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Anjani Kumar Tiwari, GAIL (India) Limited - Director of Finance, CFO & Director [47]

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Mainly is around 4 MMSCMD on account of the shutdown in the fertilizer plants, mainly contributes that only.

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Sujit Lodha, Aditya Birla Sun Life Insurance Company Limited - Research Analyst [48]

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So sir, you're saying that those fertilizer plants were shut down throughout the quarter and it was not like for the...

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Anjani Kumar Tiwari, GAIL (India) Limited - Director of Finance, CFO & Director [49]

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No, no, it was all the -- throughout the quarter, they were not shut down. But reasonable days, we've got shut down, some were 25 days, some were 26 days, some were 27 days, like that. Even the Q4...

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Sujit Lodha, Aditya Birla Sun Life Insurance Company Limited - Research Analyst [50]

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And that's why we were down by 4 MMSCMD because of...

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Anjani Kumar Tiwari, GAIL (India) Limited - Director of Finance, CFO & Director [51]

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That is the main reason, that is the main reason.

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Sujit Lodha, Aditya Birla Sun Life Insurance Company Limited - Research Analyst [52]

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Sir, so will it be fine to assume that your first quarter volume will jump back to the fourth quarter levels, plus you will get some incremental volumes on the Petronet extra terminal. Is it fair to assume that?

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Anjani Kumar Tiwari, GAIL (India) Limited - Director of Finance, CFO & Director [53]

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Yes.

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Unidentified Company Representative, [54]

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Already we have started getting higher volumes.

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Sujit Lodha, Aditya Birla Sun Life Insurance Company Limited - Research Analyst [55]

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Okay. And my second question was in terms of Petchem, just a follow-up from the previous question. The gas cost, sir, is it -- can you share with us what are the proportion of that gas -- what proportion of S1 gas have you used in ONGC? And what would you be the values? How does that move quarter-on-quarter in Petchem?

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Anjani Kumar Tiwari, GAIL (India) Limited - Director of Finance, CFO & Director [56]

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In fact, there is no fixed allocation for the petrochemical gas. So whatever the best available for the petrochemical we are allocating. There is no such standard allocation that is there to be -- from that. And so there the cost of production should be least. So whatever the market available, whatever the best available sources are there, we are there.

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Sujit Lodha, Aditya Birla Sun Life Insurance Company Limited - Research Analyst [57]

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So there's no fixed benchmark, which we can gauge before the quarter that it will be linked to a certain price. If the spot prices are going down, doesn't necessarily mean that the Petchem gas costs will go down?

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Anjani Kumar Tiwari, GAIL (India) Limited - Director of Finance, CFO & Director [58]

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Yes. Now, it may go down depending upon the sourcing which are there, but primarily effect is on the prices, which are there and sales profitability. Because you know the price of the Petchem in comparison with the 2018/'19 quarter, it is down. So these are the many reasons for this scarce profitability.

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Sujit Lodha, Aditya Birla Sun Life Insurance Company Limited - Research Analyst [59]

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Sir, my last question would be, when you see the blended tariffs, what is the transmission tariff for this quarter? They've jumped like 3.5% to 4% quarter-on-quarter because your volumes have gone down by 4 MMSCMD, but your revenue is more or less flattish. So that is -- is there anything to do with any take-or-pay or any tariff revision or anything of that sort has happened during this quarter? Or it's all normalized, there's no -- nothing to read about it?

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Anjani Kumar Tiwari, GAIL (India) Limited - Director of Finance, CFO & Director [60]

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No, tariff revision is always effective from the 1st [June]. So...

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Sujit Lodha, Aditya Birla Sun Life Insurance Company Limited - Research Analyst [61]

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Yes, it is effective from July 1.

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Anjani Kumar Tiwari, GAIL (India) Limited - Director of Finance, CFO & Director [62]

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So the tariff revision, which has been done will be effective from July only. So this quarter, we are going to have effect of that. Earlier it was...

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Sujit Lodha, Aditya Birla Sun Life Insurance Company Limited - Research Analyst [63]

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I'm saying this quarter also, there has been some tariff -- some up, so when we calculate the number, the tariff looks higher. So is there anything which could be acceptable or it is just a normal thing, which there's no explanation as such?

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Anjani Kumar Tiwari, GAIL (India) Limited - Director of Finance, CFO & Director [64]

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It is normal only. There is no -- whatever the volume will increase, it will have incremental -- but there is no [seaport sale] like that impacting that, no.

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Operator [65]

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

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Sabri Hazarika, Emkay Global Financial Services Ltd., Research Division - Senior Research Analyst [66]

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First question is regarding, do you have any provisions in the natural gas transmission segment?

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Anjani Kumar Tiwari, GAIL (India) Limited - Director of Finance, CFO & Director [67]

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Provisions means?

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Sabri Hazarika, Emkay Global Financial Services Ltd., Research Division - Senior Research Analyst [68]

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In the sense that your revenue has remained more or less same quarter-on-quarter, but your EBIT has gone up significantly. So was there any one-offs or anything in the other expense anywhere?

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Anjani Kumar Tiwari, GAIL (India) Limited - Director of Finance, CFO & Director [69]

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In the transmission, there is no such one-off in this quarter. Is there?

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Sabri Hazarika, Emkay Global Financial Services Ltd., Research Division - Senior Research Analyst [70]

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There are no such one-offs?

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Anjani Kumar Tiwari, GAIL (India) Limited - Director of Finance, CFO & Director [71]

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Just 1 minute. Give me 1 minute.

There is no such one-off. It is only effect of the price revision only which are there earlier. Nothing else.

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Sabri Hazarika, Emkay Global Financial Services Ltd., Research Division - Senior Research Analyst [72]

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Okay, sir. And secondly, in terms of the policy scenario, are you hearing anything in terms of standard power plants or GST for gas sector, anything of that sort or even allocation of like new deepwater gas, which is coming up from KG basin?

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Anjani Kumar Tiwari, GAIL (India) Limited - Director of Finance, CFO & Director [73]

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So, so far as the standard power plant revival is concerned, talks are going on with the ministry. And we are hopeful that something would be done based on the earlier policy. So these are there.

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Sabri Hazarika, Emkay Global Financial Services Ltd., Research Division - Senior Research Analyst [74]

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Okay. And what about GST for gas?

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Anjani Kumar Tiwari, GAIL (India) Limited - Director of Finance, CFO & Director [75]

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We are quite hopeful it will come. And I think now the government will be focusing on this GST inclusion. Major agenda might have been completed, so they may be focusing now on this. So I'm quite hopeful that this will come up.

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Sabri Hazarika, Emkay Global Financial Services Ltd., Research Division - Senior Research Analyst [76]

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And lastly, about the new gas which is coming from RIL and ONGC as well as some of the smaller sources like Cairn, Rajasthan ramp-up. So are you looking at sourcing those volumes for marketing or anything of that sort?

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Anjani Kumar Tiwari, GAIL (India) Limited - Director of Finance, CFO & Director [77]

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That will be on the competitive price. So we will eye on that also whenever the opportunity comes.

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Sabri Hazarika, Emkay Global Financial Services Ltd., Research Division - Senior Research Analyst [78]

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But nothing, no allocation has been fixed to any sector, right? It is -- right now, it's...

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Anjani Kumar Tiwari, GAIL (India) Limited - Director of Finance, CFO & Director [79]

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No, it is not allocated volume, that is competitive volume. You have to bid for that. Is -- Sanjay, it's okay?

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Operator [80]

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The next question is from the line of Pinakin Parekh from JPMorgan.

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Pinakin M. Parekh, JP Morgan Chase & Co, Research Division - Associate [81]

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Sir just 2 questions on the Gas Trading segment. Sir, my first question is that, just to understand the relationship between the Gas Trading segment and the Petchem segment, whatever gas is sourced by the Trading segment, whether it's a U.S. contract or non-U. S. contract and supplied to the Petchem segment, effectively there would be a transfer pricing at market prices and the profitability on the Trading segment will stand with the Trading segment earnings while Petchem segment will show the market price of cost. Would that understanding be clear?

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Anjani Kumar Tiwari, GAIL (India) Limited - Director of Finance, CFO & Director [82]

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No, no, no. Yes, your understanding is -- a little bit I would like to share for that, that there is no relation between the -- your U.S. volume sourcing as well as the Petchem. Whatever the best opportunity [lease] cost is there, we are allocating and we are pushing for the Petchem. So per se, our U.S. volume is not only identified, we have other sources also like S1, like other, sometimes spot also, wherever the opportunity comes. So that way we are sourcing for the Petchem.

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Pinakin M. Parekh, JP Morgan Chase & Co, Research Division - Associate [83]

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Understood. Sir, just to carry forward on the Trading segment, the Gas Trading EBITDA increased sharply on a quarter-on-quarter basis, even though the discount of the spot LNG prices versus the implied Asia-landed Henry Hub price is actually widened. Now this implies that GAIL has -- is benefiting from the hedging it did last year. So for the remainder of the year F '20 and F '21, sir, across your Henry Hub portfolio, how much of your volumes have you hedged? And how much is still open?

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Anjani Kumar Tiwari, GAIL (India) Limited - Director of Finance, CFO & Director [84]

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Sir, we can't give you the exact number, but the total for this year, for FY '20, we have already sufficient amount cargoes have been hedged. And we have -- and going further also for the next 1 year or so, most of the cargoes have been hedged wherever required and booked wherever required.

So it is a dynamic situation. We can't give you any specific number for that because it all depends upon the market, it depends about the opportunity, it depends upon the prices, which plays between the Brent as well as between the Henry Hub. So all these scenarios, we are looking forward. And as you have noted from the -- from our experience that from the last 2 years, we have increased -- or we have taken various measures to derisk these volumes, U.S. volume, et cetera, as the result shows it is. So that way we are progressing, sir.

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Pinakin M. Parekh, JP Morgan Chase & Co, Research Division - Associate [85]

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Understood. And sir, then to carry forward, is this quarter's EBITDA sustainable at INR 861 crores in the marketing segment?

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Anjani Kumar Tiwari, GAIL (India) Limited - Director of Finance, CFO & Director [86]

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I can't give you any specific number, sir. But please be -- rest assured that we will be doing better or we can pay whatever the debt will be there in the future.

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Operator [87]

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The next question is from the line of Amit Rustagi from UBS Securities.

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Amit Rustagi, UBS Investment Bank, Research Division - Analyst [88]

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Could you elaborate how we are dividing or splitting the gain as it has been already mentioned in Parliament as well as in the various forums by the relevant authorities? So what is the process we are going to apply? And how is it going to be splitted?

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Anjani Kumar Tiwari, GAIL (India) Limited - Director of Finance, CFO & Director [89]

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As you have read in the newspaper, we are also reading the newspaper, nothing new. We have no such agenda for splitting or something like that. Many news are coming so talking about the news, the news, if something will be there, we'll inform you through the stock exchange at the right time. There is no such splitting. [There are no news in that].

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Amit Rustagi, UBS Investment Bank, Research Division - Analyst [90]

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Yes, but sir, there was a statement made by the honorable minister in the Parliament wherein he mentioned the name of our company, and he said that specifically a split has been to split the company in marketing and the transmission. So if this all could be work in progress, can they make a statement in parliamentary like this?

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Anjani Kumar Tiwari, GAIL (India) Limited - Director of Finance, CFO & Director [91]

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I can't comment on the statement because we don't have any official report.

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Amit Rustagi, UBS Investment Bank, Research Division - Analyst [92]

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Okay. And sir, second, if we can look the dropping level in transmission volume, so in India, last 4 years, the transmission volumes or the total consumption of gasoline increased by around 24 MMSCMD. Now in FY '16, the total gas demand was around 127. And this year, we are ranging around 160, so 34 MMSCMD increase. But if I see our transmission volumes, that has gone up from 92 MMSCMD to only 105 MMSCMD.

So are we losing market share to the regional players? Or the regional prices have dropped domestically in terms of the transmission business? What could be the reason that some lady -- someone mentioned about 73% of share? So I think our share in the transmission total consumption has declined from 73% to 69% now.

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Anjani Kumar Tiwari, GAIL (India) Limited - Director of Finance, CFO & Director [93]

--------------------------------------------------------------------------------

It's not...

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Amit Rustagi, UBS Investment Bank, Research Division - Analyst [94]

--------------------------------------------------------------------------------

Only -- and broadly only (inaudible) increase in our volumes versus the total 34 MMSCMD increase in the gas consumption in the year. So the other players have got around 22 MMSCMD volumes.

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Anjani Kumar Tiwari, GAIL (India) Limited - Director of Finance, CFO & Director [95]

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If you see from the last 4, 5 quarters and if you compare now, the total volume has decreased in comparison with that. But our sales more or less remains the same. And due to the [space] power plant and others, which was there and low consumption in other sector, this has impacted. But going forward, our India CVD and other segments, we are hopeful that this is going to increase further. Our new CVDs are coming, and new opportunities are coming, new fertilizer plant and the Urja Ganga are coming.

So in the going forward in the next year onwards, we are going to have more volume in transmitter as well as trading.

--------------------------------------------------------------------------------

Amit Rustagi, UBS Investment Bank, Research Division - Analyst [96]

--------------------------------------------------------------------------------

Sir, how it is still possible that, overall, we are seeing that the 34 MMSCMD increase is the gas consumption in the country at the country level, and the overall volume has not increased in last maybe 4 or 5 quarters also? This quarter also, on a total basis, the gas demand has, has gone up [but] level volumes have still declined.

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Unidentified Company Representative, [97]

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(inaudible) some of the volume, we don't transport but we sell directly. So that volume is not accounted for in the shipping or the transportation element that we are -- is being shown to you, number one.

Number two, this quarter, there were a lot of shutdowns so the effective volume was lower. Next quarter, you will see the incremental growth which is happening. And let me tell you, we have not lost our share, in fact, it would have only grown. And in the end of next quarter, you will see.

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Amit Rustagi, UBS Investment Bank, Research Division - Analyst [98]

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And so maybe, like we are not able to match the data, what you are saying.

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Anjani Kumar Tiwari, GAIL (India) Limited - Director of Finance, CFO & Director [99]

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I request sometime you come down (inaudible).

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Unidentified Company Representative, [100]

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Come and, separately, we will discuss.

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Anjani Kumar Tiwari, GAIL (India) Limited - Director of Finance, CFO & Director [101]

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We will share you, we will satisfy you whatever the queries are there with the facts and figures.

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Amit Rustagi, UBS Investment Bank, Research Division - Analyst [102]

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Yes. Sure, sir. And sir, just my last question. Can you repeat the volumes, sir, of the gas marketing again that how this 97 MMSCMD volumes broke up?

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Unidentified Company Representative, [103]

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12 million is overseas volumes. 85 million is domestic sales.

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Operator [104]

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(Operator Instructions) Next question is from the line of Amit Shah from BNP Paribas.

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Amit Shah, BNP Paribas, Research Division - Analyst [105]

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Just one question. Sir, are there any other shutdowns in the petchem plant for the rest of this year or over the next 12 months?

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Anjani Kumar Tiwari, GAIL (India) Limited - Director of Finance, CFO & Director [106]

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No, there is no likelihood of any shutdown.

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Amit Shah, BNP Paribas, Research Division - Analyst [107]

--------------------------------------------------------------------------------

So with the shutdown this time, was it planned? Or was it unplanned?

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Anjani Kumar Tiwari, GAIL (India) Limited - Director of Finance, CFO & Director [108]

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It was mostly planned.

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Amit Shah, BNP Paribas, Research Division - Analyst [109]

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Okay. And on the gas trading business. So at what -- until at what crude price do the hedge -- are the hedges in place? Or is there something like that, that you can say, providing last time, I remember you as having mentioned that until $55 of crude, there is no real concern or something to that effect?

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Anjani Kumar Tiwari, GAIL (India) Limited - Director of Finance, CFO & Director [110]

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So there is a correlation between the Brent as well as the hedges. We have to see the incremental, where it is going. So it depends what is the price of the hedges, what is the price of the Brent. And that will be our taking the forward and wherever required we are hedging. So that's why we are very cautious, and we have a team working for this.

We are watching on a daily basis what is the movement, what would be the forward, what would be the volume, where the volume is going to be.

So all these scenarios are on daily basis. We can't give you any number or any scenario for these things. But the results show that you have seen that whatever the steps has been taken, it has given a good profitability in there, actually.

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Amit Shah, BNP Paribas, Research Division - Analyst [111]

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No, no, absolutely. Last 3 quarters, you actually kind of -- the numbers have been reasonably stable to surprising positively. I don't know -- I know you cannot comment on the numbers, but would it be fair to say that depending on what you have done so far with the gas trading business, it's unlikely that on a Q-on-Q basis, we suddenly see a 70% decline in profits or something dramatic like that? Was that something you can comment on or even how something like that is possible?

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Anjani Kumar Tiwari, GAIL (India) Limited - Director of Finance, CFO & Director [112]

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I can't comment that also, but we are very cautious, and we are trying to have better realization, better spreads, better bottom line. All these things, we are very cautious. We are taking steps for that. But any generic comment, I can't give you on that.

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Operator [113]

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We move to next question. That is from the line of Sanjay Mookim from Bank of America Merrill Lynch.

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Sanjay Mookim, BofA Merrill Lynch, Research Division - Director and India Equity Strategist [114]

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I have a couple of questions. Could you help reconcile the operating profit difference between the consol accounts and the stand-alone account because most of it seems to be in the unallocated part? Could you give us some light on where the difference comes from?

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Anjani Kumar Tiwari, GAIL (India) Limited - Director of Finance, CFO & Director [115]

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You want the reconciliation between the consolidated as well as...

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Sanjay Mookim, BofA Merrill Lynch, Research Division - Director and India Equity Strategist [116]

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Yes, [EBIT] -- what is the...

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Anjani Kumar Tiwari, GAIL (India) Limited - Director of Finance, CFO & Director [117]

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Yes, yes, that is in front of our -- that there. The deal is INR 1,288 crores and consolidated is INR 1,501 crores. That is there. And on various subsidiaries and JVs, which are there, we have plus/minus. So that way, we have reconciled that. We have reconciliation of...

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Sanjay Mookim, BofA Merrill Lynch, Research Division - Director and India Equity Strategist [118]

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Of course, but I was trying to figure out if there's any 1 or 2 major drivers of the additional gain you have on consolidation. Maybe gas is one, but that explains only INR 50 crores.

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Anjani Kumar Tiwari, GAIL (India) Limited - Director of Finance, CFO & Director [119]

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That is -- MGL and PLL is there, which are there, which has affected. And BCP and also minus is there. IGL is also INR 54 crores. That way, we have complete reconciliation. If you like, we can share this.

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Sanjay Mookim, BofA Merrill Lynch, Research Division - Director and India Equity Strategist [120]

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No sir, what I was trying to get to if you any E&P-related gains here.

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Anjani Kumar Tiwari, GAIL (India) Limited - Director of Finance, CFO & Director [121]

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No, no, no. E&P is in our stand-alone.

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Sanjay Mookim, BofA Merrill Lynch, Research Division - Director and India Equity Strategist [122]

--------------------------------------------------------------------------------

Okay. All right. Sir, second question is just a general question. Do you have any sort of one-offs in this quarter, not just in the transmission segment but across the business? Any sort of one-off...

--------------------------------------------------------------------------------

Anjani Kumar Tiwari, GAIL (India) Limited - Director of Finance, CFO & Director [123]

--------------------------------------------------------------------------------

No, we don't have any one-offs. We don't have any major one-offs. Small things may be there. I don't -- I can't say. But there is no such major one-offs.

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Sanjay Mookim, BofA Merrill Lynch, Research Division - Director and India Equity Strategist [124]

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Okay, sir. And lastly, could you give us an update on the phases of the Urja Ganga pipeline? Where are they? And when can we expect them to commission?

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Unidentified Company Representative, [125]

--------------------------------------------------------------------------------

Yes, yes, so for Urja Ganga, as you know that we have already leased the Varanasi and we have leased the Patna. And the rest of the Dhamra-Angul is already progressing. Dobhi-Durgapur, Bokaro-Angul and Durgapur-Haldia, these are progressively having a good physical progress of around more than 70%, and we are hoping to complete by December 2020. So far as the Barauni-Guwahati is concerned, the physical progress is around 26%, and we are -- as per our schedule, we are also going to complete by December '21. So we are as per our schedule. There is no such delay in this Urja Ganga project.

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Operator [126]

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The next question is from the line of Vishnu Kumar from Spark Capital.

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Vishnu Kumar A.S., Spark Capital Advisors (India) Private Limited, Research Division - VP [127]

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In terms of the gas trading division, the hedging gains that you book, is it possible that you transferred to your trade 10 MMSCMD of volumes you've been sold but you physically book more -- I mean you booked more than the actual volume that you transported?

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Anjani Kumar Tiwari, GAIL (India) Limited - Director of Finance, CFO & Director [128]

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No, no, no. See, I will tell you the hedging rule. Whatever the settlement is done in this quarter, which we have raised earlier, that is accounted in our books. These are different between the purchase and sale. And wherever we have raised, we have it in...

--------------------------------------------------------------------------------

Vishnu Kumar A.S., Spark Capital Advisors (India) Private Limited, Research Division - VP [129]

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So every hedging gain that's booked is backed by delivery?

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Anjani Kumar Tiwari, GAIL (India) Limited - Director of Finance, CFO & Director [130]

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Yes, yes. It is the actual sale [input]. Whatever you are hedging, they're added to actual gain, which are there.

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Vishnu Kumar A.S., Spark Capital Advisors (India) Private Limited, Research Division - VP [131]

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Okay, sir. And next just if you could explain the net movement on cash flow hedges. As of '19, the quarter was about INR 510 crores (sic) [INR 598 crores] negative. Now it is INR 200 crores. If you could just explain the movement there.

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Anjani Kumar Tiwari, GAIL (India) Limited - Director of Finance, CFO & Director [132]

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Which ones? Which one?

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Vishnu Kumar A.S., Spark Capital Advisors (India) Private Limited, Research Division - VP [133]

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In OCI, other comprehensive income, there is one line item called net movement on cash flow hedges gain and loss. So between quarter-on-quarter, if I say, the quarter ended March 19, it is minus INR 510 crores, now it has moved to minus INR 204 crores. So if you could just explain the movement there?

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Anjani Kumar Tiwari, GAIL (India) Limited - Director of Finance, CFO & Director [134]

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It's simply because of the share price of ONGC. The main effect is -- are on that only. That OCI, you are talking about, other comprehensive income you are talking, that is mainly on account of the difference between the prices, price movement of ONGC.

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Vishnu Kumar A.S., Spark Capital Advisors (India) Private Limited, Research Division - VP [135]

--------------------------------------------------------------------------------

Okay, and one last question. Sir, on the petchem side...

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Operator [136]

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(Operator Instructions)

The next question is from the line of Vidyadhar Ginde from ICICI Securities.

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Vidyadhar Ginde, ICICI Securities Limited, Research Division - Oil and Gas Analyst [137]

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My question was on if gas comes under GST, then what kind of benefit would there be for GAIL, if any, in a full year?

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Anjani Kumar Tiwari, GAIL (India) Limited - Director of Finance, CFO & Director [138]

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See, GAIL is not going to have any incremental benefit for that because...

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Vidyadhar Ginde, ICICI Securities Limited, Research Division - Oil and Gas Analyst [139]

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No, if you get credit -- no, no, what I'm saying is in petchem around it because if you get credit, will it -- within the past, I think I was told about INR 200 million to INR 2 billion would be the benefit kind of thing?

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Anjani Kumar Tiwari, GAIL (India) Limited - Director of Finance, CFO & Director [140]

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It will be -- just 1 minute. See, this is a very hypothetical question because we can't quantify discounts, what would be that way. But naturally, the input tax credit will be there, and it will indirectly impact or pass onto the customers also in terms of the tariff and other things. So that requantification, it will -- can't be possible. But customer is going to be benefited overall.

Suppose in the transmission line, we are not getting the setup of the -- with whatever the [ascended take] there. And if that is not there, then the tariff will be more that way. So these are...

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Vidyadhar Ginde, ICICI Securities Limited, Research Division - Oil and Gas Analyst [141]

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And what about petchem?

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Anjani Kumar Tiwari, GAIL (India) Limited - Director of Finance, CFO & Director [142]

--------------------------------------------------------------------------------

Petchem is also...

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Vidyadhar Ginde, ICICI Securities Limited, Research Division - Oil and Gas Analyst [143]

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Some idea, some broad idea.

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Anjani Kumar Tiwari, GAIL (India) Limited - Director of Finance, CFO & Director [144]

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That, we can tell.

At least our GM, Taxation, he will answer.

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Unidentified Company Representative, [145]

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Sir, credit will be available in petchem, but it will depend on what kind of gas we're going to going use and what we're putting together there. And already, there is no [home] right on that component right now also. So it will depend on that -- which part of gases will be used and what is the price? So a number of factors are there. But certainly, credit will be available.

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Vidyadhar Ginde, ICICI Securities Limited, Research Division - Oil and Gas Analyst [146]

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Which will be -- which will improve things where you compare to what it is today?

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Unidentified Company Representative, [147]

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Maybe, maybe.

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Vidyadhar Ginde, ICICI Securities Limited, Research Division - Oil and Gas Analyst [148]

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And the second question was regarding this gas trading volume. I think what the number which you gave earlier, domestic RLNG, U.S. LNG sold outside India, international didn't tie up to 97. So -- so you could give a little more clarity? Or was there any spot LNG volumes traded? And what was -- if it was, then how much was their volume? Some idea, if you could.

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Anjani Kumar Tiwari, GAIL (India) Limited - Director of Finance, CFO & Director [149]

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No, we don't have traded any spot LNG.

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Vidyadhar Ginde, ICICI Securities Limited, Research Division - Oil and Gas Analyst [150]

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Okay. So well, I think the number you gave earlier was 43 MMSCMD domestic; around 21, 22 RLNG; 12.5 sold in the international market; 5.5 sold in India. That ties up to about 83. So can you help us understand the balance 13, 14 MMSCMD?

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Anjani Kumar Tiwari, GAIL (India) Limited - Director of Finance, CFO & Director [151]

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Just 1 minute. I will give you details. Just 1 minute. The total is 96 and overseas sales are 12.44. So balance, domestic is 84...

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Unidentified Company Representative, [152]

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84.11.

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Anjani Kumar Tiwari, GAIL (India) Limited - Director of Finance, CFO & Director [153]

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84.11, yes.

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Vidyadhar Ginde, ICICI Securities Limited, Research Division - Oil and Gas Analyst [154]

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Can you us the breakup of the domestic?

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Anjani Kumar Tiwari, GAIL (India) Limited - Director of Finance, CFO & Director [155]

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APM is there. PMT is there. RLNG is 21.84. Rest is domestic only.

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Operator [156]

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The next question, that is from the line of Akshay Mane from Centrum Broking.

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Akshay Mane, Centrum Broking Limited, Research Division - Associate of Oil & Gas [157]

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Sir, just one question. So in gas transmission segment, we're seeing a different depreciation on a Q-on-Q basis. Is there any specific reason for that?

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Anjani Kumar Tiwari, GAIL (India) Limited - Director of Finance, CFO & Director [158]

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As I have told that there was shutdown in the customer premises, and that has [injured] the distribution.

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Unidentified Company Representative, [159]

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Depreciation.

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Anjani Kumar Tiwari, GAIL (India) Limited - Director of Finance, CFO & Director [160]

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Depreciation, you are asking?

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Akshay Mane, Centrum Broking Limited, Research Division - Associate of Oil & Gas [161]

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Yes, depreciation.

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Anjani Kumar Tiwari, GAIL (India) Limited - Director of Finance, CFO & Director [162]

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I see. Okay, okay.

We have depreciated, and we have capitalized, and then that has been capitalized in the books, R&M and other expenditure as per Ind AS.

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Akshay Mane, Centrum Broking Limited, Research Division - Associate of Oil & Gas [163]

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Sir, what is the amount there?

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Anjani Kumar Tiwari, GAIL (India) Limited - Director of Finance, CFO & Director [164]

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INR 47 crores.

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Akshay Mane, Centrum Broking Limited, Research Division - Associate of Oil & Gas [165]

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Okay. This is capitalized for Ind AS. This would be for which?

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Anjani Kumar Tiwari, GAIL (India) Limited - Director of Finance, CFO & Director [166]

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Can you repeat the question because there is a confusion?

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Akshay Mane, Centrum Broking Limited, Research Division - Associate of Oil & Gas [167]

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Sir, this INR 47 crores is for what?

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Anjani Kumar Tiwari, GAIL (India) Limited - Director of Finance, CFO & Director [168]

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This was on account of the Ind AS and the overall in charges, repair and maintenance that was capitalized.

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Operator [169]

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The next question is from the line of Manisha Porwal from Taurus Mutual Fund.

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Manisha Porwal;Taurus Mutual Fund;Analyst, [170]

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Sir, I just wanted to know your thoughts about the news that government is planning to phase out the gas distribution monopolies. So they were planning some rules within the next 6 months. So can you just share your thoughts on the same as to how it will pan out for you and other players?

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Anjani Kumar Tiwari, GAIL (India) Limited - Director of Finance, CFO & Director [171]

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See, first of all, I would like to clarify we are nonmonopolistic, rather, because the domestic gas which are being produced are allocated by the Government of India. We are purchasing the gas from the international market that are only on account of this...

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Unidentified Company Representative, [172]

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CGD

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Anjani Kumar Tiwari, GAIL (India) Limited - Director of Finance, CFO & Director [173]

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You are talking about the CGD?

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Manisha Porwal;Taurus Mutual Fund;Analyst, [174]

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Yes, yes, yes.

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Anjani Kumar Tiwari, GAIL (India) Limited - Director of Finance, CFO & Director [175]

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Okay, okay. Sorry, I couldn't understand. [Mr. Sanjay Kumar] is -- would like to say something.

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Unidentified Company Representative, [176]

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Yes, so in this case, what regulator has done, PNGRB has issued a concept paper through which they would like to start open access in the CGD networks. That is -- that concept paper is on their website, and they have invited comments. We still think it is a very complicated matter and may not be so easy to implement. But if it happens, it will help in expanding the market in the country.

Just for information, GAIL as a stand-alone player has only 6 CGD. GAIL Gas has got many -- some 20, 30 CGD entities, licenses, but the effect will be for all of them. In fact, GAIL's operations are younger ones, the old CGD entities have more to probably worry about.

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Operator [177]

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The next question is from the line of Nitin Tiwari from Antique Stock.

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Nitin Tiwari, Antique Stockbroking Ltd., Research Division - Research Analyst [178]

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It's related to the transmission segment. Given there were shutdowns in this quarter on the -- particularly, the customer side. So are there any ship or pay, basically, transactions that are booked in this quarter which has led to increase in [ever status]? Sir, what is that?

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Anjani Kumar Tiwari, GAIL (India) Limited - Director of Finance, CFO & Director [179]

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These were the plant shutdown, mostly. So there is no major...

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Unidentified Company Representative, [180]

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It's normal impact.

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Anjani Kumar Tiwari, GAIL (India) Limited - Director of Finance, CFO & Director [181]

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Mainly because seaport.

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Unidentified Company Representative, [182]

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Seaports there is (inaudible) in the quarter because other one-off impact mainly a quarter plant shutdowns year over year (foreign language).

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Anjani Kumar Tiwari, GAIL (India) Limited - Director of Finance, CFO & Director [183]

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(foreign language) because these were the plant shutdowns. These are the plant shutdowns. So as for this, we have done it.

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Nitin Tiwari, Antique Stockbroking Ltd., Research Division - Research Analyst [184]

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And sir, second question is related to the Urja Ganga project. Just taking sort of a hypothetical question. And I want some clarification around. So when the Urja Ganga is fully commissioned and the gas is transported from, say, Gujarat to Haldia or towards like in East India, so given we are still following the zonal tariff structure, in that case, like, because of this application of zonal tariffs by the time it reaches, of course, the last zone of the Urja Ganga, the tariffs would be meaningfully higher. So would that lead to increase in the overall average tariff realized for us as a company because of this sort of structure and because of the long distance of transportation? Is that the right understanding?

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Anjani Kumar Tiwari, GAIL (India) Limited - Director of Finance, CFO & Director [185]

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As you know, the Phase I JHBDPL-Urja Ganga tariff has been already announced. And when the commission of the Phase II and III will be there. By that time, we are hopeful that there will be a unified tariff like that because if the incremental tariff will be there, then possibly, there would be higher cost to the customer. So what we are expecting there, there will be some unified tariff, which are on the agenda of the PNGRB. And possibly, we are hoping that way it will be settled.

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Nitin Tiwari, Antique Stockbroking Ltd., Research Division - Research Analyst [186]

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So you're saying that we can have unified tariffs before December 2020.

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Anjani Kumar Tiwari, GAIL (India) Limited - Director of Finance, CFO & Director [187]

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I can't give you the time line, but we are quite hopeful that whenever the progress of these, PNGRB [will decide] because it is in the interest of the PNGRB as well in the interest of the customers.

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Unidentified Company Representative, [188]

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And also, sir, the zonal tariff rules are very flexible, so not only one-sided approach. There could be other solutions.

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Operator [189]

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Next question is from the line of Rohit Ahuja from BOB Capital.

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Rohit Ahuja, BOB Capital Markets Limited, Research Division - Analyst [190]

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Sir, on the Petrochemicals, you mentioned that the lowest-cost gas from whatever sources available is transferred to the petchem plant, right?

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Anjani Kumar Tiwari, GAIL (India) Limited - Director of Finance, CFO & Director [191]

--------------------------------------------------------------------------------

Yes.

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Rohit Ahuja, BOB Capital Markets Limited, Research Division - Analyst [192]

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And secondly, on LPG business, earnings have been good this quarter. So have we -- are we using only domestic gas there? Or have we used any spot LNG volumes also over there?

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Anjani Kumar Tiwari, GAIL (India) Limited - Director of Finance, CFO & Director [193]

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In the LPG segment, mostly...

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Unidentified Company Representative, [194]

--------------------------------------------------------------------------------

Generally, domestic.

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Anjani Kumar Tiwari, GAIL (India) Limited - Director of Finance, CFO & Director [195]

--------------------------------------------------------------------------------

Domestic gas is being used, mostly. And in the Petrochemical, it is other than the domestic gas. Because there is no allocation for the Petrochemical segment or petrochemical plant.

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Operator [196]

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The next question is from the line of Gagan Dixit from Elara Capital.

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Gagan K. Dixit, Elara Securities (India) Private Limited, Research Division - Analyst [197]

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Sir, I have a query about this deepwater gas pricing. So as you know, there's -- now there's Reliance is also coming with the next year but some also gas and also NGC. So they might come for the bidding of those gas fields. But now deepwater gas price is around $9.30 while spot LNG is $4. So is there -- I recall that for S1 gas, [when you can offer it] from $1 to $2 discount over the deepwater price that's what you did. So now you think that it can be something $4 to $5 of [discount] because more or less in line with the spot LNG?

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Anjani Kumar Tiwari, GAIL (India) Limited - Director of Finance, CFO & Director [198]

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We can't give you any number because the entire (inaudible) are in there and it depends upon the, again, the consumption and demand which are there. And so far as the spot prices are concerned, these are not the price. This are -- these, we can't take as a benchmark for that. It is seasonal price only. So whatever the bidding will be there, demand will be there, cost will be there of the producer, that will determine the prices of this deepwater.

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Gagan K. Dixit, Elara Securities (India) Private Limited, Research Division - Analyst [199]

--------------------------------------------------------------------------------

Yes, but that vertical -- in that scenario, it's anyways better always in the spot LNG as compared to the deepwater price whatever the discount...

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Anjani Kumar Tiwari, GAIL (India) Limited - Director of Finance, CFO & Director [200]

--------------------------------------------------------------------------------

Again, with that thought, we have also, but we can't comment on that.

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Gagan K. Dixit, Elara Securities (India) Private Limited, Research Division - Analyst [201]

--------------------------------------------------------------------------------

And sir, has Reliance started bidding for the gas? Because (inaudible) also fought for -- again NGL gasses coming in there?

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Anjani Kumar Tiwari, GAIL (India) Limited - Director of Finance, CFO & Director [202]

--------------------------------------------------------------------------------

I think not -- we have not received any such communication at a certain points.

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Operator [203]

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Ladies and gentlemen, that was the last question for today. I now hand the conference over to the management for their closing comments. Thank you, and over to you.

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Anjani Kumar Tiwari, GAIL (India) Limited - Director of Finance, CFO & Director [204]

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Thank you very much for Mr. Nilesh and good interaction. And we have tried to clarify all the points which were there. And from the management side, we can only say that we will -- we are trying to maximize the top and bottom lines in a better way. Our total team is dedicated for that. So whatever the best could be there, we are doing considering the market situation, considering the -- whatever the prices are there for various types of gases. We have been hedging. We are in the process of achieving our projects which are there. So all these from the management, we are taking all these steps to have better presence in all the segments wherever required.

So thank you very much, and good luck.

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Operator [205]

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Thank you very much. Ladies and gentlemen, on behalf of HDFC Securities, that concludes this conference. Thank you all for joining us, and you may now disconnect your lines.

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Anjani Kumar Tiwari, GAIL (India) Limited - Director of Finance, CFO & Director [206]

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Thank you.