GAIL(India) Ltd (NSE: GAIL) Q3 2026 Earnings Call dated Feb. 02, 2026
Corporate Participants:
Rakesh Kumar Jain — Director, Finance
Unidentified Speaker
Analysts:
Probal Sen — Analyst
Vivekanand — Analyst
Puneet Gulati — Analyst
Somaiah — Analyst
Amit Murarka — Analyst
Varatharajan Sivasankaran — Analyst
Sabri Hazarika — Analyst
Pratyush Kamal — Analyst
Nitin Tiwari — Analyst
Bineet Banka — Analyst
Mayank Maheshwari — Analyst
Saurabh Handa — Analyst |
Vikash Jain — Analyst |
Presentation:
Operator
Ladies and gentlemen, good day and welcome to GAIL Q3 FY26 Earnings Conference Call hosted by ICICI Securities Limited. As a reminder, all participant lines are will be in the listen-only mode and there will be an opportunity for you to ask questions after the presentation concludes. [Operator Instructions] Please note that this conference is being recorded.
I now hand the conference over to Mr. Probal Sen from ICICI Securities Limited. Thank you. And over to you sir.
Probal Sen — Analyst
Thank you, Palak. Welcome everyone to the post Q3 FY26 conference call of GAIL India. We have with us members of the senior management headed course by Shri Rakesh Kumar Jain, the Director Finance of the company and other Senior Executives in his team. Without further ado, I’ll hand it over to him for opening remarks post which we have a detailed Q&A. Sir, over to you.
Rakesh Kumar Jain — Director, Finance
Thank you, Probal and good morning everyone and a very warm welcome to our quarter three financial year ’26 earning conference call and here with me I am joined by my senior colleagues from various sections of the departments of GAIL India Limited. The quarter under review has been marked by continuous volatility in global energy markets due to uncertain weather conditions and evolving geopolitical dynamics which has kept the HH and it’s spot prices on higher side. Despite the adversities, GAIL’s natural gas transmission volume has shown a recovery as compared to earlier quarters marked by elevated consumption by fertilizer, refinery and CGD sectors.
In addition, GAIL has been able to seize the first mover advantage in preceding nine months by securing additional tie ups with CGD customers which has resulted in new tie-ups of approximately 2 MMSCMD. I find it worth mentioning that during calendar year 2025 more than 15,000 capacity transactions have been booked through GAIL’s open pipeline access portal which is encouraging for us to continue to build and invest in the natural gas infrastructure of the country. Let me begin with business updates for the quarter. As you are aware that PNGRB has issued an interim revision of natural gas pipeline tariff for GAIL’s integrated natural gas pipeline network from INR58.61 to INR65.69 per MMBTU and this is effective from 1st January 2026.
This represents an increase of approximately 12.1% leading to positive impact of approximately INR1200 crore per annum. GAIL has filed a review petition that is post announcement of tariff. We reviewed the tariff and we filed a review petition on 26th December 2025 seeking an increase of INR15 per MMBTU to the interim revision. Let me give you — we submitted approximately say INR78, we got INR65.69 effectively there was approximate reduction. But when we filed the review petition it became INR15 on same principles. Because as you know that the tariff is worked out on discounted cash flow methodology. Any delay in tariff approvals also results in increase in tariff ability of GAIL’s — GAIL has ability to get more. So therefore the INR12 has become INR15. And we filed a review petition for increase of INR15 per MMBTU to the interim tariff revision.
Though the petition GAIL expect ruling of the factors like OpEx, CapEx transmission loss remedy sharing in terms of the regulatory provisions which have not been considered in the interim tariff order with effect from October 1st 2025, GAIL has implemented statewide CST procurement of domestic gas from ONGC Gujarat to enhance tax efficiency for CGD customers. And GAIL is continuously looking for tax optimization. How can we do it for various sections or various customers so that we can — we have ability to give competitive prices. GAIL has been offered to set up two fertilizer plants along the MNJPL corridor. Apart from the — we are — we seek to go into fertilizer sector, this plants will also act as an anchor load for MNJPL. The investment — the investor investment for these two plants is INR21,000 crore. The set proposal is having an in principal approval of board and the proposal is under evaluation stage now.
GAIL Global IFSC Limited, which is GAIL’s only owned subsidiary has successfully commenced operations within the first year of its operation. By extending an intra corporate loan of INR290 crore to Bengal Gas Company Limited. GAIL sees renewable energy as a strategic growth opportunity and is undertaking a significant expansion of existing clean energy portfolio of 145 megawatt. We have that is 118 megawatt of wind and 27 megawatt of solar. Several large projects are currently in various stage of development or are under progress including 170 megawatt wind project in Maharashtra. Solar project of 100 megawatt and 600 megawatt in Uttar Pradesh and approximate 30 megawatt — 35 megawatt captive used solar plants across various GAIL locations.
Compressed biogas continues to be a strategic pillar of our clean energy portfolio. Following the successful commissioning of 5 ton per day CBG plant at Rashi, the Board has approved investment for establishing six CBG plants. These projects are part of GAIL’s commitment to establish around 25, 30 CBG plants across India for which the Company is proactively engaging with multiple state governments to secure land. These initiatives reflects our strong commitments to strengthen India’s energy security while accelerating the transition towards sustainable and clean energy solutions and enhancing long-term value creation. This retail LNG business continues to progress steadily with a plan to establish 29 LNG stations. Development of LNG stations at five locations is presently underway. Further GAIL’s CGD entities have already commissioned 13 LNG or LCNG stations making early step towards building a cleaner long haul transportation ecosystem in the country. As you know this is one of the major consuming sector and upcoming major in LNG consuming sector.
I feel happy to inform our investor that the company has declared an interim dividend at the rate of 50% of face value for the financial year ’25, ’26 that is INR5 per share. GAIL’s result for the quarter ended 31st December 2025 have been declared on last Saturday. I will briefly touch upon the major highlights for this quarter. Thereafter we may open the session for queries. GAIL’s turnover stood at INR34030 crore in Q3 financial year ’26 as against INR34,972 crore in quarter two financial year ’26. Profit before tax in quarter three financial year ’26 stood at INR2030 crore as against INR2823 crore in Q2 financial year ’26. The profit after tax during the quarter stood at INR1603 crore as against INR2217 crore in Q2 financial year ’26.
Quarter three versus quarter three that is quarter three financial year ’26 versus quarter three financial year ’25 on comparative quarter basis GAIL assumed turnover of INR34030 crore as against INR34,907 crore in corresponding period of last year PBT stood at INR2030 crore as against INR5029 crore and PAT stood as INR1603 crore as against INR3867 crore and as you know this is mainly because of an exceptional income we got last year quarter three that is INR2440 crore which was recorded by the company on account of arbitration settlement with SMTS.
Now I will touch upon the physical performance during the quarter vis-a-vis previous quarter gas marketing volume during the quarter stood at 103.98 MMSCMD as against 105.49 MMSCMD Q2 Financial ’26. Natural gas transmission volume improved to 125.45 MMSCMD in quarter three financial year ’26 as against 123.59 MMSCMD in quarter two financial year ’26. The average capacity utilization was 56%. Polymer production was almost flat at 219 TMT in Q3 financial year ’26 which is stood at 220 TMT in previous quarter. LFC production stood at 199 TMT as against 221 TMT in previous quarter.
LPG transmission was 1188 TMT as against 11.67 TMT in previous quarter. The capacity utilization was 103% during the quarter. Now let me take you through the consolidated financials of Q3 financial year ’26 versus Q2 financial year ’26. The consolidated turnover Q3 financial year ’26 stood at INR35,253 crore as against INR35,594 crore in Q2 financial year ’26. The PBT in quarter three financial year ’26 stood at INR2165 crore as against INR2565 crore in Q2 financial ’26. The profit after tax in Q3 financial year ’26 stood at INR1756 crore versus INR1972 crore in Q2 financial year ’26.
As you know, GAIL also is directly dealing with six CGDs just to take you through the performance of those six CGD. GAIL has six direct authorization of six CGDs, has an infrastructure of 215 CNG stations and 4.64 lakh DPNG connections. During the quarter two new CNG stations and 15,990 new DPNG stations were added. The physical volume stood at 0.55 MMSCMD. In next two years deal targets to add around 85 new CNG stations and around 1,50,000 new DPNG connections. I will also take you through the performance of our 100% subsidy, GAIL Gas Limited. In Q3 financial year ’26 turnover of GAIL Gas stood at INR3292 crore as against INR3235 crore in Q2 financial year ’26.
PBT stood at INR143 crore as against INR148 crore in Q2 financial year ’26. The decrease is mainly due to increase in input gas cost and exchange rate resulted in reduction in margin. PAT stood at INR106 crore as against INR111 crore in Q2 financial year ’26. The physical volume stood at 7.8 MMSCMD. During quarter three financial year ’26 GAIL Gas along with its JV subsidies has added 71,411 new DPNG connections and 9 CNG stations. GAIL Gas with its JV subsidies have added an infrastructure of — have an infrastructure of 1246,000 DPNG connections and 674 CNG stations.
I will also take you through the status of ongoing project. As of December 2025 GAIL’s operational natural gas pipeline land has crossed to 18,000 kilometer. Calendar year 2026 will be an important year for project commissioning with several major pipelines to do to come on stream like Mumbai, Nagpur, Jharsuguda that is remaining portion. I am talking about the Jagdishpur-Haldia Project, KKMBPL Phase 2 GurdaspurJammu Pipeline. Together these projects will significantly enhance reach reliability and regional balance in national gas grid. GAIL is also actively considering participating in bidding for new petroleum and petroleum product pipeline largely LPG pipeline.
Petrochemicals project. As regards petrochemical project this calendar year will be an important from petrochemical project point of view as well. Major projects such as GAIL’s 1250 KTA PTA plant at GMPL Mangalore, 500 KTA PDA plant in Osara scheduled to be commissioned during this calendar year and 60 KTA PP plant at Pata is very advanced stage of commissioning may be commissioned in a day or so. CapEx for quarter three financial year ’26 during the quarter a CapEx of INR2186 crore was incurred out of which INR804 crore was incurred on pipeline INR455 crore was incurred, operational CapEx and other was INR620 crore and rest was on CGD ENP [Phonetic]
, renewable equity contribution etc.
I will also take you through the segment wise outlook for short to medium term the PBT from gas marketing during the quarter stood at INR779 crore. The PBT from gas marketing during the nine year stood at INR3000 crore. We are expecting to achieve marketing margin level from gas marketing segment in financial year ’26. In gas transmission segment quarter three financial year ’26 average transmission volume improved to 125.45 MMSCMD as compared to 123.59 MMSCMD during Q2 financial year ’26 further, the volume during the month of December 25th stood at 128.65 MMSCMD. This reflects that there is now a recovery phase or there is a growth in transmission business after we have seen the quarter one which was not to our expectations.
Further the volume during the month of December 2025 is to sorry, I already got stood at 128.65 MMSCMD signifying the return of volume to normal levels. Average transmission volume of 9 months financial year ’26 stood at 123.23 MMSCMD. The recovery in gas transmission volume is primarily on account of elevated consumptions by fertilizer, refinery and CGD sectors and rejection of gas supply to on two sections after completion of repair job which had got disrupted during Q2 financial year ’26 due to extreme monsoon and flash floods in North India. We are hopeful of achieving our gas transmission guidance of 124 to 125 MMSCMD for financial year ’25, ’26.
Polymer production stood at 219 TMT as against 220 TMT in previous quarter. There is a loss of INR483 crore during quarter three financial year ’26 to increase input cost, rupee depreciation and decline in polymer prices. This segment is likely to be at similar level for remaining part of this financial year. However likely softening of input gas prices, various measures being taken for cost of optimization and improvement of efficiency may lead to improvement in performance of this segment in coming year.
LHC production is put at 199 TMT during Q3 Financial year ’26 as against 221 metric ton in previous quarter with a PBT of INR29 crore.The PBT for LHC segment has been hit by drop in prices on account of low crude prices coupled with reduction in allocation of new well gas from 0.3 MMSCMD to 0.2 MMSCMD the management is actively engaging with Ministry for more allocation of domestic gas. In addition to above operational and financial performance, I would also like to highlight the progress of Project Sanchay-2, our flagship project which is focused on maximizing profitability across core business segments through targeted improvements enabled by advanced Data Analytics.
Phase 1 of project has been successfully completed with 30 approved use cases with an expected benefit of more than INR600 crore on net present value basis in the incoming five years. This is after net of CapEx which we are going to incur around INR146 crore. In addition to monetary benefits, Sanchay-2 is also helping build internal capabilities. GAIL is establishing a Center of Excellence comprising existing Sanchay-2 team members and further strengthening a team so that analytics, optimization and value creation becomes embedded in the of GAIL in the way GAIL operates across all business units.
That’s all from my side regarding over your performance and projects. Now the management is available, management of company is available and we will be glad to address any query that you may have.
Over to you Probel.
Probal Sen — Analyst
Thank you sir. Operator, can we start the Q&A?
Questions and Answers:
Operator
Thank you very much. We will now begin the question-and-answer session. [Operator Instructions] The first question is from the line of Vivekanand from Ambit. Please go ahead.
Vivekanand
Hi. Thank you for the opportunity. I have two questions. The first one is on the transmission business. How do you see the volume ramp-up for FY27 and ’28 and what do you think the global gas supply dynamics are looking like when it comes to these assumptions of gas demand? That’s question one. The second question I’ll ask after you answer this one.
Rakesh Kumar Jain
Thank you. With respect to volume ramp up in financial year ’26, we have been giving guidance time to time and in terms of our guidance we are expecting at least 134 MMSCMD to 135 MMSCMD of volume in coming financial year. We will end this financial year in fact around 124 to 125 and we are expecting at least 10 million volume which anyway should have been available this year because there were various factors because of which we could not achieve that.
So in order to give even further details of that almost 4 million volume we are expecting to come from natural growth of CGD and then we lost power volume this year almost 2 million volume power we lost. We expect that to come back. We expect that to come back and new refineries volume and old refineries, these 3 million volumes will come from there. But later we have seen disruption [Technical Issues] that is likely to come up. So even if that volume which we lost during this year, including the CGD growth of 4 to 5 million, we expect to reach 134 to 135 MMSCMD in financial year ’27.
Regarding global gas supply, the global gas supply is abundantly available from coming financial year. As you know lot of capacities are coming on stream and that is helping the price to go down. We expect those price to soften. In fact we have a lot of offers available at a very very competitive price and therefore that will also increase the boost of gas consumption in our price sensitive market.
Vivekanand
Okay, thank you for this. Just one follow up or additional question on the new gas contracts that we are signing. Are these contracts primarily Brent linked or do you have a mix of baskets to link the price to?
Rakesh Kumar Jain
Actually we — when we source the volume we have two three things in our mind. One that the — it should be cheapest available volume to our country because that ours is a price sensisitve market. We do not go based on the any geography or any index. So we are evaluating those offers which we are discussing. But currently we are feeling that Brent linked contract are because this is a — this all dynamics Brent linked contracts are more competitive as compared to Henry Hub linked contract and therefore as a portfolio player we always want to keep a mix of Brent linked and Henry Hub.
So we are looking immediate basis on Brent linked contract. We are of course also discussing Henry Hub but we we feel that Brent linked contract may be available at a competitive rate as compared to Henry Hub during current market. I am telling you because I am not telling that we will not go for Henry Hub, it’s a dynamic situation
Vivekanand
Right. That really helps. Last question is the current portfolio that you have of long-term sourcing which is around 17 million metric ton. Where do you want to take this to, let’s say in the next couple of years?
Rakesh Kumar Jain
We have stated a statement about this by 2030 at least I’m using the word at least. We want to increase our portfolio to around 6-7 MMTPA more from current level. So though demand in the country will be significantly more at least 20 to 23 MMTPA we want to increase the portfolio and when we see that the more demand is coming which is likely to come we’ll further take it on.
Vivekanand
All right, thank you and all the best.
Rakesh Kumar Jain
Thank you.
Operator
Thank you sir. The next question is from the line of Puneet from HSBC. Please go ahead.
Puneet Gulati
Yeah, thank you so much. So you talked about this 6 to 7 MTPA [Phonetic] additional LNG by 2030. When should one thing that you’ll start contracting these?
Rakesh Kumar Jain
We will go progressively. We are already in market for sourcing of at least 12 cargo per annum. We are all in the — already in the market. We are having discussions with various suppliers. So such a long — such a huge volume you cannot expect or we also do not intend to contract in one go. So progressively we are going because we are also seeing the what kind of index, what kind of supplier, what kind of flexibility is available. So progressively we will reach to 20 to 23, that is we will be adding 6 to 7.
Puneet Gulati
And I see early signs of price correction coming in or you’re still waiting for the glad [Phonetic] to really start coming in then price will see.
Rakesh Kumar Jain
Actually we believe that the already the competitive offers are available. So because when we are talking of this contracting it is not from ’26. We are talking of ’27, ’28. For that the suppliers are ready to offer the competitive price. So we do not expect that the price will further crash. Of course you cannot predict anything in oil and gas business. But still based on our analysis that the offers currently available are quite competitive and therefore we have really interest in going ahead.
Puneet Gulati
Understood. And if you can also talk when do you think the tariff review will happen? PNGRB said 1st April 2028. Do you see a scenario where it can happen earlier?
Rakesh Kumar Jain
I want to spend good time on this subject. Actually our last tariff revision had happened from 1st April 2023. And in normal course tariff revision if you go law of the land that is regulations the our naturally the tariff revision was due in April 2028. But when April ’23 the tariff was revised PNGRB had done moderations of around INR10 per MMBTU largely on two accounts. One on consideration of system use gas at $3.61 per MMBTU and capacity on a provisional basis. And the — that $3.61 per MMBTU was not even a domestic price that actually — because of that we filed an appeal with the regulator to consider that.
But the appeal was taking time because of some issues. And we were asked by PNGRB to file tariff regular tariff. So whenever you find a regular tariff, you file everything. So we filed everything and accordingly our submissions in August ’24 was giving us a tariff of INR78. But when PNGRB approved the tariff they approved INR65.69, in fact they only [Indecipherable] two of two parameters which we — for which we went for appeal. But we believe that normally interim tariff concept is not there. So we again filed an appeal of INR15 because now it has become INR15.
So but while even doing interim relief we believe that two parameters should have been considered differently than what have what PNGRB done. They consider higher volume but did not use the transmission loss on higher volume. There is a regulation that if you transport the volume viewers 75% of capacity, 50% of the revenue you are the transporter can return 50% can be passed on. So PNGRB are considered a higher volume. But that that has not been given. We feel apparently these are mistakes apart from other parameters. So we find that appeal with the PNGRB we positive — we are positive and we believe that that appeal will be considered.
Otherwise the tariff was due in April ’28 and they have not said anything that that will be cut or this will be cut. They have considered. They have told in the order that that will be considered in ’28. So if it is considered in ’28 what 58 — INR15 we are asking will become INR17 like if it’s deposit in a bank with a 15% pre tax return.
Puneet Gulati
Okay, understood. And lastly if you can just talk the depreciation was a little higher.
Operator
Sorry to interrupt, sir. May we request you to come for follow up?
Puneet Gulati
Yes, sir.
Operator
Thank you, sir. Ladies and gentlemen, in order to ensure that the management is able to address questions from all the participants in the conference call, please limit your question to two per participant. The next question is from the line of Somaiah from Avendus Spark. Please go ahead.
Somaiah
Thanks for the opportunity, sir. Sir first question is on the fertilizer project that we plan. If you could just help us with — in terms of — in case if we start to invest, what will be the timeline and what is your thought on this capex of INR20,000 crores. How does it compare to the brown field? So are we — we have an expansion option on this. Plus also what is the project return that we are looking at? Timelines, cash flows and project return, these three things if you could help us. Thank you.
Rakesh Kumar Jain
So we expect a timeline of three years from the date board approves this proposal. Principally it is approved but it is subject to policy on energy and the subsidies by government. So we are working on that. And regarding the returns, it’s assured return, when if it is in terms of the policy guidelines of fertilizer so it will be an assured return. That is not a concern for us. And cash flow since it is a three years project. So in the three years the cash flow will come, maybe initial one year, maybe 10%, 20%, then 50%, 60% and remaining like their cash flow will happen.
Somaiah
So there is a capital grant or subsidy angle to this which at a later point [Speech Overlap]
Rakesh Kumar Jain
No capital grant. It is subsidy which is available to fertilizer plants.
Somaiah
Okay, understood.
Rakesh Kumar Jain
Fertilizer plant subsidy means the production subsidy. The after production, because this fertilizer is sold at a price notified and the producer gets the differential.
Somaiah
Understood, sir. But based on the current revenue economics, so what do we think of a [Indecipherable] as a project IRR for this?
Unidentified Speaker
12% equity IRR.
Rakesh Kumar Jain
It’s 12% equity IRR.
Somaiah
Okay, got it. Sir second question is on the marketing side. So one, in the month of Jan, Henry Hub has been quite volatile. It has spiked almost $6, $7. How do we see this impacting us in the near term? That’s the first part. Second part, sorry I missed your initial remarks on the marketing guidance outlook. And also in the presentation in terms of the overseas sales this number has moved to close to 12 MMSCMD for the nine-month FY26 which was 6, 7 MMSCMD. I mean earlier it looked like the international volumes would continue to decline and they’ll be diverted to the domestic market. But last three months it has gone up. If you could just clarify on this.
Rakesh Kumar Jain
So marketing guidance, we have been giving time-to-time. Initially when year began we gave INR4000 crore of marketing margin. We will be able to earn. But seeing the Q2 performance you are expecting somewhere INR4,000 crore to INR4,500 crore. But the question you raise about volatility, so we still maintain that we will be somewhere INR4,000 crore-plus of marketing margin. That’s the guidance. And second question was.
Somaiah
Sorry, one clarification. Sir, when we say INR4,000 crore this is you are referring to FY26 this financial year or you referring to the FY27?
Rakesh Kumar Jain
This is financial year. I’m talking of this financial year.
Somaiah
So for FY27 earlier, I mean we can expect a similar run rate or the you will be guiding at a later point?
Rakesh Kumar Jain
We have been giving this guidance for ’26 also ’27 also we are not saying that we’ll be having any different number than that. Because our volumes are same. The marketing kind of the challenges are same. So we expect next year also we earn INR4000 crore of marketing margin.
Somaiah
Sir, second part was on the overseas sales increasing. Was it last nine months this year 12 MMSCMD.
Rakesh Kumar Jain
My colleague Mr. Satish will now respond.
Unidentified Speaker
During the current year we are taken various optimization measures. So earlier we used to have discussion. So as now we are doing off days basis. So due to this our overseas supply has increased. Overseas sale has increased.
Somaiah
Okay, got it.
Operator
Thank you, sir. The next question is from the line of Amit from Axis Capital. Please go ahead.
Amit Murarka
Yeah. Hi, good morning. Thanks for the opportunity. On pet chem input gas cost, could you tell us what was the number in Q3?
Rakesh Kumar Jain
Just hold on.
Unidentified Speaker
10. — 11.21 — $11.2 per MMBTU.
Amit Murarka
Okay and what was the
Unidentified Speaker
As young as $10.49 in the previous quarter
Amit Murarka
In Q2. Okay and last year if you have the same number for last year.
Unidentified Speaker
Last year it was $9.45.
Amit Murarka
Okay. And with Henry Hub still being higher than last quarter. So this number should go up more in Q4?
Rakesh Kumar Jain
Yeah, you are right with Henry Hub have gone higher. But we are talking with respect to one month settlement, that is January. Right? So January — after January February has softened. If you see the current market of HH, March is still there. Because January normally we have seen because of the severe winter it goes high. So February and March we do not see any challenge. January yes there is a challenge. So we have a lot of options. Firstly, miscommunication [Phonetic] measure by marketing, marketing in an international market. So or doing some optimization measures. So we are working out it. But on the face of it, what you are thinking may be correct. Because today it has gone up the part of that certainly we have to bear the cost.
Amit Murarka
All right. And entire feed stock would be Henry Hub linked LHC or is there any other gas in the mix?
Rakesh Kumar Jain
Not necessarily Henry Hub. Henry Hub is quite, yes significant amount is Henry Hub also. But we are supplying brand and also the available spot prices whatever, because we have lot of volumes available. So we see whatever possible we supply to quarter plant. But is it not necessarily Henry Hub largely a Henry Hub but not necessarily everything is Henry Hub.
Amit Murarka
Understood and it’s fair to say that the you will continue to run the plant at 100% utilization even like if LNG is staying high or would you look to kind of curtail that as well.
Rakesh Kumar Jain
So I will come back to again February and March we don’t see any challenge. January prices settled for February. Yes, there is a challenge. December price settled for January there was no challenge. It was $4.69 per MMBTU. So now question — coming back to your question whether we will run 100% now we are in the fair end of the financial year. So if you stop for a month or two, it actually impacts the energy efficiency and it also impact the customer sentiment. So for a smaller period month or so we do not take a call for shutting down.
This happens in business. Cyclical business certainly impact. But second positive thing is happened in last one month the prices of polymer has gone up. This month it has gone up by INR2.50 per — INR2,400 per metric ton. And before that INR1000 per metric ton. INR3,500 per metric to price also gone up, where once one way the input cost has gone up? Yes. Another high that price of polymer has also increased.
Amit Murarka
Understood. Understood. And earlier you had mentioned they were also thinking of diversifying into ethane. Any progress there?
Rakesh Kumar Jain
We have not said that we are diversifying anything. What we are thinking because this is the only gas based plant in North India. What we are working on to optimize or take various of cost optimization measures to make this plant on profitable on sustainable basis even at this price. So what we are doing first optimization measure we have taken. We are putting one pipeline carrying C2 C3 from our Vijaipur plant to Pata. So currently what we are doing we are extracting C2 C3 at Vijaipur mixing in natural gas pipeline re extracting it.
During this process we lost 10% energy for that one optimization measure we have already taken. And this pipeline will be completed in one, one and half years from now. Second what we are working on. It is quite under consideration that we lay a dedicated ethane pipeline for any of the project and and actually source ethane instead of using gas we actually directly use ethane. Ethane, it has been seen that is a cheaper than gas and it give — it will give 20%, 25% more yield as compared to gas. And if we are able to do that for which we are working this plant will become even at the current level of prices, whereas the price of polymer if you see in 29th onwards any forecast is for this thing will go significantly high. Because today the capacity is higher and demand still less. The situation is going to be reversed in coming three years.
Amit Murarka
Sure. And just the last question on the LPG and liquid hydrocarbons business. So the volume has been curtailed in this quarter I believe because of the APM reduction. So is this a normal run rate now the 200 KTA volume?
Unidentified Speaker
I think so. Right now we are having a non-APM gas allocation around 1.12 MMSCMD and new well field gas around 0.2. So total gas availability for the LHC segment is around 1.32. So our production will be around 2 lakhs per quarter.
Amit Murarka
Okay, understood. That’s all for me. Thank you.
Operator
Thank you sir. The next question is from the line of Varatharajan from Antique Limited. Please go ahead.
Varatharajan Sivasankaran
Thank you for the opportunity sir. Sir when you — in your opening remark you highlighted that the Henry Hub price movement is adverse. Is it only adverse from the point of view of use as a feedstock in petrochem or has there been some kind of an impact on the trading side as well?
Rakesh Kumar Jain
So first question. Yes, it will certainly impact to some extent on the petrochemical project because the January price settled at higher. With respect to the natural gas marketing we have some open volume we have been telling that we source 21 MMSCMD from United States almost 3 MMSCMD we have kept open. Second there are certain take or pay contracts wherein we have signed 60%, 70% takeover pay. So if Henry Hub prices goes higher and becomes uncompetitive as compared to the crude linked contract it’s a consumer behavior that they restrict themselves to take or pay or around that level that certainly put us in a situation to market that volume at a prevailing price.
And certainly the open volume also sometime provides at arbitrage of differently different indexes costlier. So yes it may to some extent impact us but our guidance with respect to marketing margin we have been maintaining of INR4000 crore rupees factoring in all likely situation or whatever is prevailing currently.
Varatharajan Sivasankaran
Understood. Sir in that case like position to give us some kind of a split in terms of volume with regard to this oil and selling contract.
Rakesh Kumar Jain
Can you come again?
Varatharajan Sivasankaran
So you were mentioning like some oil linked contract [Indecipherable] is there because of which you have to curtail so that particular volume in terms of how much of volume of out of that like US contract is actually oil linked [Indecipherable].
Rakesh Kumar Jain
No, no, I have not said so. What I have said we have 21 MMSCMD of volume we source from United States 3 million volume we have gapped open. That means it is not back-to-back basis that is indexes handling up and market. So that is the only challenge what we are telling and and some customers behavior if the prices change other way they restrict themselves take or source from other players. So that happens regularly.
Varatharajan Sivasankaran
Sir just to like get it clarified. So the remaining 18 are all like back-to-back contracts with gas linked contract within.
Rakesh Kumar Jain
Majority is on back-to-back and some volume we take swaps. So that’s how we make it back-to-back that is swaps crude versus Henry Hub.
Varatharajan Sivasankaran
Fair enough sir. My second question was on the capex cost of all these projects. Is there any project where we are seeing an escalation in the capex cost?
Rakesh Kumar Jain
So since most of our current projects are almost at the verge of completion and their cost has become almost kind of of certain X PDH-PP INR11258crore is almost will be completing that project within that cost. PP is already under commissioning no likely, Mumbai, Nagpur, Jharsuguda accepted some portion. We have — we are almost complete Srikakulam-Angul acceptance per line. We are completing [Indecipherable]. So nothing — because this — these projects are at a very significantly advanced stage of completion and we have visibility that there is unlikely of cost expl — cost escalation except Jagdishpur-Haldia which may see some cost escalation not any other project.
Unidentified Speaker
Minor, minor escalation.
Rakesh Kumar Jain
Minor, minor, that’s what I said.
Varatharajan Sivasankaran
Great sir, that is very useful. Thanks and all the best.
Unidentified Speaker
Thanks.
Operator
Thank you sir. The next question is from the line of Sabri Hazarika from Emkay Global. Please go ahead.
Sabri Hazarika
Yeah, good morning sir. Two questions, firstly you mentioned on the Henry Hub price which is your price for January you said it is 4.69 right?
Rakesh Kumar Jain
January supply price actually applicable for — price for January price settled in December, right. So price settled in December is 4.69 which is applicable for January supply. The price settled for the January 7.46 which is applicable for current month, that is February.
Sabri Hazarika
So that has gone up significantly. So that will have
Rakesh Kumar Jain
Yes, yes.
Sabri Hazarika
Impact on the pattern, right?
Rakesh Kumar Jain
Yeah, yeah I admitted that. But we will take some optimization measures. Can we market it instead of bringing that gas to this market can we market it to Europe where prices are good or and then we source some spot or some crude-linked contract gas or available in our portfolio supply. So those optimization measures will take. But on face of it it has gone up
Sabri Hazarika
Right, in a small follow up to this, this INR4000 crore is, when you say INR4000 crore you mean the EBIT, right?
Rakesh Kumar Jain
No, I mean PBT.
Sabri Hazarika
You mean PBT right? So Q3 what was the PBT then? I mean EBIT was INR4000 crore. But I think below EBIT there [Speech Overlap]
Rakesh Kumar Jain
So you reduce INR769 crore from INR3000 crore around INR2231 crore
Sabri Hazarika
2, 3
Rakesh Kumar Jain
INR2231 crore
Sabri Hazarika
INR2231 crore was the
Rakesh Kumar Jain
INR2231 crore. Yeah.
Sabri Hazarika
Okay. That was
Rakesh Kumar Jain
For half year first half.
Sabri Hazarika
Okay. INR2231 crore was the PBT for half year versus that you are expecting INR4000 crore-plus for the full year, right?
Rakesh Kumar Jain
Yeah, yeah. Actually something — some events are taking place because of geopolitical situation. Has anybody envious that the exchange rate will touch to 92
Sabri Hazarika
Right, right sir. That’s very clear.
Rakesh Kumar Jain
So these factors are also making us to calibrate. But we still maintain INR4000 crore.
Sabri Hazarika
Right sir. Sir and second question is on your ethane so sourcing. So you will set up another, I think right now you are setting up Vijaipur Pata but if you were to import ethane from US and also, you’ll have to set up another pipeline which will be set up somewhere in the Hazira Dahej belt. Is that right?
Rakesh Kumar Jain
So maybe Hazira, maybe Dahej, maybe Dabur [Phonetic] to Vijaipur. We have all the options available but we have our own terminal as well. We are expanding the capacity of Dabol from current level of 5 MMTPA to 6.3 MMTPA already sanctioned and we have plan to gradually increase to 12.– 12, 12.5. So, we have all the options available and we are working on that. Which terminal we should plan for bringing ethane and utilize. Because anybody will prefer that you should utilize your own terminal.
Sabri Hazarika
Got it, sir. Thank you so much and all the best.
Rakesh Kumar Jain
Yeah.
Operator
Thank you, sir. The next question is from the line of Pratyush from InCred Equities. Please go ahead.
Pratyush Kamal
Hello, sir. Thanks a lot for giving this opportunity. I have two questions. First is regarding your sourcing. So, since you have mentioned it a couple of times that you source about 5 — 15.5 million ton of contract. So can I get the bifurcation of the contracts like what kind of volumes are you getting from Rascas [Phonetic], what kind of volumes are getting from Exxon, Chevron, etc. This is the first question and once you answer it I’ll go to the second question which I have in my mind.
Rakesh Kumar Jain
So we have 16.53 MMTPA contracts existing. Out of that, we have 5.8 million ton from United States on Henry Hub and 0.75 from Middle East on Henry Hub. That makes 6.55 million ton, right.
Pratyush Kamal
Okay.
Rakesh Kumar Jain
Then 4.5 million ton from again RAS gas on crude link approximately 3 million ton again from one of the marketing company safe on crude linked 0.42 million ton again on crude link from through PLL. And we have signed one more contract from Vitol for 1 million ton that is crude-linked and adlock [Phonetic] another 0.53 million ton of crude link.
Pratyush Kamal
Got it sir. Thanks a lot. Sir second question is regarding the downstream players. The fertilizer, the CGD players and other players whom you actually give the gas. So I wanted to ask regarding the marketing margins of the contracts because in the last quarterly call you mentioned about there’s a 7.8 million ton of contract in which you have a bit of sort of fixed margin and which is majorly sold to fertilizer players. So does it involve that CGD companies also and this 7.8 is something which you majorly get from the rafgas. Is it something which I am understanding correct. So that is the one point and second design [Phonetic] what’s the typical marketing for the other 7.2 million contract in which you do not have a typical fixed kind of margin which is there in the 7.8 billion?
Rakesh Kumar Jain
Actually it’s not last gas, we are getting 7.5 or 7.8 only we are getting 4.8 as of now
Pratyush Kamal
Yes sir.
Rakesh Kumar Jain
Crude link 0.751 on Henry Hub. That is one question.
Pratyush Kamal
Yeah.
Rakesh Kumar Jain
Second, largely our volume I have said 3 MMSCMD you can say 0.75 MMTPA or maybe 0.8 MMTPA is open. All other volumes we have marketed either back-to-back or if not back-to-back we are taking swaps for mitigating risk time-to-time. And when we have marketed these volumes on back-to-back or through swap there is a fixed margin. Now fixed margin varies from contract-to-contract and period of contract. So that’s the overall scenario. Somewhere you get maybe $1 margin or somewhere you get $0.20 margin or somewhere you get $0.10 margin. That varies from the time we market it. That varies to whom we markete it and that varies also based on how much volume we market it. So largely you can consider that out of total volume we have marketed largely on back-to-back basis except maybe 0.8 or 0.9.
Pratyush Kamal
Got it, sir, got it, sir and so over and above this largely the back-to-back contract you also get margins on the APM, the stpt [Phonetic], right? Definitely, I think it’s cap according to the government of INR200 per thousand SCM something like that. So this was regarding the RLNG part but not about the domestic front. In domestic front you also you get some marketing margins on getting contract through APM or stpt. Am I understanding it correct? But there is a margin which has been kept by government end about INR200 per thousand scm. Is it something like that?
Rakesh Kumar Jain
Actually we are [Speech Overlap]
Unidentified Speaker
Domestic gas
Rakesh Kumar Jain
Domestic gas also has two part.
Unidentified Speaker
Yeah.
Rakesh Kumar Jain
One is APM gas where the margin is INR200 rupees per thousand SCM. Another is MDP gas where marketing margin is around the line of RLNG.
Pratyush Kamal
Got it, sir. Got it, sir. Okay sir, that’s all from my end. Thanks a lot for answering these questions.
Rakesh Kumar Jain
Thank you.
Operator
Thank you sir. The next question is from the line of Nitin Tiwari from PhilipCapital India limited. Please go ahead.
Nitin Tiwari
Hi, sir. Good morning. Thanks for the opportunity. Sir my question is also on the gas marketing business. So can you also help us with the guidance for volume for gas marketing FY27? I suppose the contract with Vitol is supposed to start in ’27, right FY27 I mean?
Rakesh Kumar Jain
It has started in ’26.
Nitin Tiwari
It has started. So what is the volume guidance for marketing, sir?
Rakesh Kumar Jain
Sorry? So volume guidance
Nitin Tiwari
What is the
Rakesh Kumar Jain
We expect actually 5% increase. We have been maintaining that 5% to 6% increase in the volume. So if we end up this year 104, 105, because year is to be end. So maybe 109, 110 MMSCMD on a normative basis we should achieve.
Nitin Tiwari
So sir my question is then I mean incremental question is linked to that only. So if we are targeting higher volume in F27 so are we expecting a contraction in margin? Especially in the background of what you earlier commented that now crude-linked contracts are turning out to be more favorable than HH. So are we like expecting any challenges with respect to marketing of HH contracts? And that’s why we are, yeah
Rakesh Kumar Jain
So Nitin, considering those challenge, I have not revised my marketing guidance. I have maintained the INR4000 crore in spite of increase in volume by 5 MMSCMD.
Nitin Tiwari
Yeah. So your volume is going up, but your PBT guidance remains the same. Which tells me that like we are expecting a margin contraction. Is that the right assessment?
Rakesh Kumar Jain
No, no. Yeah, yeah. Not — we are not expecting. But I cannot give you guidance which actually may face some challenges like this year in the beginning who knows [Indecipherable] that situation will happen like this. Still we are maintaining the guidance we have given in earlier in the beginning of the year. That is INR4,000 crore. So I — whenever we give guidance then that — we should give guidance which is in even conservative or difficult scenario you are able to achieve, right.
Nitin Tiwari
Okay.
Rakesh Kumar Jain
So if we expect more but less than let that to come actually we want to give you something which is certain based on today’s assumtio.
Nitin Tiwari
Understood, sir. Fair enough. And sir, my second question was with respect to the petrochemical business. So I mean thanks for helping us with the gas cost. I just wanted to understand the operating cost. If we can give us any ballpark number around what could be an operating cost, operating cash cost excluding depreciation on a pertinent basis that we can like — I mean to help us understand that like how that number is moving.
Unidentified Speaker
[Indecipherable] in the process plant particularly in the petrochemicals. we have around 70% to 75% as a gas cost. This is the other cost which includes repairs and maintenance, imply cost and distortion is pairs and other costs. So you can consider this one.
Nitin Tiwari
Sir the 75% number that you are saying would change when the gas cost changes, right? So I just wanted to understand a ballpark for say operating cost per ton that we can like consider for our understanding.
Unidentified Speaker
For your total cost, you can calculate whatever we have published figure for the petrochemical segment. So we are reporting separate — separately for the petrochemicals another segment. So you can calculate easily from the published figures.
Nitin Tiwari
Okay, fair enough. Thank you.
Operator
Thank you, sir. The next question is from the line of Bineet from Nomura. Please go ahead.
Bineet Banka
Hi, sir. Thanks for the opportunity. One question on the petchem side. So I think ONGC has already announced charter contract for a couple of APM carriers. And they also have an agreement with Petronet LNG for ethan handling. So and given that the Qatar gas will not be rich gas from 2028 onwards. So what is your plan in terms of sourcing gas for your ethane tracker? And where do you want to — I mean will you be using the factors the head terminal for handling ethane or you’ll be adding this capablity in your double terminal?
Rakesh Kumar Jain
Actually this question I have clarified in detail that first we are working on ethane sourcing. We are already in the midst of laying the line from Vijaipur to Pata which can carry ethane. We are also evaluating for putting up a pipeline upstream to Vijaipur. And for that we have three terminals at least in west coast in our mind that is Hazira, Dahej and abode [Phonetic]. The Abol being our own terminal subject to viability, we will prefer to bring ethane at our own terminal.
Bineet Banka
Okay sir. And given the current margins for petchem and the margins in next quarter will be probably worse than what we reported in the third quarter because of higher Henry Hub prices. So is it not better to just stop operating the cracker probably in the fourth quarter because you are making losses even at the EBITDA level.
Rakesh Kumar Jain
Actually we could have done it but mind it, there are two consequences of stopping the plant for a very small period. Because anyway we are expecting next year onward the prices are going to be softened. There we have those offers available for, if we stop the plant for a period of say one or two months, it actually it hurts two ways. One, the energy efficiency or the minimum energy required to maintain the plant in preservative condition that we have to incur. Second, the customer sentiment. You see a lot of customers have signed the contract or MOUs with us. If we stop the plant in between they — we will lost these customers and they will go to our competitors. So we cannot be fly by night the player like now we are losing, we stop it, now we are earning, we start it.
So on a longer-term basis we do not believe that this plant is going to incur losses. And last year we were at a breakeven level this year. unfortunately to reversing April [Phonetic] prices went down and the input has gone up next year, we are not expecting such situation to be repeated.
Bineet Banka
Okay sir, understood. Sir last question on — the housekeeping question. So your staff cost is down significantly. I think it’s lowest in many many years. So what was causing this very low staff cost in third quarter?
Unidentified Speaker
Yes, sir. Basically during the last year we provided PRP at 100%. Basically during the current year, no incremental leisure for the current year. So we have reduced our PRP provisions.
Bineet Banka
And there is no impact of labor code in this number, right?
Unidentified Speaker
No, no, right now, no.
Bineet Banka
Okay, sir, thank you so much. All the best.
Operator
Thank you, sir. Ladies and gentlemen, in order to ensure that the management is able to address questions from all the participants in the conference call please limit your question to one per participant. The next question is from the line of Mayank Maheshwari from Morgan Stanley. Please go ahead.
Mayank Maheshwari
Sir thank you for doing the call. Just a question around capex now considering your petrochemical projects are getting completed this year and if you can just give us a timeline of when they kind of start up on each of them. How much are you thinking about capex for fiscal ’27? Thank you.
Rakesh Kumar Jain
So we expect to have subject to addition of new projects which I am not faxing it. We expect to incur INR9,000 crore to INR10,000 crore of capex in financial year ’27. We have two, three pipelines which are under construction. Those capex will come up like Vijaipur Oriya C2 C3 pipeline, GurdaspurJammu pipeline. Completion of KKMBPL and Jagdishpur-Haldia pipeline and the spur lines of SAPL. Second, we have also approved in board the doubling the capacity of our Jamnagar Loni pipeline. Until now this segment appears to be very small segment. But by doubling it will appear to be very lucrative segment.
So that will also involve a capex of INR5,400 crore. So large part of capex will be on pipeline in ’27 and even in ’28. And then we also have net zero plan INR35,000 crore we have planned to incur in a period of 10 years. And we are evaluating various projects like I narrated during the opening remarks that almost 700 megawatt of 700-plus megawatt of renewable energy products we have in hand, we are working on it and it — we are doing it on pure commercial [Indecipherable] basis to replace our internal uses of power which we are purchasing.
So around INR2,000 crore to INR3,000 crore of capex will come from that side and then maybe remaining capex which project we are completing during this year will be there from petrochemical and GNPL and then equity and country CGD projects which we are doing LNG projects which we are doing CBG project projects which we are doing may involve INR800 crore to INR1000 crore of capex. This is how we reach to INR9,000 crore to INR10,000 crore of capex including equity.
Mayank Maheshwari
So very clear the timeline on the completion of the petrochemical plans this year. Like when are you thinking which starts up? PTA Mangalore, PP-PDH like when do they start up now from your timeline perspective?
Rakesh Kumar Jain
PTA will start doing this financial year. We are very hopeful that it will be commissioned during this financial year. PP which we are putting at Pata 60 KTA will be commissioned in a day or two. PDH-PP Usar we expect to complete during this calendar year that is delayed, delayed as planned. We could not complete but by calendar year end we expect it to complete.
Mayank Maheshwari
Got it, sir. Thank you.
Rakesh Kumar Jain
Thank you.
Operator
Thank you, sir. The next question is from the line of Saurabh from Citigroup. Please go ahead.
Saurabh Handa
Yeah, thank you for the opportunity. Sir you had mentioned that for the tariff hike benefit which is 12% the earnings benefit you’re looking at is around INR1200 crores. Now this is what you had announced when this was before the zonal tariff per shipment. Now based on the zonal tariffs it looks like the benefit could be slightly higher than that. So are you still maintaining a 12% number or could you just quantify in terms of realized benefit?
Rakesh Kumar Jain
Actually we maintain 12% because this journal distribution is subject to our risk and reward. It may be 14%, it may be 11%. So we maintain a average number of 12%.
Saurabh Handa
Sure sir. And just last question on capex with all your pipelines likely to get commissioned over the next two to I think between March and June, how much should we look at in terms of what you will be capitalizing and the implications for depreciation?
Rakesh Kumar Jain
Just hold on.
Unidentified Speaker
In the current quarter I have capitalized around INR5200 crores. So only balance ports on of circa [Indecipherable] Jagdishpur-Haldia is per line around 300 kilometer and some portion of from Calcutta to Haldiya and Amra to Haldiya, this will capitalize by June and some portion of Mumbai, Nagpur, Jharsuguda mainly Nagpur to Jabalpur and in Maharashtra region. So this pipeline is capitalized and during the by June 26th GurdaspurJammu pipeline will also capitalized so the capex is around INR500 crores. So these are the capex which will capitalized during the coming years.
Saurabh Handa
So how much would this amount be? If you just exclude the GurdaspurJammu pipeline is that another INR4,000 crores to INR5,000 crores of capitalization.
Unidentified Speaker
From INR2,500 crores to INR3,000 crores.
Saurabh Handa
Okay, got it. Thank you so much.
Operator
Thank you, sir. The next question is from the line of Vikas Jain from CLSA. Please go ahead.
Vikash Jain
Hi, sir. Thanks for taking my question. I have two of them. Firstly this staff cost. You said that there was some adjustment. Because you had made a higher provision earlier. So going ahead what would be the annual or quarterly run rate that one should look at say from FY27 or so what will be the annual staff cost run rate that we should be looking at?
Rakesh Kumar Jain
Vikash ji [Foreign Speech] Performance related payment [Foreign Speech] that is linked to incremental profit. So as compared to last year, this year we are not expecting any incremental profit. So therefore the on account of incentive that has gone down. Now your question how much you should factor in? This is — this year we are clear. But next year certainly we expect that if we are not having incremental profits certainly we will have next year because our base is going down. So next year you can consider the staff cost at the level of previous year.
Vikash Jain
Okay.
Unidentified Speaker
INR100 crores around you can add INR100 crores on the incremental profit on account of PR.
Vikash Jain
Okay. Understood, understood, sir. Rakesh, ji just one more thing. So this revision of tariff.
Rakesh Kumar Jain
Sorry.
Vikash Jain
Revision of tariff that we filed for. See if if it does not get a look through sometime in the next 12 months or so then automatically they will, PNGRB will be like you’re anyways going to get it from April 28th. Is that how we should look at it? And you — I mean how is the process? So once you submit it then it is — do they have a timeline within which they need to respond or?
Rakesh Kumar Jain
Vikash ji, there is no timeline for regulator. That’s the fact. So at our part we have filed the petition. At our part we will follow up for that. But the concerned amount timeline remains.
Vikash Jain
Okay, okay. And finally I think just to kind of recap what you were just saying to the earlier participant was so INR5,400 crore is the capitalization in this particular financial year for pipelines and how much was is it likely to be in 20 — FY27?
Rakesh Kumar Jain
I think Sinha ji will respond.
Unidentified Speaker
Yes, I will give you.
Rakesh Kumar Jain
Vikash ji, I think this is not readily available. Let us give you right answer. Give us maybe half an hour. He will come back to you. Sinha ji will come back.
Vikash Jain
Yeah, okay, sure. Thank you so much.
Rakesh Kumar Jain
Thank you.
Operator
Thank you, sir. Ladies and gentlemen, that was the last question for today. I would now like to hand the conference over to management for closing comments.
Rakesh Kumar Jain
Thank you, dear participants, it was always or it is always good to interact with you. I know you may have some more questions which you might not or you could not have asked because of the time constraint. Or there there was some one question of the cast, we could not respond immediately. We appreciate your participation and we will be answering you the questions you could not ask or we could not respond offline and look forward to interact with you regularly. Thank you very much.
Operator
[Operator Closing Remarks]
Unidentified Speaker
Thank you. Everyone.