GAIL(India) Ltd (NSE: GAIL) Q3 2026 Earnings Call dated Feb. 02, 2026
Corporate Participants:
Rakesh Kumar Jain — Director (Finance) and Chief Financial Officer
Satish Kumar Sinha — Executive Director (F&A)
Analysts:
Probal Sen — Analyst
Vivekanand Subbaraman — Analyst
Puneet Gulati — Analyst
Somaiah Valliyappan — Analyst
Amit Murarka — Analyst
Varatharajan Sivasankaran — Analyst
Sabri Hazarika — Analyst
Nitin Tiwari — Analyst
Bineet Banka — Analyst
Mayank Maheshwari — Analyst
Saurabh Handa — Analyst
Vikash Jain — Analyst
Pratyush Kamal — Analyst
Presentation:
operator
Ladies and gentlemen, good day and welcome to Gale Q3FY26 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. Should you need assistance during this conference call please signal an operator by pressing 0 on your Touchstone phone. Please note that this conference is being recorded. I now hand the conference over to Mr. Prabhul Sen from ICICI Securities Ltd. Thank you. And over to you sir.
Probal Sen — Analyst
Thank you Palak. Welcome everyone to the post Q3FY26 conference call of Gale India. We have with us members of the senior management headed course by Sri Lakesh 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 and A. Sir, over to you.
Rakesh Kumar Jain — Director (Finance) and Chief Financial Officer
Thank you Provost 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 Yale India Limited. The quarter under review has been marked by continuous volatility in global energy markets due to due to uncertain weather conditions and evolving geopolitical dynamics which has kept the HH and spot prices on higher side. Despite the adversities, Gale’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, Gale 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 2mms cmd. I find it worth mentioning that during calendar year 2025 more than 15,000 capacity transactions have been booked through GAZE 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 Gills integrated Natural Gas pipeline network from Rupees 58 Rupees 61 paise to Rupees 65.69 paise per MMBTU and this is effective from 1st January 2026.
This represents an increase of approximately 12.1% leading to projective impact of approximately 1200 crore rupees per annum. Gail has filed a review petition that is post post announcement of tariff. We reviewed the tariff and we filed a review petition on 26th December 2025 seeking an increase of 15 rupees per mmbtu to the interim division. Let me give you. We submitted approximately 78 rupees. We got 65 rupees 69 paise. Effectively there was approximate reduction. But when we filed the review petition it became 15 rupees 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 Gael Gale has ability to get more so. Therefore the 12 rupees has become 15 rupees. And we filed a review petition for increase of Rs.15 per MMBTU to the interim tariff region. Though the petition Gale 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 10-01-2025. Gale has implemented statewide CST procurement of domestic gas from ONGC Gujarat to enhance tax efficiency for CGD customers.
And Gael is continuously looking for. You know, tax optimization. How can we do it for various sections or various customers so that we can we have ability to give competitive prices. Gale has been offered to set up two fertilizer plants along the MNJPL corridor. Apart from the. You know, we are. We seek to go into fertilizer sector. This plants will also act as an anchor load for MLJPL. The investment, the investor investment for these two plants is rupees 21,000 crore rupees. The set proposal is having an in principal approval of gold and the proposal is under evaluation stage now.
Gale Global IFSC Ltd. Which is Gale’s only owned subsidiary has successfully commenced operations within the first year of its operation. By extending an intra corporate loan of rupees 290 crore to Bengal Gas Co. Ltd. Gale 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 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 capture used solar plants across various green locations.
Compressed biogas continues to be a strategic pillar of our clean energy portfolio. Following the successful commissioning of 5 ton per day CVG plant at Rashi, the Board has approved investment for establishing six CBG plants. These projects are part of Le’s commitment to establish around 2530 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 GIL 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 2526 I.e. rupees 5 per share. Gas 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. Gas Turnover stood at rupees thirty four thousand thirty crore in Q3 financial year twenty six as against thirty four thousand nine hundred seventy two crore in quarter two financial year twenty six. Profit before tax in quarter three financial year twenty six stood at rupees twenty thirty crore as against twenty eight twenty three crore in Q2 financial year twenty six. The profit after tax during the quarter stood at rupees sixteen zero three crore as against twenty two seventeen crore in Q2 financial year twenty Six quarter three versus quarter three I.e.
quarter three financial year twenty six versus quadrant three financial year twenty on comparative quarter basis deal assumed turnover of rupees thirty four thousand and thirty crore as against thirty four thousand nine hundred and seven crore in corresponding period of last year DBT stood at rupees two thousand thirty crore as against five thousand twenty nine crore and PAT stood as sixteen oh three crore as against three thousand eight hundred sixty seven crore and as you know this is mainly because of an exceptional income we got last last year quarter three that is 24440 crore which was recorded by the company on account of arbitration settlement with SMCs.
Now I will touch upon the physical performance during the quarter. Visa with previous quarter Gas marketing volume during the quarter stood at 103.98 mms CMD as against 105.49 mm as CMD Q2 Financial 26. Natural Gas Transmission volume improved to 125.45 mms CMD in Quarter 3 Financial Year 26 as against 123.59 mm at CMD in Quarter 2 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 11.67tmt in previous quarter. The capacity utilization was 103% during the quarter. Now let let me take you through the Consolidated financial of Q3 financial year 26 versus Q2 financial year 26. The consolidated turnover Q3 financial year 26 stood at Rupees 35,253 crore as a gas Rupees 35,594 crore in Q2 financial year 26. The PVT in quarter three financial year 26 stood at Rupees 21. 65 crore as a gas 25. 65 crore in Q2 financial 26. The profit after tax in Q3 financial year 26 stood at 1756 crore versus 1972 crore in Q2 financial year.
As you know, Gale also is directly dealing with six CGTs just to take you through the performance of those six CGD. Gale has six direct authorization of six gas, 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 4. In next two years deal targets to add around 85 new CNG stations and around 1 lakh 50,000 new BPNG connections. I will also take you through the performance of our 100% subsidy, Gale Gas Limited in Q3 financial year 26 turnover of Gale Gas stood at 3292 crore as against rupees 3235 crore in Q2 financial year 26.
PBT stood at rupees 143 crore as against 148 crore in Q2 financial year26. The decrease is mainly due to increase in input gas cost and exchange rate resulted in reduction in margin. PAT stood at rupees 106 crore as against 111 crore in Q2 financial year 26. The physical volume stood at 7.8 MMX CMD during quarter 3 financial 26 Dill Gas along with its JV subsidies has added 71,411 new DPNG connections and 9 CNG stations. Gale 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 years 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, Jhar Subra that is remaining portion. I am talking about the Jagdish Gunal dia Project, KKMBL Phase 2 Gurdaspur Jambu Pipeline. Together these projects will significantly enhance reach reliability and regional balance in national gas grid. Deal 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 Gills 1250 KTA PTA plant at GMPL Mangalore, 500 KTA PDA plant in Osara Schujul 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 3 financial year 26 during the quarter a capex of rupees 2186 crore was incurred out of which 804 crore was incurred on pipeline 455 crore was incurred, operational capex and other was 620 crore and rest was on CGD ENP, renewable equity contribution etc.
I will also take you through the segment wise outlook for short to medium term the PVT from gas marketing during the quarter stood at 779 crore. The PBT from gas marketing during the nine year stood at rupees three thousand 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 mms cmd as compared to 123.59 mms cmd during Q2 financial year 26 further, the volume during the month of December 25th stood at 128.65 msm. 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.
What is the volume during the month of December 2025 is to sorry, I already got stood at 128.65 MSM signifying the return of volume to normal levels. Average Transmission volume of 9 months financial year 26 stood at 123.23 mm. 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 125mms CMD for financial year 2526 polymer production stood at 219tmt as against 220tmt in previous quarter.
There is a loss of rupees 483 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. LFC Production is put at 199TMP during Q3 Financial at 26 as August 221 metric ton in in previous quarter with a with a with a pvt of with a pvt of 29 crore.
The pvt for PVT for LSC segment has been hit by drop in prices on account of low crude prices coupled with reduction in allocation of new well gas Nueville gas from from point 3 to mms cmd 2.2 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 Culture 2, our flagship project which is focused on maximizing profitability across core business segments through targeted improvements enabled by advanced Data Analytics. Phase one of project has been successfully completed with 30 approved use cases with an expected benefit of more than Rupees 6, 600 crore on net present value basis in the incoming five years.
This is after net of capex which we are going to incur around 146 crore. In addition to monetary benefits, Censure 2 is also helping build internal capabilities. Gale is establishing a Center of Excellence comprising existing Sunchat 2 team members and further strengthening a team so that analytics, optimization and value creation becomes embedded in the of G in the way Gale 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 Prabhat. Thank you sir.
Probal Sen — Analyst
Operator, can we start the Q and A?
Questions and Answers:
operator
Thank you very much. We will now begin the question and answer session. Anyone who wishes to ask a question may please press STAR and one on their Touchstone telephone. If you wish to remove yourself from the question queue, you may press STAR and two participants are requested to use handsets while asking a question. Ladies and gentlemen, we will wait for a moment while the question queue assembles. The first question is from the line of Vivek Anand from Ambit. Please go ahead.
Vivekanand Subbaraman
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 134-135 mm CMD 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 CED 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 that is likely to come up. So even if that volume which we lost during this year, including the CED growth of 4 to 5 million, we expect to reach 134 to 135mms in financial year 27. Regarding global gas supply, the global gas Supply is abundantly available from coming 5 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 Subbaraman
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 when we source the volume we have two three things in our mind. One that it should be cheapest available volume to our country because you know that ours is a price and steel 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 Brandtling contract are because this is a. This all dynamics Brandtlink contracts are more competitive as compared to Henry Hublink contract and therefore as a portfolio player we always want to keep keep a mix of Brandling and Henry Hub.
So so we we are looking immediate basis on brandlink contract. We are of course also discussing and but we we feel that brandlink contract may be available at a competitive rate as compared to Henry up during current market. I am telling you because I am not telling that we will not go for India. It’s a dynamic situation right?
Vivekanand Subbaraman
That 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, 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 mm TB More from current level. So though demand in the country will be significantly more at least 20 to 23 mmdp. 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 Subbaraman
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 Pudit from hsbc. Please go ahead.
Puneet Gulati
Yeah, thank you so much. So you Talked about this 6 to 7 MTPA 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 various suppliers. So such a Long such a huge volume you cannot expect or we 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 2243, that is we will be adding 6. To 7 and I see early signs of price correction coming in or you’re still waiting for the glad to really start coming in then price will see. Actually we believe that the already the competitive offers are available. So. So because when we are talking of this contracting it is not from 26. We are talking of 2728. 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? PNGRP 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 PNGRV had done moderations of around rupees 10 rupees per MQ largely on two accounts. One on consideration of system use gas at 3.61 dollar per mm BTU and capacity on a provisional basis. And the you know that 3.6 $1 per MBT was not even a domestic price that that actually because of that we filed an appeal with the regulator to consider that.
But the appeal was taking time because of some some issues. And we were asked by PNG RB file tariff regular tariff. So whenever you find a regular Terry, you file everything. So we filed everything and accordingly our submissions in August 24 was giving us a tariff of 78 rupees. But when PNGRP approved the tariff they approved 65 rupees 69 paise. In fact they only two of two parameters which we for which we went for appeal. But we. We believe that normally interim tariff concept is not there. So. So we again filed an appeal of 15 rupees because now it has become 15 rupees.
So but while. While even doing interim relief we believe that two parameters should have been considered differently than what have what CNGRB done. They consider higher one 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 appear 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, 15 rupees we are asking will become 17 rupees like if it’s deposit in a bank with a 15% pre tax return.
Puneet Gulati
Okay. And lastly if you can just talk the depreciation was a little higher.
operator
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 Somaya from Adventures Park. Please go ahead.
Somaiah Valliyappan
Thanks for the opportunity, sir. So 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 20,000 crores. How does it compare to the brown field? So are we. You know 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. We expect a timeline of three years from the date board approves this proposal. Principally it is approved but it is subject to policy. Policy on energy and the subsidies by government. So we are. We are working on that. And regarding the returns, it’s assured returning when if it is in terms of the policy guidelines of fertilizer so it will be an assured return. That, that. That. 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. So there is a capital grant or subsidy angle to this which at a. Later point no capital grant. No capital grant is the subsidy which is available to fertilizer plants.
Somaiah Valliyappan
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 Valliyappan
Understood. But based on the current revenue economics. So what do we think about as a project IRR for this.
Rakesh Kumar Jain
12% equity IRR.
Somaiah Valliyappan
Okay, got it. So second question is on the marketing side. So 1. In the month of Jan, entry 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 12mms. For the 9 month FY26 which was 6.7mms. 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 4000 crore rupees of marketing margin. We will be able to earn. But seeing the Q2 Q2 performance you are expecting somewhere 4,000 to 4,500. But the question you raise other volatility. So we still maintain that we will be somewhere 4,000 plus of marketing margin. That’s the guidance. And second question was.
Somaiah Valliyappan
Sorry, one clarification. When we say 4,000 this is. You are referring to FY26 this financial year or the referring to the frequency.
Rakesh Kumar Jain
Sir, this is financial year. I’m talking of this financial year.
Somaiah Valliyappan
So for FY27 earlier. I mean we can expect a similar run rate.
Rakesh Kumar Jain
We have giving this guidance for 26 also 27 also. We are not saying that we’ll be having any any different number than that. Because our our volumes are same. The marketing kind of, you know, the challenges are same. So we expect next year Also we earn 4000 crore rupees piece of marketing margin.
Somaiah Valliyappan
Second part was on the overseas sales increasing. Was it last nine months this year 12 mm.
Rakesh Kumar Jain
My colleague Mr. Satis.
Satish Kumar Sinha
During the current year we are taken various optimization measures. So earlier we used to have destination. So as now we are doing off days basis. So due to this our overseas supply has increased. Overseas sale has increased.
Somaiah Valliyappan
Okay.
operator
Thank you. Sir, the next question is from the line of Amit from Access Capital. Please go ahead.
Amit Murarka
Yeah.
Rakesh Kumar Jain
Hi, good morning.
Amit Murarka
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.
Satish Kumar Sinha
10.11.21 11.2 $per mmbt. As young as. 10.49 in the previous quarter in Q2.
Amit Murarka
Okay. And. And last year if you have the same number for last year.
Satish Kumar Sinha
Last year it was 9.45.
Amit Murarka
Okay. 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 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 measure by marketing Marketing in an international market. So 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. 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 LHG or is there any other gas in the mix?
Rakesh Kumar Jain
Not necessarily handy up. Handy Hub is quite. Yes significant amount is Henry Hub also. But we are supplying brand and also the the available spot prices whatever. Because we have a lot of lot of volumes available. So we see whatever possible we supply to quarter plant. But is it not necessarily Henry largely a Sandria but not necessarily everything is area.
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 fake 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 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 2 rupees 50 Peter per 2,400 rupees per metric ton. And. And before that 10001000 rupees per metric ton. 3,500 rupees 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
Why 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 Vijayapur plant to Pata. So currently what we are doing we are. We are extracting. Extracting C2 C3 and Visa 4 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 112 years from now. Second what we are working on. It is quite under you know consideration that we lay a dedicated ethane pipeline for any of the project and and actually source ethane instead of using gas we we actually directly use ethane. Ethane. It has been seen that is a cheaper than gas and it will give 2025% 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. Sure.
Amit Murarka
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 200km volume?
Satish Kumar Sinha
I think so. Right now we are having a non APM gas allocation around 1.12 mms and new wellfield 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 Vartarajan from Antique Limited. Please go ahead.
Varatharajan Sivasankaran
Thank you for the opportunity sir. So 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 21mms cmd from United States almost 3mmscmd we have kept open. Second there are certain take or pay contracts wherein we have signed 60 70% takeover pay. So if handling 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 you know 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 4000 crore rupees factoring in all likely situation or whatever is prevailing currently.
Varatharajan Sivasankaran
Understood. So in that case like you know position to give us some kind of a split in terms of volume with regard to this oil and selling contract telecom again so you were mentioning like you know some oil link contract 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 you know US contract is actually oil.
Rakesh Kumar Jain
I have not said so what I have said we have 21mms cmd of volume we source from United States 3 million volume we have gapped open. That means. 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 just to like get it clarified.
Varatharajan Sivasankaran
So the remaining 18 are all like you know back to back contracts with.
Rakesh Kumar Jain
Gas linked majority 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.
Varatharajan Sivasankaran
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 you know certain X PDS11258crore is almost will be completing that project within that cost. PP is already under commissioning no likely accepted some portion. We have. We are almost complete acceptance per line. We are completing. So. 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. You know cost escalation. Except the visual alia which may see some. Some cost escalation.
Not any. Any other project. Minor, minor escalation. Minor, minor.
Varatharajan Sivasankaran
Great sir, that is very useful. Thanks and all this.
operator
Thank you sir. The next question is from the line of Sabri Hazarika from MK 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 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 for me.
Sabri Hazarika
So that has gone up significantly. So that will have 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. Can we you know market market it to Europe where prices are good or. And then we source some spot or some grooming 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
in a small follow up to this. This 4000 crore is. When you say 4000 crore you mean the EBIT, right?
Rakesh Kumar Jain
I mean PBT.
Sabri Hazarika
You mean PBT right? So Q3 what was the PBT then? I think a bit was 4000 cr. But I think below a bit.
Rakesh Kumar Jain
So you reduce 769 cr from 3000 cr around 223-12-322-31231 was. Yeah. Okay. That was for half year. First half. Okay.
Sabri Hazarika
2231 cr was the PBT for half year versus that you are expecting 4000 cr plus for the full year, right?
Rakesh Kumar Jain
Yeah, yeah. Actually something. Some. Some events are taking place because of geopolitical situation. Has anybody envious that the exchange rate will touch to 92 right. So these, these factors are also you know making us to calibrate. But we still maintain 4000 right sir.
Sabri Hazarika
And second question is Amir Ethane so sourcing. So so you will set up another. I think right now you are setting up Vijaypur Pata but if you were. To import Ethan from us and also. You’Ll have to set up another pipeline which will be set up somewhere in. The Hazira Dahesh belt. Is that right?
Rakesh Kumar Jain
So maybe Hajira, maybe the Haze, maybe Dabur to Vijayapur. We have all the options available but you know we have our own terminal as well. We are expanding the capacity of Dabol from current level of 5 MDP to 6.3 already sanctioned and we have plan to gradually increase to 12.1 2.5. 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
Thank you so much and all the best.
operator
Yeah, 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 you know, since you have mentioned it a couple of times that you know you source about 5:15.5 million turn of contract. So can I get the bifurcation of the contracts like what kind of volumes are you getting from Rascas, what kind of volumes are getting from Exxon, Chevron, etc this. It’s the first question and once you answer it I’ll you know go to the second question which I have in my mind.
Rakesh Kumar Jain
So we have 16.53 mmtp of contracts existing out of that. We have 5.8 million ton from United States on Henry up and.75 from Middle east on Henry. That makes 6.55 million ton. Right. 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 you know through pll. And and we have, we have signed one more contract from vital for 1 million ton that is gonna and adlock another 0.53 million ton of crude link.
Pratyush Kamal
Got it sir, Got it. So thanks a lot. The second question is regarding the downstream players. The you know, the fertilizer, the CVD players and you know, 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, you know there’s a 7.8 million ton of contract in which you have a bit of sort of fixed margin, you know and which is majorly sold to fertilizer players. So you know, does it involve that CGD companies also and this 7.8 is something which you majorly get from the rafcake.
Is it something which. Which I am understanding correct. So that is the one point and second design 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 guess. We are getting 7.5 or 7.8 only. We are getting 4.8 as of now 0.751 mdm. That is one question. Second, largely our volume I have said three mm s cmd you can say 0.75 or maybe 0.8. MMDPA 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 a dollar margin or somewhere you get 20 cent margin or somewhere you get 10 cent margin. That varies from the time we market it. That varies to whom we marketed and that varies also based on how much volume we marketed. 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. So got it. So and so over and above this, you know largely the back to back contract you also get margins on the apmm, the stpt, right? Definitely. I think it’s cap according to the government of 200 rupees per thousand SCM something like that. So this, this was regarding the RL part but not about the domestic front. In domestic front you also you get some, you know, marketing margins on you know getting contract through APM or stpt. Am I understanding it correct? But there is a margin which has been kept by government end about 200 rupees per thousand scm.
Is it something like that?
Rakesh Kumar Jain
Actually domestic domestic gas also has two part. One is APM gas where the margin is 200 rupees per thousand scm. Another is MDP gas where marketing margin is around the line of R.
Pratyush Kamal
Got it sir. Got it sir. Okay sir, that’s all from my end. Thanks a lot for answering this question.
operator
Thank you sir. The next question is from the line of Nitin Tiari from Philip Capital India limited. Please go ahead.
Nitin Tiwari
Hi sir. Good morning. Thanks for the opportunity. So 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 Vital is supposed to start in 27, right? FY27.
Rakesh Kumar Jain
I mean it has started in 26.
Nitin Tiwari
It has started. So what is the volume guidance for marketing?
Rakesh Kumar Jain
Sorry. So volume guidance 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 here is to be end. So maybe 109, 110 mms cmd on a normative basis we should achieve.
Nitin Tiwari
So 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 food link contracts are turning out to be more favorable than hh. So are we like respecting any challenges with respect to marketing of HH contracts? And that’s why we are.
Rakesh Kumar Jain
Considering those challenge. I have not revised my marketing guidance. I have maintained the 4000 code in spite of increase in volume by 5 mm.
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
Yeah, yeah. Not we are not expecting. But I cannot give you my guidance which actually may face some challenges like this year in the beginning 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 4,000 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. So if we expect more, we expect more but. But less than let that to come. Actually we want to give you something which is certain based on today’s agents.
Nitin Tiwari
Understood. Fair enough. Answer. My second question was with respect to the petrochemical business. So I mean thanks for helping us with 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 you know, I mean to help us understand that like how that number is moving.
Satish Kumar Sinha
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. Include supply cost and distortion is pairs and other costs. So you can consider this.
Nitin Tiwari
So 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 you know consider for our understanding total cost.
Satish Kumar Sinha
Now 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 beneath from Nomura. Please go ahead.
Bineet Banka
Hi sir. Thanks for the opportunity. One question on the Fed can side. So I think ONGC has already announced charter contract for a couple of EPM carriers. And they also have an agreement with Petronet LNG for ethan handling. 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 E10 tracker? And. 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 utility 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 Vijaypur to Pata which can carry ethane. We are also evaluating for putting up a pipeline upstream to Vijaypur. And for that we have three terminals at least in west coast. In our mind that is Ajira the haze and abode. The Abol being our own terminal subject to viability, we will prefer to bring ethane at our own terminal.
Bineet Banka
Okay sir. And. And given the current margins for pet CA men and the margins in next quarter will be probably worse than what we reported in the third quarter because of higher Henrietta 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. 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, you know, fly by now, right? The player like now we are losing. We stop it now we are earning. We started. 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 Apple 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. So 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?
Satish Kumar Sinha
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?
Rakesh Kumar Jain
No, no. Right now?
Bineet Banka
No. Okay, thank you so much.
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
So 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 nine to ten thousand crore rupees of capex in financial year 27. We have two, three pipelines which are under construction. Those capex will come up like Vijayapur Oriya C2.3 pipeline, Gurdaspur Jammu pipeline. Completion of KKMBPL and Jagdishpur Haldia pipeline and the spur lines of SAPL. Second, we have also, 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 5,400 crore rupees. So large part of CAPEX will be on pipeline in 27 and even in 28. And then we also have net zero plan. 35,000 crore rupees 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 we are doing it on pure commercial basis to replace our internal uses of power which we are purchasing.
So around 2 to 3,000 crore rupees 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 CBD project projects which we are doing may involve 802,000 crore rupees of Capex. This is how we reach to 9 to 10,000 crore rupees 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 PTA will.
Rakesh Kumar Jain
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. PDHPP Gosar we expect to complete during this calendar year that is delayed, delayed as planned. We could not complete but by calendar year and we expect it to complete.
Mayank Maheshwari
Got it sir. Thank you. 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. So you had mentioned that for the Terrafike benefit which is 12% the earnings benefit you’re looking at is around 1200 crores. Now this is what you had announced when this was before the zonal tariff 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, 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.
Satish Kumar Sinha
In the current quarter I have capitalized around 5200 crores. So only balance ports on of circa is per line around 300 kilometer and some portion of from Calcutta to Haldiya and Amra to Aldiya. This will apply by June and some portion of Mumbai, Nagpur, Jasukora mainly Nagpur to Jawalpur and in Maharashtra region. So this pipeline is applied and during the by June 26th Gurdaspur Jammu pipeline will also apply so the capex is around 500 crores. So these are the capex which will apply during the coming years.
Saurabh Handa
So how much would this amount be? If you just exclude the Gudaspur demo pipeline is that another 4 to 5,000 crores of capitalization.
Rakesh Kumar Jain
2,500 to 3,000 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 hundred that we should be looking at?
Rakesh Kumar Jain
Performance related payment 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.
Rakesh Kumar Jain
100 crores around you can add 100. Crores on the incremental profit on account of PR.
Vivekanand Subbaraman
Okay. Understood, understood.
Vikash Jain
Just one more thing. So this revision of tariff. Sorry, you know 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, you know PNGRV 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
Because there is no timeline for regulator. That’s the fact. So at our part we have, we have filed the petition. At our part we will follow up for that. But the concerned amount timeline remains.
Vikash Jain
Okay, okay.
Vikash Jain
And finally I think just to kind of recap what what you were just saying to the earlier participant was so 5,400 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 Sinaji will respond.
Satish Kumar Sinha
I will give you.
Rakesh Kumar Jain
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. Srinathi will come back.
Vikash Jain
Okay. Thank you so much. 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 introduce, 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, or there there was some one question of the cast. We could not respond immediately. We, 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
Thank you, sir. On behalf of ICICI securities limited that concludes this conference call. Thank you for joining us and you may now disconnect your lines.
Satish Kumar Sinha
Thank you. Everyone.