GAIL(India) Ltd (NSE: GAIL) Q4 2025 Earnings Call dated May. 14, 2025
Corporate Participants:
Sandeep Kumar Gupta — Chairman & Managing Director
Rakesh Kumar Jain — Director, Finance & Chief Financial Officer
Sanjay Kumar — Director, Marketing
Analysts:
Abhishek Nigam — Analyst
Puneet Gulati — Analyst
Nitin Tiwari — Analyst
Maulik Patel — Analyst
Vivekanand Subbaraman — Analyst
Probal Sen — Analyst
Varatharajan Sivasankaran — Analyst
Ramesh Sankaranarayanan — Analyst
Sabri Hazarika — Analyst
Gagan Dixit — Analyst
Presentation:
Abhishek Nigam — Analyst
Good morning, everyone. Thank you for joining GAIL’s Annual Investor and Analyst Meet 2025 being organized via web conference. My name is Abhishek, and I cover the oil and gas sector at Motilal Oswal Financial Services.
Before we begin this call, a request to all the participants to please keep your video on while you are asking a question. Also a request, if you can please rename yourself so as to display your organization name during the call. This Analyst Meet was earlier to be held as a physical meet in Mumbai, but due to unavoidable reasons, had to be converted into a virtual conference.
And we are joined today by senior management from GAIL. We have with us Shri Sandeep Kumar Gupta, who is the Chairman and Managing Director for GAIL India Limited. Shri Gupta is a fellow of the Institute of Chartered Accountants of India and also a distinguished fellow of the Institute of Directors. He has wide experience of over 36 years in the oil and gas industry.
Before joining GAIL in October 2022, Shri Gupta held the position of Director of Finance since August 2019 on the Board of IOCL. As Director of Finance, he was in charge of F&A, treasury, pricing, international trade, corporate affairs and enterprise risk management. Shri Gupta is also Chairman of various other companies such as Mahanagar Gas, Brahmaputra Cracker and Polymer Limited and GAIL Gas Limited and Director on the Board of Petronet LNG Limited.
We are also joined by Shri R.K. Jain, who is Director of Finance. He is a Cost and Management Accountant by profession and joined GAIL in 1992. Prior to his appointment as Director of Finance; Shri Jain held the position of Executive Director, Finance and Accounts in GAIL. Additionally, Shri Jain holds the position of Director in Indraprastha Gas Limited, GAIL Gas, GAIL Global USA and GAIL Global USA LNG.
As ED Finance and Accounts, he headed Corporate Finance and Treasury and took investment decisions in large infrastructure projects. He will also actively involved in Investor Relations and interactions with analyst fidelity. Besides serving a long tenure at GAIL, he was on deputation to PNGRB as Joint Director, Commercial and Finance.
And lastly, we are joined by Shri Sanjay Kumar, Director of Marketing. He is a graduate in Mechanical Engineering from IIT Kharagpur and also holds a Master of Business Administration degree. He joined GAIL in 1988 and has worked across domains, including gas marketing, CGD, LNG sourcing, trading, shipping and business development.
This cross-functional and multifaceted experience has enabled him to gain deep insight on all aspects of the gas and LNG value chain. Shri Kumar has played an important role in developing GAIL’s overseas LNG trading business. He was Managing Director of Indraprastha Gas Limited, the largest CNG distribution company in India, before assuming charge of Director Marketing, GAIL.
And now without further delay, I will hand over to the management for opening comments.
Sandeep Kumar Gupta — Chairman & Managing Director
Thank you very much, Abhishek. Good morning to all my friends from research and analyst community. At the outset, my apologies for not being present physically, but you can appreciate what was the situation. Because of that, we had to call off this meeting and hold it on virtual mode. I welcome you all to the Analyst Meet of GAIL India Limited for financial year ’24-’25. We truly appreciate your taking the time to be with us.
Throughout FY ’25, we showcased the resilience and growth driven by our diverse portfolio. Despite challenges in global economy, our company had a landmark year, reaching unprecedented financial milestones and achieving the highest ever EBITDA, PBT and profit after tax in GAIL’s history. Further, improved operational performance was witnessed across all segments, barring the LHC segment owing to deallocation of APM gas.
Before going to the financials for FY ’25, I would like to focus your attention to certain key business highlights. First, successful completion of the long-awaited breakwater project has been achieved at KLL Dabhol. This marks a significant milestone in KLL’s journey towards becoming an all-weather port, which has increased GAIL’s flexibility to efficiently respond to market dynamics. We are awaiting the final confirmation, final permission, which should be available in about a week’s time. After which, this will operate during monsoon period also.
GAIL has incorporated its wholly owned subsidiary, GAIL Global IFSC Limited at GIFT City in Gandhinagar, Gujarat, which will focus on undertaking global and regional corporate treasury center activities to further expand our business portfolio and enhance financial capabilities. Furthermore, we intend to capitalize on strategic advantages in the future by expanding into ship leasing operations through this entity.
As you are aware, GAIL, along with its joint venture companies and subsidiaries, is authorized to develop city gas distribution networks in 72 geographical areas across the country. Among these, GAIL directly operates in 6 CGDs — 6 geographical areas, namely Varanasi, Patna, Ranchi, Jamshedpur, Bhubaneswar and Cuttack, which are currently in their early stages of development. In the financial year ’24-’25, these 6 GAs have shown impressive growth with volumes increasing by approximately 25%. We are constantly reviewing these CGDs to optimize costs and enhance efficiencies.
In order to have a single entity for development of GAIL’s CGD business and for bringing business synergy, efficiency and retail-focused business approach, the Board has recommended to transfer 6 geographical areas of GAIL to its wholly owned subsidiary, GAIL Gas Limited. This was approved in the Board meeting yesterday. This is subject to approval of CCEA since these 6 GAs were authorized to GAIL by CCEA.
PNGRB has recently proposed important reforms to the natural gas pipeline tariff structure, focusing on simplifying the tariff zones, capping tariff for CNG and domestic PNG consumers at the level of Zone 1 tariff and facilitating commercial viability of isolated networks through tariff rationalization. These initiatives aim to boost investment, enhance infrastructure and make natural gas more accessible across India.
Further, PNGRB has started the tariff review process of our integrated pipeline network and had hosted a PCD in this regard. We expect the revised tariff to be announced by end of current quarter. This will have a considerable positive impact on GAIL’s Transmission segment revenues as was also detailed during my interviews in the last week of March.
Now proceeding with financials; the results for quarter and year ended 31st March ’25 have been declared yesterday on 13th May 2025. For FY ’25, on a stand-alone basis, GAIL achieved gross turnover of INR136,960 crores. PBT stood at INR14,825 crores, an increase of 28% over previous year. And PAT stood at INR11,312 crores, an increase of 28% for previous year. The strong performance of FY ’25 is fueled by enhanced operational performance with Natural Gas Transmission seeing a 6% increase, Natural Gas Marketing growing by 3%, Petrochemicals achieving a 6% growth in production despite LHC production declining by 5% due to the reduction in APM gas allocation in quarter four.
On a consolidated basis, GAIL clocked a turnover of INR141,949 crore in FY 2025 versus INR1,33,130 crore in previous year, up by 7%. PBT is in — PBT in FY ’25 stood at INR16,096 crore, and PAT stood at INR12,450 crore, up by 26%.
The Board of Directors has recommended a final dividend of INR1 per equity share for the financial year ’24-’25, subject to shareholder approval at the upcoming Annual General Meeting. This is in addition to the interim dividend of INR6.50 per share declared previously. Consequently, the dividend payout ratio for the financial year ’24-’25 stands at 43.59%.
Now I would like to share the performance highlights of FY ’25. First, stand-alone. GAIL clocked the turnover of INR1,36,960 crore in FY ’25 as against INR1,30,284 crores in FY ’24, an increase of 5%, mainly on account of increase in Gas Marketing volume, increased transmission and petchem volumes and better price realization in liquid hydrocarbons segment.
The PBT increased by 28% to INR14,825 crores as against INR11,555 crores and PAT by 28% to INR11,312 crores as against INR8,836 crores in the previous year. There was an exceptional income of INR2,440 crores on account of arbitration settlement with M/s SMTS, which was accounted in quarter three of the current year.
On quarterly basis, Q4 versus Q3 of this year, the gross turnover stood at INR35,607 crore in the current quarter as against INR34,912 crore in Q3 FY ’25. The increase of 2% mainly is due to increase in sales of natural gas and petrochemicals. The PBT and PAT during the quarter stood at INR2,701 crore and INR2,049 crores as against INR5,029 crores and INR3,867 crores in Q3 FY ’25. The decrease, as you are aware, is mainly due to an exceptional income of INR2,440 crore accounted in Q3 FY ’25 towards arbitration settlement with M/s SEFE Marketing, Singapore.
Moving to consolidated financials; on yearly basis, the consolidated turnover stood at INR1,41,949 crore versus INR1,33,130 crore in the previous year — in the previous quarter, which is an increase of 7%. The PBT in FY ’25 — sorry, this INR1,33,130 crore was in the previous year and the increase is 7%. The PBT in FY ’25 stood at INR16,096 crore versus INR12,595 crore in FY ’24, which is an increase of 28%. And the PAT stood at INR12,450 crores in FY ’25 versus INR9,899 crore in FY ’24, which is an increase of 26%.
On a quarterly basis, Q4 versus Q3 of this year, the consolidated turnover in the current quarter stood at INR36,448 crore versus INR36,887 crore in the previous quarter. The PBT in the current quarter is INR3,240 crore versus INR5,272 crore in quarter three of FY ’23. And the PAT is INR2,492 crore versus INR4,082 crore in Q3 of FY’23.
I would now like to share segment-wise physical performance and the outlook for the short to medium term. Gas Marketing volume stood at 101.49 MMSCMD in FY ’25, an increase of 3% as against 98.45 MMSCMD in previous year. The increase is mainly due to increase in demand in domestic market and overseas sales. During FY ’24-’25, our Gas Marketing segment has exhibited robust performance. By clocking a PBT of approximately INR7,273 crores, including the exceptional income of INR2,440 crores, the Gas Marketing segment PBT for FY ’25 has exceeded our guidance of INR4,500 crores.
India’s natural gas market is set for a strong growth, fueled by significant infrastructure development, regulatory support and increased global supply. As per recent report by PNGRB on India’s natural gas projection for 2030, the natural gas consumption in the country is expected to reach 297 MMSCMD by 2030, assuming moderate growth. Being the dominant player in the natural gas sector, GAIL is expected to capitalize on the growing demand. And to cater this demand, GAIL intends to source another 5 to 6 MMTPA of LNG from different geographies by 2030.
We are confident that in the current financial year, our Gas Marketing segment will generate a minimum of INR4,500 crore in profit before tax. Additionally, we are actively pursuing short- to medium-term tie-up with customers, which will further enhance our profitability. Moreover, we will implement our — all possible measures to optimize and improve efficiency within our Gas Marketing portfolio. Now INR4,000 crore when I’m saying, I maintain the band of INR4,000 crore to INR4,500 crore, which band we had given to you in the earlier meetings.
Coming to Natural Gas Transmission, volume for FY ’25 stood at 127.32 MMSCMD as against 120.46 MMSCMD in previous financial year. The capacity utilization was approximately 61% in our natural gas pipelines. The increase in transmission volume is attributed to increased domestic consumption. We expect that Gas Transmission volume will be approximately 138 MMSCMD to 139 MMSCMD during FY ’25-’26.
As already informed, the tariff review for GAIL’s integrated network is in progress, which is expected to be implemented in FY ’25-’26. And this is expected to have significant positive impact on GAIL’s transmission revenue. Coming to polymers; overall production of 827 TMT was achieved in FY ’24-’25, which is 102% of the capacity utilization. In petrochemicals, we closed FY ’24-’25 almost at breakeven levels despite increased input costs and distress on petrochem prices.
During FY ’25-’26, GAIL will continue to take various optimization measures to optimize and improve efficiency in petrochemicals and run the petrochemical plant at full capacity. It is expected that GAIL will make reasonable profits in PC segment during FY ’25-’26, provided the prices are favorable, both of the input as well as output.
Coming to LHC, the production was down by 5% as compared to previous year and stood at 947 TMT as against 996 TMT in the previous year. The capacity utilization was approximately 66%. The decrease is attributed to deallocation of APM gas for LPG production with effect from 16th January 2025.
In addition to various optimization measures taken to protect the margins, the matter was taken up with MoPNG for restoration of allocation of APM gas. And the wide order dated 18th April 2025, MoPNG has allocated new well gas of approximately 0.32 MMSCMD to GAIL for LPG production. This has restored the reduction in APM allocation by approximately 50%. We expect good margins and improved production from this segment in FY ’26.
LPG transmission volume increased to 4,478 TMT as against 4,396 TMT in previous quarter, and this was highest ever LPG transmission by GAIL. CGD, according to a recent report published by PNGRB, the CGD sector is anticipated to be the key driver of growth with consumption expected to increase 2.5 times to 3.5 times by 2030 and 6 times to 7 times to 2040 from the baseline of approximately 37 MMSCMD in FY ’24, reflecting a CAGR of around 15% and 12%, respectively.
For the GAIL Gas Limited, a wholly owned subsidiary of GAIL, which was incorporated in May 2008 for developing city gas distribution business as its focus area, GGL currently owns and operates 16 GAs across India and have 9 others as their JVs. During the current financial year, that is FY ’25, GAIL Gas Limited’s turnover stood at INR12,231 crore as against INR10,944 crore in FY ’24. PBT increased by 42% and stood at INR615 crore as against INR434 crore in FY ’24. And PAT was up by 40% and stood at INR451 crores as against INR323 crore in FY ’24.
During the current quarter, that is Q4 FY ’25, GAIL Gas Limited’s turnover stood at INR3,051 crore as against INR3,043 crore in Q3 FY ’25. PBT decreased by 7% and stood at INR144 crore as against INR155 crore in Q3. And PAT was down by 8% and stood at INR102 crore as against INR114 crore in Q2 FY ’25 — Q3 FY ’25. In the next two years, GAIL Gas targets to add around 255 new CNG stations and approximately 3.09 lakhs new DPG connections.
As regards Bengal Gas Company Limited, I just wanted to inform you that this pipeline has been completed and gasified by GAIL till tap-off point for Kolkata connectivity, GAIL has got the PESO approval on 26 November ’24 for the stretch Durgapur to IPA and CGS Kolkata. Further PESO approval from GAIL terminal at IPA to Bengal Gas CGS is received on 28th February 2025, and it will take about one to two months for BGCL to complete the construction work on its part before it starts taking gas for Kolkata.
The status of some of the ongoing projects. First, pipeline projects. I’m glad to inform that majority of the pipeline projects, namely Mumbai-Nagpur-Jharsuguda-Jabalpur Pipeline, Jagdishpur-Haldia-Bokaro-Dhamra Pipeline, Kochi-Koottanad-Mangalore-Bangalore Pipeline and Srikakulam-Angul Pipeline are scheduled to be completed in current financial year, that is ’25-’26, whereas Gurdaspur-Jammu Pipeline is scheduled for completion in FY ’26-’27. Dhamra-Haldia and Durgapur-Haldia Pipeline section of JHBDPL are pending for commissioning and expected to be commissioned by 31st December ’25.
In petrochemical projects, again, I am glad to inform that all the three running petrochemical projects, that is 60 KTA polypropylene plant project at Pata, 500 KTA PDH polypropylene at Usar and 1.25 MTPA — PTA projects at the GMPL Mangalore are scheduled to commission in the current financial year. In fact, Pata PP should happen very soon.
Coming to capex for FY ’25. During the year, a capex of INR10,512 crores was incurred. Out of which, INR2,200 crore approximately is on pipelines, approximately INR2,700 crores is on petrochemicals, approximately INR3,000 crores is on leasehold assets. Operational capex is of around INR1,600 crores, and the balance is towards net zero renewables, CGD, E&P, equity contribution, et cetera.
That’s all from my side regarding the overview of the performance and projects. The management of the company is available, and we would be glad to clarify on any questions that you may have.
Over to you, Abhishek. Thank you very much.
Questions and Answers:
Abhishek Nigam
Great. Thank you so much, sir, for the opening comments. Very insightful. We will now start the Q&A session. [Operator Instructions] So we have the first question coming in from Puneet Gulati. Puneet, if you can unmute and ask your question please.
Puneet Gulati
Yeah, thank you so much. Congratulations on good numbers. My first question is on your Gas Marketing business. The first part is when I look at the consolidated piece for this quarter, there is an INR1,500 crore income versus stand-alone of INR1,200 crore. What is that INR300 crore attributable to? And secondly, your guidance of about INR4,500 crore, do you see any sort of risk to that given what’s happening with crude and Henry Hub? Or do you think this is a locked-in number for the full year? Thank you
Rakesh Kumar Jain
So it’s GAIL Gas, which we have incorporated line by line. That’s the difference.
Puneet Gulati
Okay. So it’s — and that’s not captured in the CGD business there?
Rakesh Kumar Jain
Actually, this year, we have regrouped Marketing and CGD business of GAIL Gas. Earlier, it was getting depicted in CGD. So we have regrouped and bulk sale, we have considered in Marketing.
Puneet Gulati
Understood. That’s very helpful. The second, on your guidance for INR4,500 crore of marketing, I mean, is there any risk? And how should one think about the volatility in Brent and Henry Hub impacting the business or have you locked it — this number for the full year?
Sandeep Kumar Gupta
So while risk is there and the risks were there in the current year also and even the previous years, but we are confident that with our portfolio, which is well diversified, both oil-linked as well as HH-linked, I think we are pretty sure that we will be maintaining as per our guidance of INR4,000 crores to INR4,000 crores in the coming years also.
Puneet Gulati
Understood. And lastly, if you can talk about where is the additional volume growth coming for your Transmission business?
Rakesh Kumar Jain
Okay. Yeah. So Chairman sir has, during his opening remarks, stated that we are expected to transmit on an average basis, 138 to 139 MMSCMD. And we expect this volume — natural growth of CGD business, which we expect around 5 million increase will happen. On country level, it will be more. But since our share is around 70%, so we expect naturally that volume will come from there.
IOCL Barauni 1.38 MMSCMD, then Paradip 2.35 MMSCMD. IOCL Haldia 0.5, IOCL Bongaigaon 0.2, Guwahati IOCL 0.2, IOCL Panipat, requirement of 1.79 MMSCMD during ’25-’26. Earlier there was a requirement 1.3, we decreased it to 1.79. So 1.79 from this. So these are the areas from where we expect that these volumes will come. Apart from the commissioning of new pipeline, as Chairman stated, Mumbai-Nagpur-Jharsuguda, Srikakulam-Angul, there, certainly, we’ll be having more customers.
Puneet Gulati
Understood. That’s very helpful. Thank you so much.
Operator
Great. Thanks, Puneet. We have the next question from Nitin from PhillipCapital. Nitin, please ask your question.
Nitin Tiwari
Hi, good morning. Thanks for the opportunity, sir. Sir, my question is related to your Transmission segment. In this quarter, we had a drop of about 5 MMSCMD versus the previous quarter. So if you can help us understand that why that decline in volume was there.
And then when we see the guidance for basically FY ’26, you’re talking about almost like an 18 MMSCMD increase [Indecipherable] where we have exited quarter four. So I mean, like in the backdrop of the volume decline that we have seen in this quarter, does our guidance stand? And then basically, in addition to that, how is the first quarter going for us as far as transmission volume is concerned?
Rakesh Kumar Jain
Actually, I understand you’re asking regarding transmission volume. We have given guidance of 130 — 129 to 130 MMSCMD during last earning call. Based on our assessment, that will be somewhere around 129 to 130 MMSCMD. And on a yearly basis, we are less by 2.5 MMSCMD even if we consider the 130 MMSCMD.
And the — this particular quarter you are talking about, there is certainly a drop of 5 MMSCMD. Largely, it has come down 3 million volume of shippers has come down. IOCL 1.5 and BPCL 0.8. And this is coming down because they have shifted to liquid fuel because this quarter, there is a drop in price of liquid fuel, so they switched over.
And in our marketing volume also, there is a drop. TFCL was down during January ’25. And also, there were unplanned shutdown by HURL, Phulpur, RCF, Thal. These all totaling led to volume of 4 to 5 MMSCMD if you compare with quarter three of this year. So these are the specific regions, unanticipated shutdowns by fertilizer plant, and shippers volume came down because of the reduction in the crude price.
Nitin Tiwari
Great, sir. That’s.
Rakesh Kumar Jain
And sorry, Chairman also just reminded me. The GIGL volume also got shifted because we were supplying to Panipat refinery through our pipeline and then PNGRB in between authorized GIGL. And from January onwards, that volume also got shifted to GIGL pipeline.
Sandeep Kumar Gupta
And our appeal is pending.
Nitin Tiwari
Yes, sir. So basically, just a clarification on that. So how is our first quarter volume going? That is one. And secondly, when Chairman sir pointed out like our volume guidance, then I think IOCL Panipat was also included in that guidance. So I mean, given that now they have shifted to GIGL, so I mean does that guidance continue or do we have to like take that out from our volume assumption?
Rakesh Kumar Jain
No. When Chairman gave guidance, GIGL volume, we have not considered.
Nitin Tiwari
So there was a volume number given off of Panipat refinery, right, which is there in the guidance. So that is the volume which is getting carried in GIGL’s number, I suppose.
Rakesh Kumar Jain
Yes, yes. We have not considered.
Nitin Tiwari
And sir, how is the first quarter going, I mean, this quarter?
Sanjay Kumar
Some plants are presently having planned shutdown. And the power demand, which was expected last year, it was very heavy power demand in May. That demand is slightly muted. So we — presently, we are within 125 — 122, 125, 127 MMSCMD zone. But we hope to pick up on this transmission volume very shortly as soon as the maintenance is over. And we expect some power demand also to come next — by next week.
Sandeep Kumar Gupta
And as mentioned by DF that certain plants will start taking gas as soon as the connectivity to them is completed. So perhaps the first quarter itself may not be a sufficient guidance for the full year volumes.
Sanjay Kumar
So what my CMD is telling, this all is about the pipeline groups in the Eastern India, JHBDPL and the Barauni-Guwahati section going up to Guwahati, all — many consumers are getting ready there. And in a short time frame of one or two months, a lot of transmission volume may come up.
Nitin Tiwari
So we expect like by the end of this quarter or perhaps in June, July, more volumes should pick up. That’s the right summary, sir?
Sandeep Kumar Gupta
Yes. Yes.
Nitin Tiwari
All right, sir. Thanks so much for the answer, sir. I’ll get back in the queue.
Operator
Great. Thank you so much. We have the next question from Maulik Patel. Maulik, please go ahead.
Maulik Patel
Yeah, hi. Am I audible? Thanks, Chairman. Thanks, Director, Finance and Marketing for the opportunity. A few questions. On the capex side, what is the guidance which we are giving for FY ’26? And given you’ve a couple of large projects, particularly petchem, we are finishing the capex this year, almost around INR18,000 crore to INR20,000 crore of capex, which we planned a couple of years back. And since it is Mumbai-Nagpur pipeline and others are getting complete, in future, is the capex is going to shift more towards net zero and renewable side?
Rakesh Kumar Jain
Actually in year ’26, we expect to have capital expenditure of around INR10,000 crore. And largely, it will be on petrochemical and pipeline, around INR3,000 crore each. And then net zero, as you also stated, more than INR1,000 crore. And operational capex, we incur every year around INR1,500 crore, INR1,600 crore will be around that. And then city gas distribution and other small, like, LNG and CBG projects.
Maulik Patel
Sir, any update on that MP capex? Sorry, please.
Sandeep Kumar Gupta
And you are correct that most of our petrochemical projects and pipeline projects are getting completed within this financial year, that’s ’25-’26. So we have — besides the capex, which DF mentioned on renewable net zero initiatives, we have sought authorizations on — of several pipelines which are pending along the East Coast of the country and several others, which were not completed by other entities. And hopefully, we should get those authorizations on nomination basis. And we expect that our capex pipeline will be strong in executing those pipelines in future. You asked about MP.
Maulik Patel
Got it, got it. And any update on the MP?
Sandeep Kumar Gupta
Yeah. Yeah, we have not yet decided on that particular project still. We will inform you in due course of time.
Maulik Patel
Yeah. Sure. Sir, second question is on the marketing side of LNG. And — see, in the country, including you, IOC, GSPC, Arcelor, HP, they’ve all done somewhere around 6 million to 7 million tonne of medium-term LNG contract linked to the HH and oil, which most of them will start — some of them will start in this calendar year. So many of them will start in next calendar year. Now that — if I look at this combined volume of all those — this medium-term contract can be in the range of around 25 to 27 MMSCMD. My question is that, will this expand overall TT, which the country currently has or a lot of this volume will just replace the spot in the market, which is we import approximately about 7 million, 8 million tonne of spot LNG in the market. Will that replace a lot of spot or it will actually expand the TT?
Sanjay Kumar
It’s a very important aspect of the market — gas market in the country. We believe market is actually in evolution. And this is the process where we used to have three or four importers up to 10 years ago. Today, we’ve got about 12 importers who are importing LNG cargoes into the country. Most of these importers are actually working on new projects also, whether it is AMNS, they have already started another project in the Eastern side, I think Paradip or some other place, or Deepak Fertilizer, which signed another medium-term contract that you were referring to.
Everybody is actually trying to invest in a new facility and for that, they are sourcing some niche contracts. There are certain initiatives that they are taking, whether they’ll be able to manage those volumes or not, but they have taken that plunge, and this is the way the market develops.
At GAIL, we take pride in the way we have developed the systems here. We are the torchbearer in this field. We do — whatever we do, others follow in three months, 6 months, one year, three year, 5 year. We did a 5-year transaction, which you referred to, we started the supplies — receiving supplies last month. Others have now come up with a similar structure. We believe this will expand the market. The consumption of gas in the country will grow on account of these new contracts.
Sandeep Kumar Gupta
And to add to what Sanjayji has just mentioned, I believe pointedly on your question, it is both. It is replacement of spot volumes because of the volatility, which has been seen in the past. So everybody wants to have a sort of certain price. And it is also to take care of the growth, which is expected in the country. So it is both.
And the logic perhaps of the short-, medium-term contracts is that everybody is perhaps wanting — waiting to see more and more liquefaction plants coming in the U.S. and the global growth, which perhaps will then have some effect on the price levels and the formulas also.
Maulik Patel
Got it. Sir, just last question. This is on the petchem side. Given that the spread has been very weak in the last 1, 1.5 years and the price of the — most of the petchems are at multiyear low, and our big capex is also getting commissioned in this financial year, do you think that this capex commissioning will probably — or number one, at the operational level, do you expect to make it a breakeven on these current prices or the current spread? And second question is that how much time you’ll require to ramp up those — the facilities, particularly on the PDH side, which will probably commission in the next two, three quarters?
Rakesh Kumar Jain
There is a difference between the Pata Petrochemical and the PDH-PP you’re referring to. PDH-PP is propane-based facility. When we took the decision for putting this plant, we did this analysis for past several years, and we found that there is a good correlation between the propane as input and PDH-PP as an output. So the spread we envisaged at the time of envisaging the project, we recently did that our analysis, still it holds good.
So it is not going to be similar situation, which is you are experiencing in Pata wherein gas price goes up and petrochemical price goes down, and we expect those correlation in terms of the propane and PDH-PP price will continue to happen. And in terms of our capacity expansion, the first year, we expect that plant to run after commissioning maybe for 60%, 70% level of capacity. And then second year, maybe around the 90%, and then it may be at full capacity. That’s the normal trend of any process plants.
Maulik Patel
Yeah. Thanks. Thanks for answering my question. Wish you good luck.
Sanjay Kumar
You were asking about the ramp-up. We believe that the production of PP in the country in this financial year would be about 7.9 million tonnes, and the consumption would be about 8.2 million tonnes. So there is real scope for the plant to ramp up. Our plant will be commissioned this year. And we hope to achieve full load after the usual teething period of 3 to 6 months.
Maulik Patel
Thank you. Thank you very much.
Sandeep Kumar Gupta
And the profitability metrics of our current petrochemical capacity is relevant only for the 60 KTA addition at Pata. 500 KTA at Usar, we have just explained that propane is the input there. And at Mangalore, 1.25 MTP is a new product altogether PTA.
Maulik Patel
Yeah. Got it, sir. Thank you very much and wish you good luck, sir.
Operator
Great. Thank you so much. We have the next question from Vivek. [Operator Instructions]
Vivekanand Subbaraman
Thanks. Sure. Thanks for the opportunity. Thank you management for the chance. So number one is on the CGD sector. Now the PNGRB’s scenario analysis presents the CGD sector as one of the key drivers of demand growth, and they are very bullish. They are projecting 2 times to 3 times demand from the CGD sector between now and 2030. My question is, how confident is the management of this demand projection given that there has been some challenge in the increased input costs?
And secondly, there’s also pressure from authorities, especially in the northern part of the country to push for electrification mandates. In that light, what is your sense of the realistic volume growth rate that CGD can deliver and, therefore, drive overall gas demand growth? I’ll ask the second question after this answer. Thank you.
Sanjay Kumar
The market is so big that EV push that you are referring to — possibly you are referring to Delhi, DTC, et cetera, and the new registration rules, the draft rules that they are — they have given out. We believe CGD sector is because of the reach, because of the 307 geographical areas that we have, that PNGRB has authorized, the demand in the country in CGD sector would definitely double or more than double in next 7, 8 years.
The current consumption in CGD sector is about 42 million cubic meter per day, and it can easily reach 100 million cubic meter per day because the EV would not affect the market. And the market is so big. The need for transportation is there. CGD will play its own role. EVs will play its own role. LNG as a fuel would also — for heavy-duty vehicles, would play its own role. So one or two EV push in one or two would not affect the growth of CGD segment in the country. That’s our view.
Rakesh Kumar Jain
Let me supplement our Director Marketing. The pressure will not be on gas-based vehicles. It will be — pressure will be on the other fossil fuels like petrol and diesel, in particular, diesel. So that’s not a concern. And second in terms of — in order to give boost to this growth, there have been a lot of actions being taken place on ground, like Chairman during opening remarks said that the PNGRB is also looking for reducing the tariff for city gas distribution network companies from to John 2, John 3 to John 1. That will certainly help in input pricing. And we also expect that as the business — as we are moving forward, the gas will also come under GST. These two will certainly take care of their input cost even if they have to compete with other fossil fuel.
Vivekanand Subbaraman
Okay. Thank you. That’s very helpful. Just one small follow-up. You’ve been talking about natural gas inclusion under GST. Is there any update to share in that regard? And any expectation on what the rate would be and how it would alter the demand scenario?
Rakesh Kumar Jain
Yeah. Thanks. So any update on in terms of rate is difficult, but we expect the gas will come very soon in GST. That’s what we hear from the policymakers and power corridor.
Sandeep Kumar Gupta
A couple of years back, a consultant had suggested a revenue-neutral rate of around 12% for GST to come for natural gas. And in addition, pending GST, you may be aware that several states have reduced the VAT rates on CNG, namely Andhra Pradesh and Assam, which comes to my mind immediately.
Vivekanand Subbaraman
Yeah. Right. My last question is on the volume that got shifted to the other pipeline, the GIGL pipeline that got authorized. Would it be possible for you to comment on the volume shortfall that you’re facing because of that? And by when do you expect a favorable resolution on that front? And is this number part of your FY ’26 guidance?
Sanjay Kumar
This matter is subjudice and this — well, we have — in our recent analysis, we have taken away this volume from our guidance.
Vivekanand Subbaraman
Okay. And how much is the volume, sir?
Sanjay Kumar
See, it used to be 5 million to 5.5 million cubic meter, which used to — we used to transport that to Dadri. That has now reduced to about 2.5 million to 3 million cubic meter per day. It will go down further. It may go down further.
Vivekanand Subbaraman
Okay. Thank you very much.
Sanjay Kumar
It’s a complex contractual arrangement actually, which cannot be explained. There are some other details also in this regard.
Vivekanand Subbaraman
All right. Thank you so much for the clarification. All the best.
Operator
Yeah. Great. So we have the next question from Probal Sen from ICICI Securities, please go ahead.
Probal Sen
Good morning, sir. Thanks for the opportunity. A couple of questions. Firstly, on the petrochemical business, you did mention about the pricing weakness that has been one of the drivers of lower profitability. But if I look at the current quarter, pricing, at least on a Q-o-Q basis, seems to be flattish. It is more the increase in costs that has led to the decline in profitability, at least in Q4.
So I just wanted your perspective on how you expect this to change. Even if pricing were to remain, let’s say, flattish, can we expect any delta — positive delta in terms of costs, given that we’ll have a much larger capacity to play within the next couple of years? And what impact it can have on costs and whether there are any sourcing cost advantages also because of the additional LNG volumes that we are seeing now? Just your comments on that. That’s my first question.
Rakesh Kumar Jain
[Technical Issues] still the input cost has gone down. As you must have followed that during quarter four, the Henry Hub price, which gas we have allocated for Pata plant, the most of the volume Pata plant consumes belongs to Henry Hub category or index based. So that Henry Hub price has gone down abnormally. If you compare this year, largely, it remains around $3.5 to $4 per MMBtu, which was almost 50% last year. So we believe that the prices at this level are not going to continue. It’s already started softening. So that will certainly help us in reduction or managing the cost for Pata even if the output price remains the same.
Probal Sen
Okay. And so right now, in terms of the gas that is being allocated or the costs being allocated to petchem is almost entirely benchmarked to Henry Hub. Is my understanding correct?
Rakesh Kumar Jain
Not entirely. Most of the volume are Henry Hub linked. And we optimize time to time, but most of the volume we are giving Henry Hub-based volume.
Sanjay Kumar
So it’s an operational matter actually. We look at the cargoes and we — the optimum solution is provided for our petrochemical plant.
Probal Sen
Understood, sir. Understood. The second question was with respect to the gas trading business. You gave a guidance what you have mentioned, of course, of 138 to 139 MMSCMD in terms of transmission volumes. So should we infer that Gas Marketing volume should sort of grow in tandem? If I take the same sort of correlation with 127 MMSCMD being transmission, we did about 101-odd MMSCMD in trading. Is that a similar sort of volume we should look at for FY ’26?
Sanjay Kumar
Marketing separately. In transmission, our guidance is 138 million, 148 million, 159 million cubic meter per day in next three years. In marketing, Gas Marketing, we expect to do volume of 108 million, 114 million, that is 113.7 million and 120.3 million. These are our marketing projections.
Probal Sen
Sir, with this kind of a growth, I understand that you’re reluctant to give more specific guidance, but INR4,500 crore, can we just assume that on the line of what has happened in the last couple of years, this is an absolute bear case for a very conservative guidance in terms of profitability from this segment?
Rakesh Kumar Jain
Let me take this question, Probal. We have been given the guidance what is possible at a minimum. If you have followed last three years’ guidance, we gave INR3,000 crore. We surpassed that. Then we gave INR4,500 crore. We achieved almost INR6,000 crore. Last year, we gave guidance initially INR4,000 crore to INR4,000 crore. And again, we surpassed this guidance to INR4,800 crore. That’s the history. And we continue to give you guidance. This is possible. So Chairman, in opening remarks, said INR4,000 crore to INR4,500 crore, and we expect that to be achieved.
Probal Sen
Understood, sir. The last question, if I may squeeze in.
Abhishek Nigam
Probal, do you mind coming back? I’m so sorry.
Probal Sen
Okay, fine, fine. We have a long queue. I’m so sorry.
Abhishek Nigam
Thanks. Yeah, yeah.
Operator
Thanks. So next question is from Varatharajan from Antique Securities. If you can go ahead
Varatharajan Sivasankaran
Thanks Abhishek and thank the management for the opportunity. Yes. So if you can provide the GAIL Gas and the 6 GA volumes and the breakup in terms of CNG and other gas, please? Are you audible?
Operator
Yes, yes
Rakesh Kumar Jain
[Technical Issues] CMD during last year in GAIL Gas, right? And the — if you are in breakup, the bulk trading was 4.37 MMSCMD, supplies to Taj Trapezium Zone on unified price basis, 1.27. And then PNG and CNG 1.67 put together. These are three segments: PNG CAG 1.67, Taj Trapezium Zone 1.27 and 4.37 bulk trading.
Varatharajan Sivasankaran
This is for full year or 4Q, sir?
Rakesh Kumar Jain
Sorry.
Varatharajan Sivasankaran
This is for the full year or the fourth quarter?
Rakesh Kumar Jain
Full year, full year. If you are interested in Q4, I can give that also. So full year quarter four, the PNG and CNG were 1.81. The Taj Trapezium was 1.34 and bulk trading 4.18. Total 7.33. It is almost in the same range.
Varatharajan Sivasankaran
And this includes the 6 GAs as well?
Rakesh Kumar Jain
This is not including 6 GAs. Six GAs is still with GAIL. So that volume will be shifted — added when — as and when it is actually part of GAIL Gas. Today, it is not.
Varatharajan Sivasankaran
Okay. In case you have those numbers, if you please share that?
Rakesh Kumar Jain
So currently, sorry.
Sanjay Kumar
Six GAs of GAIL, we are marketing about 0.4 to 0.45 MMSCMD of gas there. During Kumbh, we had the opportunity of marketing 0.5 million cubic meter also on many days. And our outlook is that these particular geographical areas would grow by about 25% volume every year, the 6 GAs. In due course, as my CMD announced, this may be — this will be merged with GAIL Gas, but the volume projections are like that.
Varatharajan Sivasankaran
Fair enough, sir. Out of the 0.4, what would have been the CNG, sir?
Sanjay Kumar
CNG is about 0.31, 0.3 — 0.3 to 0.33, 0.3 — between 0.3 to 0.35 MMSCMD is CNG.
Varatharajan Sivasankaran
Thanks. Good enough. My second question is on the trading business. One is that like the shift to gas-linked contract from oil-linked contract last time you had highlighted like it is going on. What would be the proportion now? And are we really targeting 100% complete shift?
Sanjay Kumar
No, we have a very good balance of different kind of contracts. We are — having Brent is — was — used to be our main LNG index. Presently, as Indian crude basket, some sort of proxy of Brent is being used in the country also. And about more than 20 million — 22 million cubic meter per day of gas that we receive is based on Henry Hub index. We have also done some additional contracts on Henry Hub index. We believe in maintaining balance between HH index and the crude oil index.
Varatharajan Sivasankaran
If possible will you be able to share that number, sir?
Sanjay Kumar
We do not plan to shift completely to gas-based index. That is what.
Varatharajan Sivasankaran
Fair enough. Sir, would you have the proportion currently? Would that help? Would that be available?
Sandeep Kumar Gupta
Mr. Varatharajan, but I fail to understand, do you believe that perhaps we should move away from one particular index and do.
Varatharajan Sivasankaran
No, no. Definitely not, sir.
Sandeep Kumar Gupta
Because I always felt that perhaps we have a great portfolio of having different linkage gases.
Varatharajan Sivasankaran
Just to put that into context. Basically, we are only concerned about the variability in terms of the Henry Hub price movement direction vis-a-vis the crude price movement direction. So if you remember, history suggests that like at some point in time, you had a problem, basically because the crude prices have fallen very sharply, and hence, we had losses. Ultimately, we also made significantly higher profits when we had the crude prices remaining higher. So we just want to understand what is the exposure in terms of that risk and accordingly take a call on that. That is all we wanted to understand. Definitely, not advocating one way or the other.
Rakesh Kumar Jain
Varatharajan, this question we have been answering in almost every earnings call. We have a portfolio of almost 21 MMSCMD linked to Henry Hub. This has been a concern, not today, maybe three years back. Now almost 19 MMSCMD of volume, either we have marketed on back-to-back basis or allocated to Pata. So that volume does not have any risk with respect to the change in prices with respect to crude.
Two MMSCMD volumes, certainly, we have open available with us, and we have good risk managing capability. Recently, when the Henry Hub price went up and crude price went down, we took swaps. And that’s how we locked our margins. So even for the volumes, we market on an index different than this, we have an ability to lock the margins. So largely, this volume is marketed on same index. Therefore, the — you can see that the volatility is not coming.
But volatility is coming because — not because of this. We have one more contract, which has 9 months on sourcing side and three months average on marketing side. And there, we face cash flow issues. So we have cash flow in terms of positive cash flow, more than $2 and $2.50 some point of time when the prices were moving differently. So that is sometimes bring the volatility, but that should not concern you because we are — that’s a cash flow issue. So if you are not getting this year, certainly, you will get next year because average has to come to the same level if you match that. So that is not an issue today. And in terms of the question you asked, what is the percentage? We have almost 43%, 44% based on Henry Hub.
Varatharajan Sivasankaran
That’s very useful, sir. Thanks a lot.
Operator
Great. Thank you for that. So we have the next question from S. Ramesh from Nirmal Bang Equities.
Ramesh Sankaranarayanan
Thank you very much. So if you look at your guidance for marketing segment EBITDA, can you share what is the kind of assumption you’re making for Henry Hub gas price and Brent crude. There’s an impact [Technical Issues] talking about Henry Hub going past $4 because of the demand for gas for the LNG [Indecipherable]. So what is your underlying assumption for Henry Hub gas price and the Brent crude price?
Rakesh Kumar Jain
I just answered to the question of Varatharajan that Henry Hub price is almost not a part of this computation because we have marketed on same index. Only around 2 MMSCMD volume is open. So whatever Henry Hub price remains, we have sold to the customer on same index, that’s the pass-through price.
Ramesh Sankaranarayanan
Okay. And second thought is on the Dabhol LNG terminal. With the breakwater coming in, can you share what will be the ramp-up in volumes and the impact on profitability for Konkan LNG?
Sanjay Kumar
Last year, last financial year, about 21 cargoes were regasified there. This year, we expect, as my CMD informed you, that we are hopeful that the certificate will come within one week. So we expect to do about 34 to 36 cargoes this financial year in this terminal.
Ramesh Sankaranarayanan
So would that help you make profits there? What is the current trend in profitability there?
Rakesh Kumar Jain
Current year, we did not have the positive profit certainly because we imported — we regasified only 21 cargoes. But as we move to 34 to 36 cargoes, almost 15 cargoes if added, then it adds to the bottom line almost INR300 crores. So this year, certainly, we were not in positive because of the breakwater issue. But going forward, we will have positive bottom line from this KLL.
Ramesh Sankaranarayanan
Thank you very much.
Operator
Great. Next question is from the line of Sabri Hazarika from Emkay Global.
Sabri Hazarika
Hello. Yeah. So just one question. So if I look into your tariff outlook, so we have this upcoming tariff hike. But beyond that, also, there are certain events like probably some of the new pipelines getting connected to the integrated network and also volumes flowing through the bid-out pipelines where I think the tariff levels are much higher. So do you see blended tariff trajectory also to continue growing for the next three, four years or do you see it more to be stable in current scenario? Thank you.
Rakesh Kumar Jain
You’re asking of unified tariff or integrated tariff?
Sabri Hazarika
Integrated tariff for GAIL. I think I’m not sure if the Barauni-Guwahati line has been like included there and also Kochi-Bangalore line once it gets commissioned, I think that will also be formed part of integrated tariffs. So net-net, do we see the blended tariff going up by these events and also some color on the bid-out pipelines? Thanks.
Rakesh Kumar Jain
It does not include the KKBMPL pipeline. Barauni-Guwahati is part of integrated tariff, but it does not include the KKBMPL pipeline and — because it is not yet connected with Bangalore. So once it gets connected, it will form part of integrated tariff, and it will certainly significantly add to the bottom line for GAIL. That is one part.
And second, you were asking what are other factors. So our tariff already we have submitted, and that is under revision. And once the tariff is revised, we expect the integrated tariff to go up from, say, current level of INR58, we have submitted INR77, even on conservative side, we consider INR70, INR72, that also another increase, which is available.
And third increase is that — and now we are actually moving from utilization of this pipeline from the level around 70%. As we move from 70% to 75%, and we expect this to be available during financial year ’25-’26, then we have ability to recoup our lost volume from December ’22 because regulatory provision is that whatever volume we have not — whatever pipeline capacity we have not utilized for last past years from the regulatory change, which has happened in December, we will have ability to recover those losses in future years. So as we are growing in transmission, so our ability to have more than regulatory rate of 12% will increase, and that we expect that this will happen from at least financial year ’26-’27.
Sandeep Kumar Gupta
Does that answer you or you wanted some more information?
Sabri Hazarika
Yeah, that answers my question. Thank you so much and all the best. That’s okay.
Sandeep Kumar Gupta
Abhishek, you’re not audible.
Operator
Great. Thank you, Sabri. Great. We will take one last question from Gagan Dixit. Gagan, please go ahead.
Gagan Dixit
Yes, sir. Thanks for taking my question, sir. I broadly want to know, sir, the reason for the normalization of the marketing EBITDA quarter-to-quarter, because I recall this December quarter, you said that if I remove the exceptional, so there are around INR6 billion is the — that ends at EBITDA. And you broadly said three, four reasons that time that higher Henry Hub prices, crude LNG sourcing was 9_month average versus the selling price 3-month average, and you sold more than the contracted amount. So I think what are changes that happened actually to the — I mean, you have done some repricing or done more hedging or something changes to our customers. Something broadly if you can explain the reason for the quarter-to-quarter normalization.
Rakesh Kumar Jain
Shared that why our marketing margin had gone down, and you have covered all those regions that, one, we were overcommitted in the market. Normally, we expect the customer not to take at 100% level, but sometimes we experience that. And last quarter had seen those — we experienced those things, and that led to a reduction in marketing margins. Second, you also covered the 9 months average versus three months average. And third, we also had some Henry Hub exposure. When crude goes down, those were also impacting.
But this situation reversed during this quarter. The crude prices has recently gone down, but were almost in last — quarter four was not that — drop was not there. So whatever significant amount we lost in Q3, this was not the case. And the volume which we actually committed — overcommitted, those experiences also we did not see in this quarter. Therefore, we arrived at a normative level of marketing margin, which is around INR1,000 crore to INR1,200 crore. That’s what we have seen in this quarter.
Gagan Dixit
Yes. And sir, my second question is that you have given the marketing guidance of around 108 MMSCMD or 107 MMSCMD growth in the FY ’26, and then 112 MMSCMD growth over the next two years, from ’26 to ’28. If I do the math, so this is equivalent to this year almost 2 million tonne LNG. And then after that, for two years, it’s a 3 million tonne LNG. So can I safely assume that this is something LNG contracts that you are confident that you are able to get? I mean 2 million tonne around this additional and then 3 million tonne from ’26 to ’28?
Sanjay Kumar
Part of that volume, we have already sourced. So — and going forward, we continue to work on the market on a weekly basis. Whenever there is an opportunity, we would source those volumes. Our guidances are on. The volume of 108 million that we are expecting this year will materialize. And there are LNG contracts — the LNG contracts is one way of doing it. There may be other ways also.
Gagan Dixit
Yeah. Yeah, that’s from my side. Thanks.
Abhishek Nigam
Thank you so much. That will be the last question for today due to time constraints. So any closing comments before we end this call?
Sandeep Kumar Gupta
Yes. Thank you very much to all the participants. Ultimately, I want to say that transmission remains our biggest bet. And with increased transmission volumes supported by the growth in the country, commissioning of the new pipelines, connection of the new plants with the grid and revision in the tariffs of our integrated pipelines as well as the changes in the regulations, which will also give us additional support for the isolated networks, this transmission income is the biggest bet. And also, I believe our diversified portfolio in terms of price is very helpful for us to sort of attain the guided numbers on the marketing margin side. And we remain very confident.
As far as petrochemical prices are concerned, while we do not see very great upside even if the prices are favorable, at the same time, we do not see a very major downside also in petrochemicals. It may largely be range bound and that does not, in any case, impact, largely, on the profits because that is a miniscule component of our total game.
So I’m very confident that from these levels, after attaining this highest level profit in the history of GAIL, while this was also supported by a onetime settlement from GMTS in quarter three, but I’m confident that we’ll be able to maintain this performance in all times in future. Thank you very much.
Abhishek Nigam
Great. Thank you so much, everyone, and you can now disconnect your line. Have a good day. Thanks.