Strong quarter, temporary tailwinds—guidance held firm

Q1 PBT ₹3,353 Cr reported; management attributes to JCC 9-month vs 3-month lag arbitrage; FY27 guidance maintained at ₹4,500 Cr

Q1 122.36 MMSCMD vs 122 MMSCMD prior year comparable; guidance upgraded to 123 MMSCMD for FY27 vs 119 MMSCMD normalized prior

Q1 PBT ₹772 Cr vs ₹489 Cr prior year; LPG price ₹90,796/MT vs historical ₹54,000/MT range; production +20% on new gas allocation

Q1 loss ₹130 Cr due to feedstock diversion; guidance vague ('expect breakeven')—no price guidance given

123 MMSCMD FY27 vs 119 MMSCMD prior normalized; 122.36 MMSCMD Q1 includes +4 MMSCMD shippers' volume and seasonal power demand spike.

₹4,500 Cr FY27 reiterated despite ₹3,353 Cr Q1 (annualized ~₹13.4 Cr). Management signals one-off basis arbitrage; 'will revise if required.'

FY27 breakeven expected; vague on when. Shift to ethane feedstock 'actively pursuing' to restore margins vs gas-constrained model.

PNGRB projects 297 MMSCMD by 2030 vs 200 now. Growth from CGD (45→80-85 MMSCMD), fertilizer (+10-12 MMSCMD), power (+5-10 MMSCMD), industries. No revised numbers; relying on PNGRB published figures.

16.5 MMTPA current; target 7-8 MMTPA by 2030; sourced 2.5 to date. Scouting all geographies. Will inform post finalization.

JCC contract (2.4 MMTPA) on 9-month Brent lag vs 3-month sales index. This quarter abnormal jump; converges over year. One-off, but Brent levels unknown.

Depends on Brent/Hub levels remaining months. ~50% back-to-back, 20% Pata consumption, 25-30% cross-index available for hedging. Currently 'sweet spot.'

₹90,796/MT avg price Q1. 1.9 MMSCMD total allocation (1.12 APM + 0.78 new well). Production rate sustainable based on 1.9 allocation.

Landed price $10.54/MMBtu. Breakeven: ~$13-14 cost + ₹130k selling price. Plant at 100% capacity.

GMPL under commissioning, production 'very soon.' PDH-PP: target Jun 2027 (+6-7 mo after) = Dec 2027 likely. No P&L guidance for FY27-28; profitability FY29 timeline unclear.

Clause 5A withdrawn. No unbundling obligation. TSO monitors 25% third-party open access; GAIL retains combined transmission-marketing model.

Using HPHT from prior bidding awards. PNGRB requires 3+ year long-term sourcing going forward. GAIL examining.

Ambient heating by Jun 2027. Incremental deals have West India optionality; will use available slots once ready.

~21 MMSCMD portfolio: ~50% (or slightly <50%) back-to-back, 20% Pata internal, 25-30% cross-index available. Hedging margins opportunistically.

Pata plant now 100% operational (was 50% Q1). Volume for Pata will be consumed in-house. Less arbitrage available for sale. Petchem price also softening.

Q1 extraordinary due to JCC 9/3-month arbitrage. 9-month JCC will reflect current Brent by Q2; margins shrink. If Brent falls, may lose (3-mo lags sourcing).

Q1 price ₹90,796/MT already softened Q2. APM gas ~$7, new well $12-13. Profitability will decrease current quarter materially.

Situation very volatile, changes daily. Q1 result extraordinary due to JCC 9/3 convergence. Over long run, these averages converge. Same kind of margins may not be available Q2.

Provision reduced ₹111 Cr → ₹11 Cr. No gas sourcing mix change.

Ministry published new urea policy yesterday. Two plants (Maharashtra, Chhattisgarh) under active evaluation. Will inform post DFR finalization.

Crisis showed country's LPG dependence risky; natural gas portfolio diversified. Message: LPG to be replaced with gas in cooking, industrial segments urgently. Structural tailwind for gas.

Gap partly due to CGDs sourcing independently. Pipeline transmission (GAIL strength) will benefit from volume growth. CGD I&C customers switching from LPG will boost.

Currently ~0.5 MMSCMD; will increase as Jharsuguda industries consume. 2 fertilizer plants (if approved) big boost in 3-4 years.

No, not reversed. One-off in current quarter, yes.

1.12 MMSCMD APM, rest (0.78) new well field gas.

In petchem since 1999; have market/customers. Must run plant at certain level. 21 MMSCMD HH: allocation detailed (back-to-back, cross-index, internal use).

Avg crude Q1 $96-97. LPG price set on Saudi Aramco index; reflects crude move higher.

Depreciation ₹3,200-3,300 Cr next year (40-yr pipeline, 35-yr petchem life). PDH-PP ₹11,256 Cr cost → +₹312 Cr annual depreciation. Interest ₹1,200-1,300 Cr yearly; +₹440 Cr for PDH-PP debt.

Purchased spot during summer at market close. Mixed strategy to keep customers supplied + protect margins. Power sector consumed substantial spot gas even at high prices.

123 MMSCMD annual guidance accounts for seasonality (Aug, Sep power demand; Dec, Jan power demand). Reiterated.

If material changes happen, will inform next quarter. Right now, no material change expected based on current and expected situation.

Petchem Q1 ₹1,46,000/MT vs Q4 ₹98,000/MT; LPG ₹90,796/MT vs ₹54k/MT earlier. Prices have softened. Will get impacted coming quarter.

It is the right assumption.

Govt pushing gas storage (strategic security), coal gasification projects, compressed biogas incentives. Intent and seriousness there but timeline slow.

GAIL always scouts all geographies for best deals. 7-8 MMTPA by 2030 target; 2.5 sourced to date. Will continue scouting all indices and geographies.

Q1 ₹3,353 Cr driven by temporary JCC basis arbitrage; management explicitly flags normalization. Guidance will be revised if required after Q2 results.

Management candid: 'advantage largely short term'; basis convergence will compress Q2 margin.

LPG Q1 ₹90,796/MT already softening Q2. Petchem Q1 ₹1,46,000/MT vs Q4 ₹98,000/MT has cooled.

Q1 capex ₹6,176 Cr (54% run rate). Major projects: pipelines, GMPL, PDH-PP.

Q1 gas marketing PBT ₹3,353 Cr inflated by abnormal JCC 9-month Brent vs 3-month sales lag. Management: 'will converge over time, margins shrink Q2-4.'

Q1 impacted by PLL force majeure (Qatar volumes) and 7 cargo delays. Spot sourcing (8 cargoes, ~6-7% of volumes) higher cost. LPG imports disrupted; domestic allocation risk persists.

Q1 loss ₹130 Cr due to govt priority commodity declaration diverting gas from petchem to essential sectors. Breakeven FY27 expected but timing vague. Ethane shift 'actively pursuing' but no committed timeline.

Q1 LHC PBT ₹772 Cr driven by LPG ₹90,796/MT (vs ₹54k/MT historical range). Prices already softening; management expects Q2+ decline. LPG dependent on Brent; margin compression materializing.

GMPL 1,250 KTA PTA 'in advance commissioning, production very soon' but no strict completion date. PDH-PP timeline shifted Jun 2027 (+6-7 mo) = Dec 2027 likely. Fertilizer plants (2 units, Maharashtra & Chhattisgarh) DFR under evaluation; no capex commitment yet.

123 MMSCMD FY27 guidance assumes power sector seasonal demand (Aug-Sep, Dec-Jan peaks). If LNG prices spike/collapse or monsoon patterns shift, demand could deviate materially. Management 'does not foresee material change' but acknowledges price sensitivity.