Ladies and gentlemen, good day, and welcome to the GAIL (India) Limited Q2 FY2024 Earnings Conference Call, hosted by IIFL Securities Limited. As a reminder, all participant lines 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 the conference call, please signal an operator by pressing star then zero on your touchtone telephone. Please note that this conference is being recorded. I now hand the conference over to Mr. Harshvardhan Dole from IIFL Securities Limited. Greetings, everyone. On behalf of IIFL Securities, I welcome you all for GAIL's 2Q FY2024 Earnings Call. To discuss the results in detail and share the performance outlook, today, we have, the management team of GAIL, represented by Sri Rakesh Kumar Jain, Director Finance, and other senior executives. I'd request, Director Finance, GAIL, to make an opening remark, subsequent to which, the floor will be open for Q&A. Over to you, sir. Thank you, Harsha. Mr. Harsha from IIFL Securities. My colleagues, dear friends from investors and analyst community, a very good afternoon to all of you, and welcome to GAIL's earnings call for Q2 financial year 2024. At the outset, I thank you all for attending this earnings call. I would briefly touch upon the major highlights for this quarter, and then we can have an open session for your questions. GAIL results for quarter ended 30th September 2023 have been declared today. Gross turnover for the quarter stood at INR 31,729 crore. Profit before tax stood at INR 3,130 crore, and there is increase of 66% over the previous quarter. If we talk of profit after tax, profit after tax stood at INR 2,405 crore, and here also an increase of 70% over previous quarter. If we talk on consolidated basis, GAIL clocked a turnover of INR 32,952 crore in Q2 financial year 2024, as against INR 32,755 crore in previous quarter, and some marginally up by 1%. Profit before tax is up by 37% to INR 3,138 crore, as against INR 2,283 crore, and profit after tax is up by 36% to INR 2,344 crore, as against INR 1,799.92 crore. The capital expenditure for quarter two financial year 2024 is INR 2,462 crore, and this capital expenditure is mainly on pipelines, petrochemicals, distribution projects, operational CapEx, other, and equity contributions. Now, I would like to share performance highlights of Q2 financial year 2024. GAIL gross turnover stood at INR 31,729 crore in Q2 financial year 2024, as against INR 32,138 crore in Q1 financial year 2024. There is a marginal increase, 1%, and this minor increase is due to basically there is a mix of issues. There is a decrease in gas volume and decrease in natural gas price and LPG price. These are the reason for minor, minor decrease. The profit before tax during the quarter increased to INR 3,130 crore, as against INR 1,889 crore in Q1. As I told you, there is a upside of 66%, and this upside is mainly on account of better gas trading margins, increase in natural gas transmission volume, decrease in fuel costs in natural gas compressor. If you remember, last quarter, we said there is a one-off because you are carrying the inventory of last year, the high, high cost purchase inventory, which we booked in quarter one as well. Further, there is a dividend income in this quarter, INR 270 crore. Normally, we don't receive dividend in Q1, and it starts coming from Q2. The profit after tax during the quarter increased to INR 2,405 crore, as against INR 1,412 crore, and here also increase of 70%, and reason are same. Physical performance for the current quarter as against previous quarter. Total gas marketing volume was 96.96 MMSCMD, almost 97 MMSCMD in quarter two, as against 98.84 MMSCMD in Q1 financial year 2024. And the decrease in volume, the almost 2 MMSCMD volume has gone down due to decrease in overseas volume. Now, what is happening, there is a increased demand in domestic market, so the international trade, which we use, used to do, has gone down by almost 5 MMSCMD, and there is a increase in demand in domestic market, so that was around 3 MMSCMD. So there is a net of, impact of 2 MMSCMD. But good sign is that there is a demand increase in domestic market. Natural gas transmission volume increased by 4 MMSCMD to 140.31 MMSCMD in Q2, as against 116.33 MMSCMD in Q1. If you talk of average pipeline capacity utilization, the pipeline capacity utilization was 58% in the Q2 financial year 2024, and the reason are same. There is an increase in demand in domestic market, therefore, pipeline utilization has also gone up. Polymer production is almost flat, 160 TMT in Q2, as against 164 TMT in Q1, and our capacity utilization was approximate 79%. Liquid hydrocarbon production was also almost flat, 238 TMT as against 243 TMT in previous quarter, and capacity utilization was 67%. LPG transmission was 314 TMT, as against 1,073 TMT in previous quarter, and here capacity utilization was 97%. Now, consolidated financial numbers. The consolidated turnover in current quarter stood at INR 32,952 crore, versus INR 32,755 crore in Q1. Profit before tax in current quarter is INR 3,138 crore, as against INR 2,283 crore in Q1. PAT is INR 2,344 crore versus INR 1,792 crore in Q1. Now, I will share GAIL CGD's performance. As you know, that GAIL is having six geographical areas directly with GAIL. So in these six geographical areas, we have infrastructure of 157 CNG stations, 274,000 domestic PNG connections. During the current quarter, three new CNG stations and 5,500 number of new DPNG connections were added. Physical volume was 0.3 MMSCMD. And in terms of our future plan for CGD, we target to add in GAIL, I am repeating in GAIL CGD, six geographical area, 100 new CNG stations and almost 200,000 new DPNG connections. I will also take you through the GAIL Gas performance. Gross turnover stood at INR 2,745 crore, as against INR 2,192 crore in Q1 financial year 2024. Increase of 25%, mainly on account of increase in bulk trading quantity by 47% and CNG quantity by 7%. PBT has gone down. I will explain the reason. PBT has gone down to INR 57 crore as against INR 102 crore, and there is a one-off. Actually, all the employees from GAIL are on deputation to GAIL Gas, and in terms of recent Supreme Court decision, GST is required to be levied for their service provided by GAIL in terms of manpower supply to GAIL Gas. So we booked INR 76 crore of GST implication till 31 March 2023, and for Q1, INR 4 crore. So this is one-off, which has happened during this quarter. Profit after tax stood at INR 42 crore as against INR 76 crore, and this is all, there is a decrease of 45%, and the reason are same. Physical volume increases to 6.55 MMSCMD in Q2 financial year 2024. Increase of 35%, mainly on account of, as I said, bulk trading quantity, 47% increase in bulk trading and CNG quantity by 7%. During current quarter, 18,799 new DNPG connections were added, and six new CNG stations were also added. GAIL Gas, along with its JVs, subsidiaries, has infrastructure of almost 8.9 lakh DNPG connections and 462 CNG stations. We have another subsidiary, Bengal Gas. As on thirtieth September 2023, Bengal Gas is having 12 CNG stations, approximately 215 kilometers of pipeline, and 8,000 domestic CNG connections. I will take you through the project performance. Mumbai-Nagpur-Jharsuguda pipeline. This pipeline is of 1,755 kilometers long pipeline. Activities are in full swing, and first section, Mumbai-Nagpur-Jharsuguda of this pipeline, which is of almost 698 kilometers, we expect it to be completed by June 2024. Regarding Jagdishpur-Haldia-Bokaro-Dhamra pipeline, this pipeline is length of 3,289 kilometers. Out of the same, 2,922 km of pipeline have already been commissioned, and remaining part is expected to be completed progressively by June 2024. Kakinada to Angul mainline, length is 420 km, and likely to be completed by the end of this calendar year. Gurdaspur-Jammu natural gas pipeline, having a length of 160 km, likely to be completed by July 2026. As you know, this pipeline has recently been authorized to GAIL, so pre-project activities and the project-related activities have started. Dhamra-Haldia pipeline, Odisha portion of length of 150 km is expected to be completed by the end of this calendar year. The other project, PDH-PP Usar, as you know, the capacity of this project is 500 KTPA. Project cost is INR 11,256 crore, and we expect this project to be completed by April 2025. 60,000 KTPA PP project at Pata. Project cost is almost INR 1,300 crore. We expect this project to be completed by July 2024. IPA at Usar, capacity is 50,000 KTPA. Project cost is INR 530 crore. Completion, we expect by December 2025. As you also know that GAIL has acquired JBF Petrochemicals. Now it is known as GAIL Mangalore Petrochemicals Limited. Capacity is 1,250 KTPA. Project cost is INR 4,200 crore. The activities related to the commissioning of project completion date is, are on, and completion date is by March 2025. Now I would like to also share our future outlook for gas marketing, gas transmission. So from gas marketing business, as you know, is showing robust performance. This is quite visible from the volume and volume, and margins in the marketing activity. This gives us confidence, as informed earlier, during various calls, meetings with investors and analysts, that whatever happens, we said in analyst call also during this year, annual analyst call in May at Bombay, whatever happens, we were able to earn at least INR 3,500 crore of gas marketing margin. And now it is evident from the H1 2024 results, by that H1, we have already earned INR 3,700 crore. So we will be meeting this target, and not only we'll be surpassing this target. In terms of the future outlook of gas marketing, let me share you, we expect at least to earn INR 4,000 crore as a marketing margin next financial year. As we said, regarding 2022, 2023, 2024, now we have estimated that in next year, we'll earn at least INR 4,000 crore. Gas transmission volume for 2023, 2024 is expected to be 120 MMSCMD. We have been telling you and sharing in various earning calls, various analyst meetings and interactions, that last year volume was 107. We will end up this financial year with an average volume of 120, and we also expect to exit at the rate of 123-124. In next half year, I think this is what I will say here. This year we are expecting an increase of almost 13 million on an average basis, and when we end by almost 16 million, exit will be higher by 16 million. Polymer production, as I shared, stood at 160 TMT, TMT, as I guess, 164 TMT in last quarter. This quarter, I'm talking of quarter two, we have been able to reduce losses in petrochemical segment by optimizing and minimizing, whatever, say, let's say, the cost of input gas for petrochemical plant. In H2 of financial year 2023-24, we plan to further optimize our sourcing and aim to close the year, if not breakeven, nearer to breakeven level. Further, starting next financial year, we have to normalize our petrochemical operations with a positive bottom line. Liquid hydrocarbon production stood at 481 TMT in H1 financial year 2024, and during the year, production is estimated at the same previous year production level of almost 950 or 930, 930-950. Also, to protect the margin LHC segment, as we shared in various earnings calls, we also started taking positions in financial markets, and we are doing, in a maybe in a smaller way, handling of LPG prices. I think, I have tried to cover up the Q2 financial and H1 financial results, and also the reasons for various increase, decrease, and changes in profitability, and also future outlook from my side. Now, I will hand over, back to you, Harsha, for open session. Thank you, sir. Rohit, can you open the session for Q&A? Yes, sir. Thank you. Thank you very much. We will now begin the question and answer session. Anyone who wishes to ask question, may press star and one on their touchtone telephone. If you wishes 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. Ladies and gentlemen, we request you all to ask only one question per participant. The first question is from the line of Maulik Patel from Equirus. Please go ahead. Maulik Patel has dropped down. The next question is from the line of Probal Sen. Please go ahead. Thank you for the opportunity, and congratulations on a strong set of numbers. I just had a couple of questions. One, with respect to the LPG and petrochemical prices, which have been subdued over the last couple of quarters, now, we have also seen Asia propane prices starting to recover from the last few months.... Just wanted to understand that when should we expect to see the impact of the slightly better LPG prices or propane prices in our numbers? Does Q3 so far look much stronger compared to Q2? And similarly, in terms of petrochemical, there, there is an element of oversupply in the near term that is developing because of additional commissioning of HMEL's plant and, you know, other capacities coming on stream as well. So how are we looking at the pricing scenario, given that we are also making significant investments in adding to our petrochemical capacities in the next three to four years? You know, just these two questions. And the last question was with respect to the trading run rate. I know you have often said this before, that predicting a run rate is very difficult, but what sort of EBITDA run rate should we work with for the second half, given that the numbers this quarter has definitely beaten street estimates by a wide margin? That's all. Thank you. I think your question largely on the LPG and petrochemical prices. Yes, the LPG prices in Q2 are really abnormally low, and we have also not experienced, rather, I must say, the, it's a rare occasion that our for Q2, which, we have also not witnessed in past. Sure. Because now started moving up, and we expect a significantly better performance in the remaining part of the financial year. With respect to questions of petrochemical, yes, the prices of petrochemicals are under tremendous pressure. We are also witnessing those pressures. But you know, we have ability... This is beyond our control. The market price will be what market is. No, nobody can control on the market. But when we have an ability to source the gas at the cheapest and best optimal price for petrochemical plant at Pata, which we have been doing, and the result for financial quarter two is the testament of that, that we have been able to reduce our losses to a great extent. What we expect in coming quarters or remaining part of the financial year, that we will be able to source gas or provide gas to our petrochemical plant at a price which gives a significant change to the pro- financials for petrochemical plant. Thank you. So just a follow-up, if I may. So with respect to the petrochemical plant, then, can we expect a pickup in terms of Actually, your voice, your voice is not coming very clearly. I hope somehow... Sir, is this better now, sir? Yeah. Yeah. I was asking, sir, if a follow-up in terms of petrochemical volumes then, can we expect a gradual pickup in terms of volume run rate for the next few quarters? Yeah, yeah. If you see that this quarter, of course, we were almost at the same level at what we were at Q1. Right. If you see, anyway, it's better because it's a festive season, and this time, during this particular quarter, anyway, demand picks up. So that will be one positive point. And second positive point is that since we are able to source now a reasonably good price gas, so we have an ability to produce more and sell more, and maybe in terms of pricing, we may be competitive because we will have more leverage to do that. So I think we'll try to pick up and enhance our production in remaining half of the financial year. Understood, sir. Thank you. That's all from me. I'll come back in the queue if I may. Thank you for your time, sir. Thank you. The next question is from the line of Nitin Tiwari from Phillip Capital. Please go ahead. Good evening, sir. Thanks for the opportunity. So my question are also related to the petrochemical segment. Just wanted to understand that why we have not been able to wrap up our production, after the decline we saw last year because of high gas prices. So gas prices are more or less normalized, their import prices are not as high, but we, our utilization levels continue to be low on the petrochemical side. And secondly, if you can help us, with the breakup of the cash cost in terms of what percentage would be the cost of gas, and what percentage would be the operating cost. So just wanted to understand that. Okay, one, you are right that the input gas prices has significantly gone down if you compare with the last financial year. But if you see in terms of petrochemical prices, the average price has gone down by at least INR 20,000 per metric ton if you compare with last financial year, which is a point which is a matter of concern for us, but beyond control. So as I was answering for the questions for the participant before you, that the controllable thing to some extent we have is we have ability, being a one of the largest gas player in the country, to source this significantly good price gas to petrochemical plant, and that's what we have been doing. Q2 is the least amount of that that we have been able to reduce the losses, and in second half, we'll continue to do that. In terms of capacity utilization, we expect that we will be ramping up our production in remaining half of the financial year. In first half, why we could not do? Because there was a lot of pressure on prices and inventory hold up was there. Market was actually a depressed market in Q1 and also to some extent in Q2. So market was also not picking up. Inventory holding up was there. Now, at least to a large extent, that situation is over. It's not fully over. So we hope that in financial year second, this current financial year, second half will be better off as compared to first half. ... Sure, sir. A breakup of the operating cash costs in terms of what percentage would be the cost of gas, and what percentage would be operating costs in the your- Anyway, this can be worked out from the financials, but we will be able to give you offline. I don't have that data available readily. We will be sharing to the extent we can. Lastly, sir, before I let you, sir, are we also holding up any inventories? I mean, is there a difficulty in pushing the product in the market as far as petrochemicals are concerned? Or, we don't have any inventories at our end. I mean, we have inventories. We have inventory, good amount of inventory we have, but we don't have inventory like we had in Q1. We have, I mean, some inventory you have to maintain, but this time we have an inventory of 45, 000-50,000 metric tons. But this inventory has significantly come down, which was higher in Q1, so and even in some part of Q2. So inventory holding is reducing slow by slow. Market is picking up. Prices certainly are pressure, but in terms of demand, market is picking up. Sure, sir. Thank you so much, sir. I'll get back with you. Thanks for all done. Thank you. The next question is from the line of Amit from UBS. Please go ahead. Sir, good afternoon. My question relates to the city gas distribution businesses which we have. We have three formats where we have few city gas licenses under GAIL. We have few, few joint ventures, and, then we have, you know, listed investments like IGL and Mahanagar Gas. Sir, do we have any plan for any value creation in these businesses by integration, reverse merger, or any other modes going forward in the next one or two years from here? Yeah, Amit, actually, we are regularly discussing at various levels about this, your question, whether to reverse merger or whether to shift the geographical area, which we have GAIL sold to GAIL Gas, and then we list GAIL Gas. Certainly, this is in our mind, we are discussing on a regular basis. But I, it is difficult to give me a timeline, but certainly, I can say at that point of time, we are discussing, and once we take this call, we'll come back to you, but this is in our radar. Okay. Sir, do we have any other view on merging this JBF plant with us, you know, so that we have better integration with the existing petrochemical facilities? Do you see any economic sense of cost or other benefits for merger of these entities, which are currently separately, separately into other entities? Certainly, we have. We have these issues in our hand, not only JBF, we are also thinking about KLL. We are regularly discussing this. We have a certain timeline in our mind that we are taking the action in this regard, that should we merge this JBF and also, at some point of time, KLL to GAIL. Okay. And so last one, just, on the dividend or the buyback. So we have come back very strongly with a very strong profit numbers. And, as you mentioned, second half is also looking promising, and next year is also looking promising. So any plans for any buyback or a good dividend payout for the shareholders? Look, this is a board call. It is very difficult for me to give anything, but you can historically see us, what is our payout ratio. We have been giving dividend estimate of 20%-45%, payout ratio is 45%-50%, and that is our track record, and you can vouch for yourself. And I think, GAIL, as a company, is rewarding to its shareholders, and as management thought, will continue to do so. Any number for me, giving me number will not be fair, and I cannot give because it's a board call. Regarding buyback, we have done buyback for almost consecutive two financial years. At the moment, nothing is in our mind, but anyway, because again, it's a board call, we'll come back to you once the board deliberates and decides to do something. Sure, sir. Thank you, and sir, wish you all the best and a happy Diwali to the entire GAIL team. Thank you, Amit. Same to you. Thank you. Thank you. The next question is from the line of Ramesh from Nirmal Bang Equities. Please go ahead. Hello. So if you're looking at your core gas business, both transmission and marketing, how do you explain the kind of strong margins in gas marketing? Because about INR 1.8 per cubic meter go back to the envelope calculation. So, and what is the kind of visibility you have in terms of the unit margins? So assuming a certain marketing volume, what is the kind of predictability we can assess for the marketing segment? If I understood you, you asked two questions. One is the historical, what are the reasons, why, how we have been able to earn so much, and what is the predictability? Mm-hmm. Right? Yes. Yeah. So with respect to your question, how we have been able to do that, I know. One more dimension I will add, that we have been now predicting also what kind of marketing margin we'll earn in coming years. You know, we have portfolio of 14 MMTPA of energy in our hold. And, a great part of this portfolio, major part of this portfolio, we have sold on back to back. When I say back to back, back to back index, not the, the margin part of it. And some part of it, we have kept open for ourselves.... Second thing, which I will tell you, we have the FOB contract, which is a significant portion of our portfolio, almost you can say 5.8 billion ton. And when we have FOB based contract with us, we have ability to reduce transportation charges through various mechanisms. One of the mechanism is destination swap, wherein we swap our cargoes which are available at United States with the cargo which are required to bring to India. And in this particular quarter, let me give you data. We have been able to reduce our cost of gas by $1, by $1, which straight away goes to my profit, as compared to Q1. Second, we have, whatever portfolio we have kept open, we have ability to financially hedge those, which we have been sharing with you, and we have continuously been doing, taking positions in financial market, and are able to not only maintain our profits, but are able to take advantage of the market situation and increase our marketing margin. While we want to remain competitive in the marketing, gas marketing segment, but these various measures have been able to provide good dividend to us, and that's how we have been able to perform better. That is one thing. Regarding future, I said, in answer to questions by one of the participants, and let me give you the historical data. Now, for last two years, we have been predicting our marketing margin. We said last year, 2021 to 2023, whatever situation happens, we will earn at least INR 3,000 crore. This year, last year's analyst meet call, in May, we said this year, whatever situation happens, we will earn at least INR 3,500 crore, and we have demonstrated that even the worst kind of situation of Ukraine war last year. I also said in the answer to the question by one party, that next year, we expect that at least we should earn marketing margin of INR 4,000 crore. Whatever we have been saying, you can vouch for yourself, we are able to not only achieve our better to lower performance. That's the future visibility about marketing margin. Okay, as a follow-up question, in terms of the gas transmission volume, particularly in the JHBDPL pipeline, where are we in terms of the completion of the entire JHBDPL pipeline? And when do you see that ramp up to the full capacity utilization in the, say, in the next two to three years? Yeah. So in terms of completion, I said in the opening remarks that this pipeline, we expect to be commissioned by 2024, fully, progressively. Last leg will be completed by June 2024. In terms of capacity utilization, this pipeline is one of the significantly highest utilization pipeline, because we expect at least 7 million -10 million volumes from refineries along the pipeline, the city gas distribution in addition. Then this pipeline will also cater to the Northeast, including NRL refinery. We are in discussion with various consumers to take the gas along this pipeline. So whatever portion we have commissioned, it is getting largely utilized, and we expect this pipeline to be utilized. This is one of the highest utilized pipelines at the moment, I can say so. Let me just squeeze in one more question. You mentioned something, the opening remarks about the cost savings in your compressor cost. So how much is the savings as a first- Sorry? You, you made a reference to the cost and the gas use in the gas compressors for your transmission business. Yeah. What would be the savings you would have achieved in the second quarter of first half? And is that something one can expect to sustain in future? It is not saving. Actually, there was one off in Q1, because we were carrying the costly gas inventory in our portfolio, which we purchased last year. It was more than INR 200 crore of extra cost we booked during quarter one, which is not there in quarter two, because now we know for sure that our allocation has been reduced. So we have been sourcing this gas from domestic market, which is significantly cheaper as compared to the last year's price, which were hit by Ukraine war. So the... So if, again, to summarize, to answer to your question, last quarter, we booked more than INR 200 crore, the extra cost to fuel, which is not there in this quarter. So, if I may just ask a last question. In terms of your discussions with the regulator, you were talking about getting back some of the costs you incurred last year in terms of additional costs for the imported LNG for your compressors. How is that progressing? Is there any visibility in the getting that refund from the regulator this year or next year? Yeah. So before giving answer to your question, first, as an analyst, let me just, you know, get you a recap. The regulator has allowed us gas price of $3.61 per MMBtu for consumption in compressor fuel, which is nonexistent price, because this is not even APM price. Last year, we, in the situation when all of sudden the allocation was cut, we used significantly higher price. Even during this year, the domestic price is almost $10, $11, depending on the time. So this deficit, we have demanded from the regulator through tariff increase, for which we filed the petition immediately after issuance of tariff order. This review petition has been listed for hearing in November. We expect that regulator will take a...... call on immediate basis, because we also, during discussions to them, we, we said that if you delay it, it will—it has an impact on NPV basis, our tariff will further increase. So in the larger interest of everybody, this should be taken up on priority basis, so that we get our desired return and, get back the money which is incurred, and it does not impact the interest of consumer as well. Thank you very much, sir, and wish you all the best. Thank you. Thank you. The next question is from the line of Kirtan Mehta, from BOB Capital Markets. Please go ahead. Thank you, sir, for this opportunity. Would you be able to share light on how do you see your gas transmission and marketing volume ramp up into FY 25? Would you be able to give some color there? Sure, sure. We expect our volume, marketing volume, to go up by at least 6%-7% next year. Transmission volumes, which I said that we will end up by 120 on an average basis this year, we're likely to increase by 12 MMSCMD in financial year 2025. That means, it will—we will be having an average transmission volume of 132-133. Could you also sort of give a bit more color in terms of where do we see this volume growth coming from? Yeah. So this volume growth, largely, you see the consumption of gas in domestic market is increasing. We have an infrastructure which caters to 70% of the country's gas requirement. So first, volume, which is very, very visible to everybody, comes from city gas distribution, which has a double-digit increase of almost 12%. So 4-5 million volume increase is there. Even if on crude basis, you take 70%, 3 million comes to our transportation perspective. As I said in another answer to another question, that there are refineries along Jagdishpur Haldia pipeline. There is a Dhamra terminal has already commissioned. There are various off-takers at Dhamra terminal, they have booked the capacity. If wherever they, they take the volume, the pipeline belongs to GAIL. 7 million-10 million volumes is likely to come from there. There are various steel plants, there are various other refineries, and there are another upcoming pipeline, which GAIL is constructing, are going to be commissioned. So all these likely to bring the volumes to our fold, and that's how we'll reach to under 32. Thanks for this color. One follow-up question on the gas marketing margin, where we are sort of continuously increasing our predictability from INR 3,000 crore to INR 3,500 crore to INR 4,000 crore. Is this primarily sort of improvement coming from our ability to reduce the cost of gas from the destination swap, or are there any other levers that are at play? Because marketing volume per se has remained more or less same. So where are we actually seeing this increase coming from? Actually, on optics basis, volume has remained same. But I said, that we used to market this gas in international market in view of less demand in domestic market. So now we have almost all the volumes which we used to sell in international market to domestic market. And when we market in domestic market, there is more ability to earn margin, because domestic, international market, we were selling under some kind of situation where we source, and there was no demand in the domestic market. So that is one. Second, we are also in the market to source at least one MMTPA of LNG every year for coming five to six years. That is another addition which is going to happen. And even if on average basis, you add the margin, that will come. Third, I said, and I also share in one of the questions, that we have ability to optimize the cost, because when you bring the cargoes from United States, there is certain cost of cargo, cost of tariff, say $2.5, just I'm using a number. And even if we are able to reduce by $1, that is another addition to our margins, without impacting the customer. Not only it is, actually, it is also increasing our competitiveness, and we are able to earn more margin. Then we are doing, we have ships, through which we are able to, you know, do one more transaction, that is Destination Swaps. It means, through those ships, we sell the cargoes in international market to the destination in Europe, and we purchase through those ships for bringing the molecule to India. All those actions we have taken, and we have demonstrated in last few years since the United States volume started flowing to India in 2018. In five years, we have developed lot many solutions to reduce the cost, to increase the marketing margin, either through market in international market or through increase in sales in domestic market. And also, as our chairman made the statement a few months back, we are in the international market for sourcing of LNG, which will also add to our portfolio and increase the profitability. Thank you. Thanks for this color. Are we on? Are Are we able to tie up the 1 MMTA volume for this year? So would our portfolio be increasing by 1 million ton extra this year? So we are in discussion with various suppliers. So when we conclude, we'll come back to you. But we are discussing with various suppliers, and I can say that we will be in a position to say so very soon to you. Thank you. Thanks. Thank you so much... The next question is from the line of Varatharajan from Antique Limited. Please go ahead. Sir, thanks for the opportunity. Sir, on the volumes of 2Q, there would have been a signi- Can you louder, please? Yeah, one minute. Is this better? Yeah. Yeah. So, 2Q, what I understand is that there's been a significant contribution in terms of volumes from the power sector due to the peak power demand. So this is a number which may not be sustained over the next few quarters. So what is your guidance on that? My guidance, I already shared with you. So that includes the, I mean, this volume going away, or you are confident that volume will not stay? Actually, this is not unique situation in this quarter, that power sector has demanded some volume, and therefore, our marketing volume has increased. It's an annual phenomena which happens, and this year is one of them, and we will continue to continue to market the volume which we are marketing this year and maybe, sorry, in quarters, and we expect not only to maintain, we increase. Because anyway, pipelines are commissioning, getting commissioned, molecules are reaching to the farther end of the farther end of hinterland. So, new demand is also coming. CGs are getting commissioned. So it is not the power sector. Yes, power sector has taken some volume in Q2, but even Q3, they have taken. Okay. Sure. Secondly, on the Gazprom thing, volumes would have normalized by now. Regarding the volumes which were not delivered, has there been any kind of progress or proceeding, how we are going to resolve that issue? So we have taken up this issue of volume not delivered through legal reports, and we are engaged for resolution of that issue, which we for the volume we have not got. Is there a possibility that they'll deliver those volumes now? Actually, all- As a part of the solution? Because you cannot say what will happen to those, those things. Okay. We expect everything to be what we wish, but let us, let us see how it happens. We only will gain, we will not lose. Fair enough, sir. And lastly, on GAIL Gas, what is the CNG and domestic PNG volume out of the 6.5 million there, sir? Okay, let me see if I have; otherwise, I will give you. CNG and CNG volume for GAIL Gas. Do you have? 6.5. That is total. We'll give you, we don't have breakup that. Not a problem, sir. I will catch you later. Thank you. Sure. Thank you. The next question is from the line of Sashi Ranjan from... Please go ahead. Good afternoon. Am I audible? Yeah, yeah, very well. Thank you, sir. Thank you for the opportunity. Can you just throw some color on the Vijaipur plant in MP for 10 MW of electrolysis plant that was set up? How is the progress going on? Yeah, the construction activities are going on, and we expect that plant to be commissioned by the end of this financial year. Oh, that's great. So it's on time. Can you just help me with at what price H2 is hydrogen is being produced in view of the mandatory use of the green hydrogen for fertilizer and refinery refineries? Is that price that at which we are producing acceptable for these refineries and fertilizer companies? Actually, yes, we expect that, but the purpose of this plant is what? This is almost, you can say, we want to do a pilot project. Why we want to do? Okay. Energy transition is taking place. We are in a gas business. We know the gas has a longer life than other fossil fuels. Mm-hmm. But can we be complacent? In order to make ourselves future ready, we have put—we are putting this plant. The plant, there are customers for this hydrogen. They are approaching us. Price may be an issue, but if regulation comes, that may also not be issue. But in order to take care of future readiness, we are going ahead with a pilot project, is 10 megawatt PEM technology-based plant, and we see this accordingly. Okay. Thank you, sir. The last question. In the last financial year, we had a, you know, one-off of around INR 3,200 crore last quarter. First quarter of this financial year, we have seen a one-off of around INR 334 crore, and this quarter also, it's around INR 80 crore. So, being an investor, being a very, you know, trusted investor of Gas Authority of India Limited, it takes me a lot of courage to hold the shares when one-offs are those high and so frequent. So what are the measures being taken to, so that these one-off doesn't come up, and even if it comes up, it's very negligible? That's my last question, sir. Thank you. Which one of you are referring to in, when you are, raising this number? Can you share? I don't have the breakup of the one-off that has happened, but in last year's analyst and investor meet, INR 1,200 crore of one-off was there, and in last quarter, there was one-off of around INR 1,333 crore. I got it. Got it. Okay. Thank you. Last year, on sixteenth August 2022, I'm giving a specific date. Yes, sir. Actually, we had an allocation of 1.55 MMSCMD of gas for use in our compressors. In order to meet the increased demand of CGD, Government of India, in phases, started deallocating that gas. That is one statement. Second, when this deallocation started happening, you know, where was market? The market of LNG was, at one point of time, around $100. In that bear market, we were to source the gas at $40 per MMBtu in our compressor stations. So that one-off was, actually one-off, lifetime one-off. It cannot be a one-off or a routine one-off. So second, even if that one-off has happened, you as an investor, know that in terms of regulatory provisions, this is allowed. Third, it is delayed, but on net present value basis, total INR 1,200 crore will be available through revision of tariff. Not be concerned, we have already filed the petition with PNGRB. We are regularly following up. There is hearing in November. We expect some positive things to happen. Thank you, sir. Thank you, and wish you all the best for that to come. And if I may, if you may allow, can I go for the last question? The product that we have in the petrochemical side, these are easily available by being provided by the other players. So do we have that much as a market where all the players can sell their products? Sorry? All the players- I mean, even the private, in the private sectors, we have players in the petrochemical segment, we have the private players also. So is that market that huge that we all as a, we all can have a piece of cake that is available? No, no, it doesn't happen in free market. Okay? It's not that everybody will decide and sell at a same price and same, and a particular market. It's a free market. One more supplier exists in, other than the domestic, is the overseas suppliers- Yes. -which are significant to this country. Even if you, for the time being, assume that that is a big, big, chunk which is coming, and that will take place. Mm-hmm. Thank you, sir. That was my last question. That helps. Thank you so much. Wish you all the best. Thank you. Thank you. Ladies and gentlemen, for the paucity of time, we take the next question as the last question. The next question is from the line of Amit Murarka from Axis Capital. Please go ahead. Yeah, hi, good afternoon. This is Amit Murarka. On that issue of the internal feedstock gas cost, the internal system use gas for transmission, while you say that you are kind of in discussion with the PNGRB for this review of the gas cost, but is there any precedent when a single factor has been taken up for review before the five-year review period, or will this be an exception if this is done by PNGRB? Okay, it is nothing extraordinary. First, let us go to the law of the land. The regulatory provisions provide that there is significant change in the tariff computation parameter. Either initiation of entity or regulator on its own can look into the revision of tariff. And change of gas price, they consider $3.61 per MMBTU. We consume $40 per MMBTU. We are continuing to use $12 almost, the gas price. We also recognize in the tariff order that will be compensated. They mention the Spot gas price. So it's available in terms of law of land. And this tariff regulation, it is not a very, very old regulation. 2008, first time tariff regulation came. They started putting the tariff orders, and final tariff order started coming only 2015, 2016. So it's not a very old that, that this precedent will be available. There is no need of any precedent. PNGRB has accepted our review petition. They are seized with that, and we expect that in November, they will some kind of review it, and we also gave them flavor. If you don't take these actions, what will happen on NFA basis for increase in tariff. But, sir, on the other hand, like, versus the integrated tariff, you are anyways realizing a higher tariff, if I'm not wrong, because of the zonal distribution. So anyways, you are realizing higher tariff Am I wrong? Actually wrong. Okay. You are actually wrong. Because there is a revenue, and there is, which is relies on, on unified tariff basis. And there is also an amount which we require to settle among ourselves. When you calculated average tariff, you took, take the revenue part of it, and you don't take the amount which we are required to pay to the, other shipper, other transporter. So even if I have to give some kind of estimate, even, this quarter, we have to pay INR 200 crore to other transporter. If you knock off that, the numbers will not look that high. Yes, it may be higher or lower to some extent, it will not be high. And to some extent, it is in terms of regulatory provision, because risk of zonal volume change rests with transporter. So the confusion in the air that we are realizing very high is absolutely a wrong confusion. We are actually realizing what is due to us. Sure, got that. For the first half, could you, could you give the number of how much you have paid back, like INR 200 crore you said is for Q2, for first half? Actually, regularly settling, it's a continuous process. It's not that. Because, let me give one minute to this question. Because tariff is levied to customer unified basis. My entitlement is integrated. Since I bill based on unified basis in revenue that appears, whatever I have differences there, it is settlement between me and other transporter. That remains in payable. Okay, but on particular day, I can give you this, what is pending for settlement. But on a continuous basis, since this is happening, so it will not be correct. But almost INR 200 crore we have to settle sometimes we realize more, sometimes they realize more. We use to settle it. Got it. Got it. Thanks for that clarification. Okay. Okay. Thank you. Ladies and gentlemen... Ladies and gentlemen, we will now hand the conference over to Mr. Harshvardhan Dole for the closing comments. behalf of IIFL Securities, I thank you, GAIL management, for giving us an opportunity to host the call. I also thank the participants for, you know, logging in and asking questions. I realize, for paucity of time, a few questions have remained unanswered. I request you to send an email either to us or to GAIL Investor Relations team, and they'll do the needful. Sir, any closing remarks here you would like to make? Yeah, yeah, you have covered. What I wanted to say that if any questions to the participants we could not answer, even those can be referred back to us. And certainly, those participants who could not ask the question, we welcome them, and we will be able, happy to answer them. Thank you very much again for taking interest in GAIL, and we'll be happy to meet you, connect you, and give you answers to your whatever questions you have. Thank you, sir. Thanks. On behalf of IIFL Securities Limited, that concludes this conference. Thank you. Thank you for joining us, and you may now disconnect your lines.