Ladies and gentlemen, good day and welcome to Gujarat Gas Limited Q3 and FY25 Earnings Conference Call. 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 touch-tone phone. Please note that this conference is being recorded. I now hand the conference over to Mr. Sandeep Dave, Company Secretary of Gujarat Gas. Thank you and over to you, Mr. Dave. Very good afternoon to all of you. A very warm welcome to Q3 earnings call of Gujarat Gas Limited. I am Sandeep Dave, Company Secretary and Head Corporate Communication of Gujarat Gas Limited. To give you an update, since our last earnings call on the composite scheme of arrangement on 30th August 2024, we have announced the scheme of arrangement among GSPC Group of Companies. Just to remind you about the rest of the scheme, the proposed scheme will eliminate layered structure of GSPC Group, promote business synergies, and unlock value for its stakeholders. The scheme is subject to various statutory and regulatory approvals. We have filed the scheme with BSE and NSE, and I am happy to report that we have received no objections from BSE and NSE, and we are targeting to file the scheme with MCA early next week. Coming back to GGL, to give a brief background about GGL, GGL is the largest city gas distribution company in India. GGL is operating in 27 geographical areas spread across six states and one union territory. We have a good mix of matured and maturing CGD areas. We have developed a pipeline network of more than 14,000 km, which provides natural gas to close to 22.27 lakh households, 4,430 industrial customers, and 15,590 commercial customers. We also operate 825 CNG stations, serving approximately 4 lakh vehicles per day. We are aggressively setting up CNG infrastructure as well as upgrading CNG infrastructure to promote the use of clean and green fuels. We have also started injecting biogas into GGL system. Consistent with our strategy to focus on increasing volumes, we have achieved an overall volume of 9.73 MMSCMD as on 31st December 2024, which is an increase of 5% for the corresponding period in the previous financial year. GGL aims to deliver affordable, reliable, and cleaner energy by operating responsibly and performing with excellence while considering environmental, social, and governance factors. As part of our commitment to ESG initiatives, we have taken various measures, which include hydrogen blending pilot projects, which we have completed with 8% blending. Now, we have initiated actions for increasing blending level to 15%. This will be done post necessary regulatory approvals. We have embarked on a major digitization drive across various business operations and processes. Our major contribution to the environment is by virtue of promoting the use of natural gas for industrial customers. In Q3, we have reduced the burning of approximately 13,000 metric tons of coal per day. Further, through our CNG sales on various outlets, we have reduced the combustion of approximately 3,084 km of petrol per day during this activity. At Gujarat Gas, we adhere to the two highest standards of safety and a strong culture of safety. GGL is an ISO-certified organization for integrated quality, occupational health, safety, and environment management systems. We build, operate, and maintain a safe and reliable gas network in our areas of operation. With this brief background on GGL, I now request my colleague, Mr. Dipen Chauhan, to share business updates. Over to you, Dipen. Thank you very much, Sandeep. Good afternoon, everyone. First, I will update on the domestic and commercial segment. We are seeing a positive growth in the domestic segment. GGL's customer base is now more than 22.08 lakh domestic customers. Despite the festive season, GGL has still managed to maintain the growth rate and has been able to add 0.38 lakh customers in the current quarter. Apart from that, we have registered 0.53 lakh customers in the current quarter for the connection. The commercial segment is showing a steady growth in connection numbers. We expect the numbers in the domestic and commercial segments to increase over a period of time as the new areas mature. GGL, at present, has a customer base of more than 15,500 commissioned commercial customers. Now, let me update on the industrial segment. In the industrial segment, sales volume was 5.45 MMSCMD for the quarter ended 31st December 2024, whereas the sales volume during the same period in the previous financial year was 5.53 MMSCMD, an overall decrease of almost 1%. This was despite the fact that many industrial areas in South Gujarat observed shutdown during the Diwali period. The average Morbi volume during the quarter was 3.35 MMSCMD, and known Morbi volume was 2.10 MMSCMD. The Morbi ceramic market has regained volume from 2.86 MMSCMD in Q2 FY25 to 3.35 MMSCMD in Q3 FY25, owing to resumption in manufacturing activity post-pandemic. The known Morbi volume of 2.10 MMSCMD for the quarter ended 31st December 2024 has grown from 1.88 MMSCMD during the same period in the previous financial year, an increase of 12%. During the quarter, we had to increase the industrial prices by approximately INR 2 per SCM. The increase was mainly on account of the significant increase in LNG prices. The spot LNG prices have increased by more than 20% since September 2024. We continue to monitor the price movement of natural gas and alternate fuels across all our operating areas. The natural gas prices during Q4 are expected to remain high mainly on account of geopolitical factors. The same may result in adverse impacts in the competitiveness of natural gas with other alternate fuels. Finally, let me update on the CNG segment also. In Q3 FY25, CNG sales in Gujarat increased by 11% year over year, while outside Gujarat, sales surged by 25% on a year-over-year basis. Overall, CNG sales across regions grew by 12% annually. CNG continues to maintain a significant price advantage, being approximately 46% cheaper than petrol and 15% cheaper than diesel. During this quarter, we have added five new CNG stations, reinforcing the momentum of infrastructure expansion and enhancing accessibility. We are also proud to mention that the strong momentum in CNG sales has continued, achieving our highest-ever sales of 3.12 MMSCMD in this quarter. This performance highlights a strong investment outlook driven by increasing customer adoption and ongoing strategic infrastructure development, further strengthening CNG's position in the energy market. Now, I would like to request our CFO, Mr. Rajesh Sivadasan, to take the floor. Over to you, Rajesh. Yeah, thanks, Dipen. Good afternoon, ladies and gentlemen. I'm Rajesh Sivadasan, the Chief Financial Officer and the Head of Industrial Relationship at Gujarat Gas Limited. I welcome all of you to the earnings call of Gujarat Gas Limited for the third quarter of the financial year 2024-2025. I'd like to thank you all for attending this call today. I trust you have gone through our financial results for the quarter ended 31st December 2024, along with the investor presentation, which we have reported on our website and exchanges. During the quarter, the company has invested close to INR 213 crores into the infrastructure, aggregating to around INR 549 crores in the nine months of this financial year. The company is presently having close to 42,000 km of PE and steel network, which is a key growth driver for our business. In terms of revenues, the company registered a revenue from operations of INR 4,333 crores during the third quarter of this financial year, against INR 4,084 crores in the corresponding quarter of the previous year. The company has reported a profit after tax of INR 222 crores during the third quarter of this financial year, as compared to INR 220 crores in the corresponding quarter of the previous year. The company's EBITDA for the third quarter for the financial year 2024-2025 stood at INR 439 crores, as compared to INR 424 crores in the corresponding quarter of the previous year. In terms of rupee per SCM, EBITDA margin stood at INR 5.04 in the third quarter of this current financial year, as compared to 5.03 MMSCMD in the corresponding quarter of the previous financial year. As the investors are aware, during this quarter, there was a reduction in the APM allocation in two tranches, that is, in the month of October and November 2024, which has resulted in the quarterly APM shortfall of close to 45%, which was sold through New Well Gas, HPHT, from Reliance, IGX, and the remaining through Spot. After the recent corporate announcement also, Gujarat Gas continues to have the credit rating of AAA stable for long term and A1+ for short term from CARE, India Ratings, and CRISIL. Further, as requested by the investors, we have uploaded the half-yearly numbers on GSPC's website. We now open the floor for Q&A session. Thank you. We will now begin the question and answer session. Anyone who wishes to ask a question may press star and one on the touchstone telephone. If you wish to remove yourself from the question queue, you may press star and two. Participants are requested to use handsets while asking a question. Ladies and gentlemen, we'll wait for a moment while the question queue assembles. The first question comes from the line of Probal Sen with ICICI Securities. Please go ahead. Thank you for the opportunity, sir. First question was with respect to the APM reallocation that you mentioned. Just to clarify that this 45% shortfall in Q3 was essentially for the CNG segment, as I understand, and after the restatement of part of this volume, can this stay in Q4 so far? That was the first question. Probal, your voice is breaking. Can you repeat the question? Just one second, sir. Is it better? Yeah, it's better. Yeah, I was saying, sir, with respect to APM, just wanted to clarify that the 45% shortfall you mentioned, that is for the CNG segment, and after the restoration of some of that volumes that has happened in January, what is the revised percentage that we are getting right now, if we can get a sense? That was the first question. Yeah. See, the 45% is domestic and CNG both put together. The shortfall is 45% each. Okay. Okay. Okay. And in Q4, sir, what is the percentage now after the, again, restoration of some of those volumes? It will be close to the same amount, same amount, 45% only. So there has been no increase in the APM allocation? No, no. You need to understand that we are talking about an average for the three months, wherein the allocation was reduced in October and November. Okay. So now, basically, that's the average is coming to 45. So now there is a marginal increase which has come in for the entire quarter. Next this quarter, it will be around 45, maybe at 47 or 48, maybe. That is the shortfall, or that's the allocation percentage? That is the shortfall, yes. That is the shortfall. Understood, sir. And the second question was with respect to Morbi volumes, where you mentioned that there has been a recovery after the festival-related shortfall was over. I just wanted to understand, sir, how much impact is this whole freight situation and the shipping constraints still having in the region? And therefore, what kind of outlook can we build in for Morbi volumes in particular for the next three to four quarters? If you just see the present geopolitical scenario and after the new government in the USA, it looks like the situation will be better or improved for the businesses or for the shipping to be continued in the Middle East and other areas. So we are hoping that volume and business will improve. Sir, is it possible to share any rough range of what the volumes have been in the first couple of months in Q4 in January? I think you need to understand that the Morbi volumes are also driven by the propane prices. Right. So now the propane price, there's a difference. The delta has increased with respect to propane and gas, which is because spot prices have also gradually moved up with respect to the gas prices. So we are anticipating at three presently. In this quarter, we did close to 3.35 MMSCMD from Morbi. Right. Right. Which will be around three now going forward because of the price differential which has increased. The uptake has reduced now. Understood. If I can squeeze in one last question, sir, with respect to the sourcing contracts, can we just get a broad sense of what are the contracts in place right now with respect to volumes as well as term? Have there been any new contracts signed in this quarter? No, there has not been any new contracts that have been signed in this quarter. The same contracts with BG, Petronet, some of domestic gas, and HPHT. That is what it stands for. Yeah. All right. Thank you so much. I'll come back if I have more questions. Thank you for your time. Mr. Sen, are you done with the question? Yes. Yes, I'm done. Thank you. Thank you. The next question comes from the line of Santanu Saikia with IndianPetroplus. Please go ahead. Yeah, I was just wanting to know what exactly are the volumes for Morbi? You said 3.35 MMSCMD in the last quarter, and it regained from 2.86 MMSCMD in quarter two. So the data, can you just repeat the data one more time about Morbi? I think the data you are sending is right. 2.86 MMSCMD was the previous quarter and 3.35 MMSCMD in this quarter. That is 2.3 MMSCMD. What is 2.01 MMSCMD and 1.86 MMSCMD that you described? Pardon? You also said 2.01 MMSCMD and 1.88 MMSCMD for the previous financial year. Actually, it is 2.10 MMSCMD. That is for non-Morbi market. That's for the? Non-Morbi market. Outside Morbi. Non-Morbi market. Okay. All right. Okay. I got it. So now, could you tell us what the delta is between the propane prices and your prices as of now? What is the propane price? If you have any idea what is the rough price that you are telling me there? I think the present delta is around INR 4. INR 4, which is in favor of propane. So most of these Morbi players have dual feed system. So if the delta is INR 4, then there should be a full switchover to propane, which is not happening. So you are selling 3 MMSCMD only to those players who don't have a dual feed, right? Because the delta is quite high. No, it's not like that. Even though there is a difference in price, but still customers prefer the mix of both the fuels, natural gas and propane. Okay. And that is essentially so that they can keep one foot in one boat and the other foot in the other boat, or is it because it's economically better? Actually, most of the plants, most of the ceramic plants are continuous process plants. Okay, so they have to rely on natural gas. It's very difficult for them to move out completely from the natural gas. Okay. So therefore, there is never a 100% switchover. There is a certain amount of natural gas that comes into every ceramic plant, is what you're trying to say, right? You are correct. You are right. All right. Thank you very much. Thanks. Thank you. Next question comes from the line of Vivekanand S from Ambit Capital. Please go ahead. Yeah. Extending Probal's question on the gas sourcing, I understand that some of your contracts, especially the Petronet and Shell contracts, they are expiring in 2025, right? There is a 3 MMSCMD -3.5 MMSCMD contract. And another contract, I guess, which is with Reliance, is also perhaps it has expired in December. So if you could tell us what your strategy is for the sourcing here on, because the market, contrary to what investors were expecting about six months ago when spot LNG prices, everyone was talking about a gas glut and spot LNG being priced at $5-$6. On the contrary, now it's like $14-$15, right? So how should we think about the mix between long-term sourcing, spot, and also the pricing in terms of percentage gas slope or Henry Hub as you may want to ink those contracts? Thank you. Yeah. See, we are aware of the contracts which are expiring, and one of the contracts has already expired with respect to Reliance. So basically, as GSPC is the sourcing partner for Gujarat Gas, they are already in negotiation for long-term agreements with respect to replacing those volumes. So at an appropriate time, we will be informing the market with respect to the new agreements we will be getting into. Okay, and could you give us some color on how GSPC's performance has been for the nine-month period? It would be nice because the company is going to merge into Gujarat Gas, and it will be good to have some visibility of GSPC's performance as well. Yeah. The half-yearly, the company had a turnover of close to INR 11,000 crores, and with an EBITDA of close to INR 1,200 crores, and the profit after tax of close to INR 900 crores. Okay. Yep. Thanks a lot. The details are available on the website of GSPC. You can have a look at that. Okay. Thanks for guiding me on that. Yeah. Thank you. All the best. Thanks. Thank you. Next question comes from the line of Amit Murarka with Axis Capital. Please go ahead. Yeah. Hi. Good afternoon. Thanks for the opportunity. So firstly, on the gas sourcing, while you mentioned that there was a 45% shortfall, could you provide a full mix of the sourcing that you had in Q3? Yeah. Okay. Yeah. We can tell you that. Basically, the majority of the gas coming from GSPC with respect to the long-term, that is just as we mentioned, the Petronet thing, the spot thing, which is spot was close to 2.33 MMSCMD, which GSPC supplied for the shortfall, and then basically, we had other domestic sources also which were coming in the form of IGX. We sourced close to around 1.35 MMSCMD from the other domestic sources. That includes the IGX, the Enertech, the GAIL, New Well Gas. New Well Gas was close to 0.54 MMSCMD. So 6.16 MMSCMD was sourced from GSPC, and the rest 1.35 MMSCMD was from the other domestic sources. When you say 2.33 MMSCMD from GSPC, you're talking of spot LNG over there, is it? Yeah. 2.57 MMSCMD was the spot. Of the 6.16 we sourced from GSPC, 2.57 MMSCMD was the spot. Understood. And you've signed no new contracts, you're saying, in Q3. So more or less, it's the same. In fact, some have expired. Okay. Fine. And also on the non-Morbi volume, so it has been inching up every quarter as we see. Generally, what is the outlook on that now? Outlook is very positive. And apart from our existing area, we are setting up more network in the temporarily new area. That is Ahmedabad, rural, Dahej, Kolsar, and some portion of Punjab also. Okay. Okay. Understood. Also, lastly, on CapEx, generally, what is the plan, CapEx, for next year now, FY26? Yeah. We are planning close to INR 1,000 crores, not less than INR 1,000 crores. The budget process is going on, so we are estimating around INR 1,000 crores. We'll be coming with those exact numbers maybe in the next quarter. Right, and this year also would be similar, or how will it be? Yeah. This year also will be similar. This year we'll be having around close to INR 800 crores - INR 850 crores of CapEx would be there. Okay. And just lastly, on the scheme of CNG, where you were planning to kind of do it on a dealer-owned model. So any progress on that? We have already signed more than 50 dealers' agreements with them under the Act 2 scheme, with the condition that you have to build your station within one year from signing of the agreement. I think the clock has started ticking. Apart from that, we are in discussion with other OMCs also, and they are also interested in getting into this scheme. Sure. So is there any time commitment for these 50 agreements you've signed that this CNG station is set up? One year. From the date of signing of the agreement, you have to build, means you have to commission your station within one year. Right. And these will be what, a couple of stations per agreement, or how is it? Pardon? No. One field. By 50 agreement, you mean 50 stations, is it? Yeah. You are right. Okay. The 50 agreements which have been signed, they have a one-year period to operate those CNG stations. That's the commitment from their side. We are in the process of signing. At least we'll close 100 in this quarter. Got it. Thank you very much. Yeah. Thank you. Next question comes from the line of S. Ramesh from Nirmal Bang. Please go ahead. Thank you. So if you look at your Petronet stations and the OMC stations and the franchisee stations, now they are pretty much the lion's share of your CNG outlets. So the kind of margins you are earning in CNG, what is the kind of commission you have to pay for the existing arrangements with all these dealer-owned outlets apart from the COCO outlets? And for the new agreements, would the commission rates be similar? And to that extent, if you get the volume growth, assuming that goes into your gross margin, it will directly go into your EBITDA per SCM. That would possibly be an upside. So is there any increase in the commission you have to share for these new Petronet agreements? Actually, I mean, this is not apples to apples comparison because the kind of scope of work in our existing franchisee agreement and the agreement which is the Petronet agreement, there's a difference because OpEx and CapEx is in the scope of the dealer. But I'll still share the number. In the Petronet scheme, for online stations, the commission will be in the range of INR 8 per kg, while for the Daughter Booster stations, it will be in the range of INR 10 per kg. So if you look at the ROCE on your CNG business, that's the moot point. So at the EBIT level, all these differences get evened out. So in terms of the ROCE for your CNG business on this Petronet model, would it be similar, or would it give you some incremental basis point increase in your ROCE, given that it's an asset-pled model? And how much would that spread be? Yeah. See, I think with respect to ROCE, the ROCE will definitely increase because we'll not have a capital base for that, for the Petronet model. Okay. So. The entire investment is being taken care of by the dealer himself. And with respect to certain expenditures which we are incurring today for the franchisees, that also with the INR 8 takes care of the entire cost with respect to operations. So there is no additional expenditure on Gujarat Gas with respect to more than INR 8 from these stations. So with respect to that, this will be a better return model for us. Okay. So when you talk about the CNG vehicles, that number doesn't shift. So is it possible for you to give us what is the addition of CNG vehicles in this quarter or nine-month period, and what is a more reliable number for the CNG vehicles in your GAs? I think in Gujarat, we had close to 30% of the four-wheelers being sold from CNG itself. So that's the quarter number. But what would be the delta? So if you want to, because other companies give the vehicle additions, if it's possible for you to give that number, at least in future calls, that would be useful because that 4 lakh number doesn't change in any call. So in terms of the incremental growth, that vehicle addition data would be useful. So that is just a suggestion from my side. So on the GSPC half-yearly numbers, can we get the volume of gas trading they would have done in this half-yearly number if possible? With respect to the volumes, which with respect to GSPC you are talking about? Yeah. Yeah. It will be close to 11 MMSCMD -12 MMSCMD. 11 MMSCMD - 12 MMSCMD. So in terms of one post-merger, compared to what they are earning now, what is the kind of levers you have to improve that marketing margin, given that there's a lot of competition and sensitivity involved? So is there a sacrifice you may need to make in the marketing margin and settle for volume growth to give you the overall growth in EBITDA and ROCE? How do you see that situation, say, once the acquisition is completed? Yeah. I think there's a lot of synergy when the merger happens. The thing is, we are into these GAs wherein there is a volumes already out there. Basically, Gujarat Gas is only catering to volumes up to 50,000. And Gujarat GSPC takes over more than 50,000. So basically, the marketing infrastructure which is there already in place in Gujarat Gas will be definitely an advantage for the combined entity with respect to selling off gas volumes. And now we are looking at the entire pan-India with respect to the expansion of gas volumes now. So we have a better force to take care of that now. Okay. Thank you very much. I'll join with you. Thank you. Next question comes from the line of Varatharajan Sivasankaran with Antique Stock Broking. Please go ahead. Thanks for the opportunity. I just wanted to check on this hydrogen blending. What is the kind of proportion we do as of now, and what is the cost of buying of hydrogen? And going forward, what is your target? Yeah. I mean, currently, we are actually doing a pilot project with NTPC. There is around 200 houses that were in the NTPC Kawas out in colony. We have made arrangement with them, and the green hydrogen is being supplied by NTPC, and they are charging us at the same initial gas price charge. It's something which is not procured by us, not being taken on a commercial level at this juncture. We have completed the blending and testing at 8%. It was initially started with 5%. Then we went to 8%. The 8% model has also been successfully approved, so now we are gearing up our system to increase it to 15%. We are seeking regulatory approvals in this regard, and once we have regulatory approval in place, we go ahead and increase the blending level from 8% to 15%. So this 8% is across all the GAs, is it? No. No. It's only a pilot project. It's not being taken up on a commercial basis at this juncture. It is only a pilot project restricted to Housing Colony of NTPC Kawas. Okay, and how about the CBG blending as of now? CBG, I think we are the first company to have CBG connected to our network, and we are recently in the process of signing at least six more CBG supplier agreements. Presently, there are three CBG suppliers with whom either we are taking the compressed biogas or we are taking gas into our network. Yes. And finally, sir, on the CapEx front, like you were mentioning, the numbers of INR 850 crores and INR 1,000 crores. Now, this is like in future, when we have the explosion of 100 or 150, whatever that number is going to be over the next 18 months, will we still have this kind of a CapEx intensity on our books? Yeah. We'll still have it because the reason being we are targeting to convert most of the CNG stations online. So there will be an investment with respect to that. CapEx would be there. Thanks a lot. I'll come back to you. Thank you. Next question comes from the line of Yash Nandwani with IIFL. Please go ahead. Good afternoon, sir. Sir, I believe the Morbi cluster was initially scheduled to undergo a one-month shutdown starting in January, but now it has been delayed. So could you please provide an update if they are planning any shutdown in the near term? I don't think so, they are planning any shutdown in the near term, neither we are getting any feedback from the customer's side. Okay. And second question was, do you still maintain your EBITDA margin guidance of INR 5-INR 6 per SCM? No. We will be revising it to INR 4.5 - INR 5.5 now, especially in light of the APM gas reduction. Okay. Thank you, sir. Thank you. Next question comes from the line of Shubham Shukla with Voyager Capital. Please go ahead. Hi. Good afternoon, everyone. Can you hear me? Yeah. We can hear you. Okay. Sir, my questions are largely from industry's point of view. I've recently started tracking the natural gas sector. I'm quite new into this, so please help me understand the macros here. Sir, in the last 10 years, our natural gas volume consumption has grown like 2%-3%. And we have targeted to reach 500 MMSCMD by 2030 and double our share in overall energy consumption from 6%-15%, 6%-15%. Sir, this will require high digit volume growth, which we haven't seen. The consumption is very low. So what is the 6%-15% story? What's stopping us? What are the obstacles? Does national gas grid completion play any pivotal role in this? Yeah. I think you need to look at it in a perspective from each state to state. For example, whatever you are trying to say from an India perspective, look at Gujarat. The consumption ratio is close to 25%. So we have almost exceeded the limits which even the Government of India has provided. So that's the reason being we are totally connected to the grid, and all the cities are practically having the PNG network. So if that type of setup is coming up in each of the states, so basically, we'll definitely see an increase in the levels of consumption with respect to that. All right. So you don't have a national perspective view apart from. National perspective, the national grid will play an important part. There are isolated places where you have grids in bits and pieces. That needs to be connected. Just as electricity has to be connected, we have to connect the gas grid together. So automatically, the free flow of gas happens from the sources to the end customers. So that is the very critical point in basically increasing the consumption going forward. Okay. So on the consumption side, we know fertilizer is the largest consumer in this sector. But CGD has taken second spot after. Power sector used to be the second one. Do we expect any change in these top three spots going ahead by 2030? Will CGDs continue to outperform or take first spot? See, the volume which is required in fertilizer and the CGDs industries are totally different. Okay So that's the reason fertilizers will be on top. But gradually, CGDs will pick up because once penetration happens with respect to the network in each of the GAs which the government of India has allocated, automatically, the scales will increase. But to reach a scale within the power sector or the fertilizer sector is different because the volume requirement over there is different. Okay. Sir, if I can squeeze one more question. PNGRB has announced these common carriers. I'm finding it difficult to understand if you can explain a bit what exactly this is. Is it similar to what this unified tariff, what they are trying to get? It's okay with fixed ROC. You can have a similar type of what we have in GAIL's business or in transmission business. Is it similar in any way? Is it similar to that? Common carrier concept is already prevalent in the transmission business, where entities of the transmission companies like GAIL and GSPL are required to make available 25% of their capacity for common carrier use. So any third party can use it. 75% is something which is available for their own use or being used as a contract carrier. Similar concept is trying to be introduced in CGD business also. But CGD business is on a very different footing as compared to the transmission business. And the model of common carrier implementation in CGD business, I think, is our markets are still not mature enough to do that. First time, PNGRB introduced this regulation in 2020, 2021. So we approached Delhi High Court and obtained a stay order on that. Stay order was continuing till now. And very recently, around June, July 2024, PNGRB has modified, has retained the earlier regulation and came up with a new regulation. Maybe one of the reasons could be to overcome the judicial challenge which was posed by GGL and other CGD entities. So even for the current regulation, we have approached Delhi High Court and obtained a no-coercive order, a favorable stay order from Delhi High Court. So PNGRB started a consultation process, but they cannot take any course of action against us. That's what the perspective is on common carrier for CGD business. All right. Sir, just one question to a company related. Like you mentioned, the delta between propane price and our gas prices, which is roughly INR 4. Have you calculated anticipated impact which we will have due to this? Because we can't just change it because our sourcing is already expensive because of the APM cut. See, I think we have gone through these cycles earlier also. And basically, we have seen this INR 4 difference, I think, the month of June, July, August also. July, August, September also. That is the Q2 of this year. So I think the volumes would be there. It will be under pressure over there. So basically, we are looking at a volume maybe of 2.75 MMSCMD-3 MMSCMD. That's the range which we are anticipating. Okay. All right. That's it. That's from my side. Thank you so much. Thank you. Next question comes from the line of Sabri Hazarika with Emkay Global. Please go ahead. Yeah. Good afternoon. So I have a few questions. Firstly, in terms of your fall in EBITDA, say, for example, QOQ, it has fallen from, say, around INR 500 crore to, say,INR 400 crore, excluding other income. So how much of it was due to PNG, and how much of it was due to CNG? We don't maintain that breakup between the two things. Okay. But roughly, out of the INR 400 crore, how much would be the contribution of the CNG segment? Rough cut number will also be. Rough cut in the sense? See, I think we look at it from an overall level. So we don't bifurcate between the things. In terms of segmental EBITDA, any color on that? No. No. Okay. Secondly, regarding your merger process, you have mentioned that next week we will be filing for approval with MCA, right? Yes. Okay, and after that, what else could be there? Yes, sir. In case of non-government companies, the approval for a merger or a scheme offering will require from NCLT. But in the current case, in the present situation, all the companies involved in the scheme are government companies. That's where the mandate is to obtain a regulatory approval from the Ministry of Corporate Affairs. The moment we have approval from MCA, the scheme will be filed with ROC, and that will be the effective date of the scheme. Before MCA finally approves the scheme, there are some processes to be followed. We have to get an NOC or no objection from regulators. We also have to move and convene a shareholder meeting and get clearance from them as per the legal requirement. Got it, sir. And regarding, I mean, you mentioned Morbi volumes, you're expecting 2.75 MMSCMD-3 MMSCMD, right? Yeah. Because of the price difference, and especially the propane prices coming down. Okay. Fair enough. And right. And this 4 lakh vehicles that you have mentioned that you have under CNG, what was it one year back? 4 lakh? Yes, ma'am. 3.5 lakh, around 3.5 lakh -3.4 lakh. One year back, right? Yes. Okay. And, sir, just one last question. So I was looking into the GSPC number that you have mentioned. So the profitability seemed to have, I think, gone up significantly. So your volumes have remained 11-12 MMSCMD only. Anything particular, I mean, because of high margin, because of arbitrage, or was there something else also? No. We have been selling to other sectors of the fertilizer, etc., so basically, in the first quarter, we have under margin because of selling from there, and we had sources of gas which were cheaper, so basically, we could bid for the sales which were happening because fertilizer and other companies come through a bidding process, so we were successful in those bidding, and we were able to source it at a competitive price. Okay. GAIL seems to give us a margin guidance. So do you have an EBITDA guidance for GSPC? I mean, minimum guidance. I know it can be anything. Of course, there could be exceptional circumstances also. But looking into a normal picture, I mean, previously, INR 1,100 crore, INR 1,200 crore was the number which we seem to have assumed. So that holds, or is there any change? I think this is a Gujarat Gas call. So basically, I will not be in a position. But you can always take the previous numbers as a base to estimate that. Got it. Fair enough. Thank you so much, and all the best. Thank you. Next question comes from the line of Kirtan Mehta with Baroda BNP Paribas Mutual Fund. Please go ahead. Thank you, sir, for the opportunity. For the GSPC, would you be able to share the EBITDA split between Gujarat Gas and other customers as you have done in case of these mergers? EBITDA split in the sense? How much EBITDA GSPC earned from trading with Gujarat Gas, and how much was attributable to the other customers? No. I don't think we maintain that. See, with respect to Gujarat Gas, we have to do an arm's-length sale. So that's always on an arm's-length basis a sale is happening because of the related party transaction which is there. Right, sir. Second question was about the FDD model. Would there be any restrictions for dealers to CNG station to shift to the other alternate supplier in case the open network scheme gets implemented? I don't think so because the land and the equipment, we have taken it on a lease. Right, so basically, FDD model in that sense, would our risk be higher that dealer can offer an alternate supplier? I mean, does it increase the risk for us? No. There's no risk. Taken care of the risk regime which you are referring to in the FDD agreement which we have signed with the dealers. Sorry, could you repeat, sir? I didn't follow. Taken care of the risk which you are referring to in the FDD agreement which we have signed with the dealers. So what kind of restrictions would be there on the dealer? That is what I wanted to understand. It means for a particular purpose. So the sensitivity of the agreement has to prevail, and it has to be utilized for that purpose only. Sure, sir. Thank you. Thank you. Next question comes from the line of Pratyush Kamal with InCred Capital. Please go ahead. Yes, sir. I still have a couple of questions. First is regarding the PCT reduction of propane from 15% to 2.5%. I just wanted to understand the impact which will have on the spreads between the propane and the gas which we are selling to Morbi and some other places, particularly the industrial customers. And second one is regarding understanding if natural gas comes under the purview of GST, what is the kind of benefit which you are expecting to have? And what are the kind of benefits which the customers are going to have in terms of the reduction of the prices? And what are the kind of VAT rates which you currently fear or which the customer will have when the gas finally reaches out to them? So these are a few of the questions which I have. Yeah. Could you repeat the first question? We could not get you. Yeah. So in the budget, there was some kind of provision where the propane prices, the liquefied propane GST, has been reduced from 15% to 2.5%. So what's the kind of impact which we are probably going to have on the spreads between the propane and the other natural gas which we sell to our industrial customers? No, no. I think there is some miscommunication which is there. The propane which is being sold at Morbi, etc., where there were concessional rates, that were at 2.5% already, they were at concessional rates. So what has happened in the budget, they have changed the general rate from 15% to 5%. But already, the concession was already concession notification was already in place for that, for the lower percentage of tariff. So there is no change with respect to the tariff which is there, with respect to propane. Understood, sir. And how about the GST one? What's the kind of VAT which the customers are currently paying in Gujarat, wherever your customers are there, in terms of CNG and PNG domestic? And if the natural gas comes under the purview of GST, what's the kind of benefit which you are expecting to get from it? And plus, what's the kind of cost reduction, the price reduction which customers can expect from it coming under the purview of GST? Yeah. See, the CNG is close to 5%. And for industrial customers, the effective rate is 6%, which Gujarat Gas has to claim the refund of 10% from the government. So only the benefit for GST coming in is basically they can get the input credits. Today, this percentage is a cost to the customers. So that's a huge benefit with respect to the customers. For example, propane, it's under GST, so they get the benefit of that credit. Again, the input credit is available for them. Once this comes under that, automatically, there will be a definite increase in the gas consumption going forward because it will be much competitive with respect to other fuels. Understand, sir. And does it work this way that you take up the gas from GSPC, and there is some kind of VAT which gets imposed when the ownership gets transferred from GSPC to Gujarat Gas? And when you sell it to the customers going forward, then there is, again, 5% of VAT which you just mentioned has been put on the customers. So does the value then look like this, or how does it usually look? No. For example, gas is under VAT. So GST would get the input credit for that. Input and output credit would be there. So only the incremental value would be taxed to that extent. Only thing is the end customer would be paying that as a cost. So he will not get any credit for that. So for that, the cost is added to his product there. So for him, once it is coming under the regime, then automatically, he gets an input credit for that also. Understood, sir. Understood. Thank you. Thank you. Next question comes from the line of Yogesh Patil with Dolat Capital. Please go ahead. Thanks for taking my question, sir. Sir, we wanted to understand the PNG industrial potential at Morbi in a long run. In the last two calendar years, we are not able to cross the Morbi volumes beyond 3.8 MMSCMD on average basis. So the question is, what is the real potential of PNG industrial volume at Morbi so that we can build up the same in our model for the long term? And sir, if possible, can you also update us on the propane link contracts for the Morbi ceramic units which floated a year back? And how many units have shown the interest into the contracts in the last one year? Actually, if you see the market size, presently, we are of the range of 8 MMSCMD -9 MMSCMD. And with that kind of market size, and in the past also, we have reached sales more than 7 MMSCMD gas in the Morbi market. So it's a matter of economics, and we are connected to all the customers in the Morbi. So once the price and everything will be in our favor, if natural gas is in favor, we will again regain that volume. And for that propane link GSA, gas sales agreement, we have received more than 150 customers' response. We are just waiting for the right time, right moment to get into that. Okay, and sir, if possible, can you give us an overall volume growth guidance for FY26 and any in-house projections of Gujarat Gas for FY25 exit volume rate? We are in the process, and it's premature to give it to you right now. Any ballpark number for the FY26 volume growth guidance? See, I think you need to understand that one-third of the volumes are coming from the industrial customers, which are practically linked to the volatility in the gas and the propane prices. So for the rest of the areas, that is the CNG and the domestic customers, the CNG has been growing at close to 12%, and we see that growth coming in. And the domestic is also moving at close to 5%-6%. That will also, we'll be sustaining that growth or maybe exceeding that growth. But with respect to industrial, it is the area where we are, it is very difficult to estimate the growth. Basically, if the spot prices come down and it goes below propane, basically, we may be even selling 5 MMSCMD over there. Okay. Thanks a lot, sir. Thank you. Next question comes from the line of Amit Murarka with Axis Capital. Please go ahead. Yeah. Hi, all. Thanks for the opportunity. Also, regarding the GST thing again, so any sense that you get as to by when can this make progress? There's quite a bit of anticipation some months back, but nothing happened. We are also anticipating the same thing as you are anticipating it. Okay. So there's no visibility as of now that even if this year, it could happen or not? Yeah. We are expecting it should come in, but when it is, that's the biggest question to be answered. Right. And you also mentioned that you have to claim some 10% tax from the government. What exactly is that? No. The industrial, we are selling at 16%. And basically, we get a refund from the government. The customer pays 6%, and 10%, we claim a refund from the government. This is for within Gujarat sales, you mean? Yeah. Within Gujarat. Yeah. That is the VAT within Gujarat. That's the concessional thing which the government has given to the industrial customers. Got it. Got it. And out of Gujarat, it's 16%. Okay. Thank you. That's all. Thank you. Next question comes from the line of Kartik Kohli with CLSA. Please go ahead. Hi, sir. Thank you for taking my question. Just had a quick one. So you mentioned that our price is roughly around INR 47 for Morbi region. And what will be the price for the non-Morbi region? It will be around INR 3 more. INR 3 to INR 2 more. INR 2 more. Yeah. So INR 49. And what is the landed price of propane? You said that's INR 4 less. That's the landed price at INR 43. Yeah. Yes. Yes. Yes. Okay. Thank you so much, sir. Thank you. Next question comes from the line of S. Ramesh with Nirmal Bang. Please go ahead. Hello. Thanks for the follow-up. So when you are discussing Morbi, the 3.35 MMSCMD which you did, what is the overall energy consumption in Morbi in 3Q, and what is it now? You take both PNG and propane together? More or less 50/50. More or less 50/50, I can say. Okay. 6.5 MMSCMD. So if you look at the tile sector now, there are a lot of concerns about the tile export growth and the operating rate there. Obviously, the freight rates have come down. So how do you see the tile operations going from here? Do you see improved utilization and exports, or is it still some time away because of the global sort of, what is your reading of the tile market, which is important for your overall energy demand there? Now, if you see the latest geopolitical scenario and the way, I can say, Trump government is working and the kind of initiatives they are taking in the Middle East and surrounding areas, I think we are hoping that slowly, slowly, but the situation will improve, and it will improve for construction industries in that part of the world. And if that will happen, definitely, demand for tiles and everything will be increased. And so the volume of Morbi will also increase. Okay. Thank you very much, and we shall know. Thank you. Next question comes from the line of Somaiah V. with Avendus Spark. Please go ahead. Thanks for the opportunity. So first question, would it be possible to give some color on what would be the marketing cost that we will be paying on a blended basis at a portfolio level? Marketing cost for what? What will be our marketing charges that we'll be paying, let's say, for a long-term contract or a spot contract that we purchase? There is no marketing charges separately. So when we procure these long-term contracts, let's say, on a Brent basis, let's say, Brent is $80, and then we have a slope, let's say, for 34% of slope, $9, $9.5. So by the time it reaches to us, what are the additional costs that we end up paying over and above the underlying commodity cost? Okay. You are saying that from the day, from the landing to the burner, what is the cost which you have been incurring? That's basically the regasification charges there and the transportation charges there. Sorry, the regasification? Transportation. Okay. Got it. Also, from a sourcing standpoint, would our strategy remain the same in terms of how much amount of? Sorry, your voice is not clear. Can you keep going? Sorry. I'm not able to hear you. From a sourcing, we continue to have a 30%-35% kind of a spot exposure, or how are we thinking about it, especially with our contracts coming up for renewal? And also, second thought there, so in terms of Brent versus Henry Hub, so will we continue to prefer Brent only, given that we have a competition with propane? So just wanted your thoughts on that. Sort of going forward, we will have a portfolio that will have a combination of Brent as well as Henry Hub going forward. That's how we are looking at new agreements also. Spot, will we continue to have the 30% kind of a spot mix, or try and reduce it? How will you think about it? No. But gradually, when we see, the problem is the APM gas allocation is fluctuating. So once I know the final allocation or the scenario which is there and the stability in the volumes which are going to come in, then automatically, I'll go and hedge it off against the long-term contract. I'll not always be dependent on the spot which is there because that's not always advisable, especially when I have to have stable margins. Sir, I'm more from the industrial front. I understand from CNG front, for the shortfall, whatever it is, you will try for a long-term contract. But from the industrial portfolio, historically, we've had a 30% kind of spot exposure. Would that continue, or there again, we'll tie up incremental contracts and bring it down? No. That's the problem over there because we have competing with propane. So unless I get into a long-term agreement for sourcing, which is almost linked to a propane, I'll be still dependent on the spot to come in. Okay. Got it. Sir, your spot LNG sourcing cost, if you could give for the last quarter? Spot would be around just a minute. It's around, it was close to INR 41 per SCM. Okay. And what would be the current spot prices? Do you put a number? It has increased to close to INR 48 now. The earlier, the value which we had told was for the entire quarter, and this is the present one which is there. Wonderful, sir. But sir, I also believe, given I mean, the lag impact on the Brent contracts, so we'll probably get some benefit because of that in this quarter because the last quarter, Brent was relatively lower compared to the previous quarter. Yes. You are right. So that lag will come in this quarter. Wonderful. Thank you. Thanks. Thank you. Next question comes from the line of Hardik with ICICI Securities. Please go ahead. Sir, can you share with us more detail on our expansion plan towards how we can grow the volume in terms of industrial volumes and also on the CNG part? Other detailed expansion plan, if you can. I think we have already last call-out, we have told you that basically we are looking at expansion in the newer areas, especially the Thane area, the Ahmedabad rural area, wherein we are seeing a significant growth in volumes. The Dahej area, the Thane, the DNH area, these are the areas of growth for us now. So these are the areas from where even the CNG and the industrial volumes are coming in. Okay. Okay. That's helpful. Thanks. Thank you. Next question comes from the line of Santanu Saikia with IndianPetroplus. Please go ahead. I was just conceptually trying to figure this out. You said your margins will probably come down to about INR 3.5 or something on that sort. So unlike in the fertilizer sector, where, of course, there is a constraint on the price of urea at which you can sell it, you don't have a pricing problem. So if there is a reduction in APM volume, and if you're bringing in volume from outside at a higher price, what constrains you from increasing the price of CNG and domestic household prices? Is it political considerations, or is it something else? With industrial customers, of course, it's a straight one-on-one relationship. No. I think we have increased the prices by INR 3. In December, we increased it by INR 1.5 per SCM, and in January 1st, we increased it by INR 1.5 per SCM. So there is no political pressure as such. So why does your margin come down? Is it essentially because of the industrial pressure? No. It's not of the industrial pressure. See, ultimately, we were getting a source of gas which was cheaper earlier. Yeah. Today, we are not getting basically, there is a reduction in those volumes. That's practically applicable to all my other industrial peers also. No. But we don't need to entirely for domestic CNG, right? You need to understand that we are developing this gas ecosystem across the country. So we need to price it in a manner that over a long term, the growth also happens in this sector. So if I price it more than petrol or if you are willing to petrol, the conversion automatically will come down. But you already have quite a big delta with petrol and diesel and petrol. So you can probably limit the delta and keep raising your prices. You'll still get customers. Or there is a certain delta below which customers are not going to come. Yeah, but I think we have maintained that, and that's reflected in our margins also. Okay. Fair enough. The other question I just had because I couldn't get the details, could you just detail out what are the long-term contracts that you have, and which of them are expiring, and for what volume? I mean, you don't need to tell us what the future contracts are going to be. So that data, you probably have. I think we are getting gas from GSPC to the extent of 6.16 MMSCMD, of which close to 3.5 MMSCMD, 3.25 MMSCMD is with respect to the long-term agreement. That's Petronet LNG or the JCC linked which is there. And only the Reliance gas which has expired now. That's in December, we have expired. The Reliance gas has expired. Other than that, the gas is being sourced from the IGX, the other domestic fields also, and the new well gas except which I have detailed in the earlier reply which I have already given. So I think everyone else has it. So we will come out in except for the [crosstalk]. Yeah. Yeah. Okay. Thank you. Thank you. Last question comes from the line of Parinitha with Morgan Stanley. Please go ahead. Hi, San. I am here. Just two questions. One was, I think, on the long-term sourcing. I think it's becoming reasonably clear that the pricing for domestic gas is going to almost free market pricing over the next few years. So in that context, when you're thinking about sourcing now, is there a way that you want to kind of manage the sourcing over the next few years considering this APM lack of clarity? And the second thing was, in terms of acquisitions and growth inorganically, is there a focus there going forward, maybe after the transaction and the restructuring is complete? Yeah. To the second question, yes, we are looking forward to that once the transaction is completed. We will be pursuing that. The management will take an appropriate call, and even the market will be informed at the appropriate time on that. But your first question was with respect to the long-term sourcing. That's correct. Yeah. Long-term sourcing, we are looking at long-term. We are in talks with the suppliers to replace the gas which is basically the contracts which are getting expired. We are looking at a blend of maybe a Henry Hub or a Brent link also. We will come out with the announcement shortly. Okay. Thank you. Yeah. Thanks. Thank you. Ladies and gentlemen, due to time constraints, we have reached the end of question and answer session. I would now like to hand the conference over to Mr. Sandeep Dave for closing comments. Field management has been focusing on increasing volumes while maintaining a fine balance between volume and margin, and we'll continue to do so during the last quarter as well.