GSPL Transmission (NSE:GSPLTRANS) Q2 2027 Earnings Call

0:00 Ladies and gentlemen, good day, and welcome to the GSPL Transmission Limited Earnings Call Q2 and H1 FY 'twenty seven hosted by As a reminder, all participant lines will be in the listen only mode, I now hand the conference over to Mr. Vikas Verma from Thank you, and over to you, sir. Thank you, Ashi. Good evening, everyone. On behalf of GSPL Transmission Limited, I welcome you all to the company's quarter two and H1 FY 'twenty seven earnings conference call.

0:50 To discuss the performance of the company, we have with us from the management team Mr. Prakash Karnik, Chief Executive Officer Mr. Lokeesh Agarwal, General Manager and Chief Financial Officer, Timothy Rajeshwari Sharma, Company Secretary Mr. Devinder Agarwal, Head Commercial Mr. Sartar Gautam, Head Procurement and O and M. Before we proceed with this call, I would like to draw your attention to the fact that today's discussion may contain some forward looking statements that are subject to various risks, uncertainties and other factors, which would be beyond management's control. We kindly request to bear in mind that there might be some uncertainty while interpreting such statements. We will now start the session with the opening remarks from the management team.

1:38 Afterwards, we will open the floor for an interactive Q and A session. I will now hand over the conference call to Mr. Prakash for his opening remarks. Thank you, and over to you, sir. Thank you. Good evening, everybody, and warm welcome to earnings conference call of GSPL Transmission Limited. On behalf of the Board and the entire management team, I thank our shareholders, investors, analysts and stakeholders for joining us today. I will begin by explaining who we are, how our business creates value, why our network is strategically important and how we intend to build the next phase of growth. GTL is a focused pure play natural gas transmission platform operating on an open access basis. In simple terms, we provide infrastructure that transports gas from domestic production sources, LNG terminals, gas marketers to gas distributors, refineries, fertilizer plants, power producers and industrial customers.

2:37 GTL has a strategic and difficult to replicate network. Our Gujarat network extends approximately 2,900 kilometers covering 26 districts making it India's second largest natural gas network, serving 100 plus customers to 200 plus customer exit points with financial year to 26 contractual volumes of 40 MMseMD. Our network is connected to major district domestic gas supply sources, LNG terminals and consumption centers across Gujarat. What makes our network particularly stagnant is its positioning within Gujarat, India's largest gas consuming state. Gujarat accounted for approximately 22% of India's natural gas consumption in financial year 2026 and host four operational LNG terminals.

3:26 GTL is the only grid connected to all operational LNG gateways in the Gujarat. This connectivity enables us to link multiple sources of gas with diversified base of CGD, refinery, fertilizer, power and industrial customers. Our bidirectional network design and SCADALIT operations further support system flexibility, reliability and 20 fourseven monitoring. GTL is positioned for India's gas led growth. India aspires to be to increase natural gas share in its energy mix from approximately 6% currently to 15% by 2030. Natural gas consumption is projected to increase from 188 MMScMD in financial year 2026 to two ninety seven MMScMD by 2030, supported by organization, industrial and manufacturing activity, cleaner fuel adoption, pipeline expansion and development of LNG infrastructure.

4:23 Within our customer portfolio, we maintain diversified exposure across these end use segments. GTL is positioned to participate in this opportunity because our network connects supply with several of countries' key demand segments. Equally important, our customer portfolio is diversified, which limits dependence on any single end use category and gives us exposure to multiple sources of gas demand. Coming to our business performance, Q2 financial year twenty twenty seven saw broad based growth in transportation volumes across our key grids. Overall, GTL volumes increased from 45 mmHg compared with 40 mmHg in quarter two of financial year twenty twenty six, representing 12% growth.

5:14 HP grid volumes grew 9% year on year. LP grid volumes increased 30%, while HAPI grid volumes increased 16%. Our presence beyond Gujarat is supported by two of our joint venture companies, GIGL and GITL. GIGL operates approximately fourteen thirty nine kilometers of cross country pipeline across Gujarat, Rajasthan, Haryana and Punjab, while GITL operates approximately three sixty five kilometers pipeline connecting Andhra Pradesh and Telangana. Another important focus for us is creating capacity for the next phase of the growth. We are progressing on expansion led CapEx program of approximately INR 3,500 crores, growing more than 10 pipeline and connectivity projects aggregating to 700 kilometers.

6:03 Combined with our existing approximately 2,900 network, these additions are expected to expand our overall Gujarat network to 3,600 kilometers. Project execution is gaining momentum with several projects now at advanced stage of implementation. In July 2026, we awarded EPC contracts worth INR 1,800 crores for Anjar Palankur pipeline project. Other projects under implementation include Jamnagar Dwarka, Wafi Tarapore, Dahesh Bhagavuk and multiple spur lines and customer continuity projects. Our approach going forward remains centered around expanding network reach, improving utilization, maintaining asset integrity, discipline, capital allocation and diversifying our customer base.

6:51 We believe our established infrastructure, strategic connectivity and planned expansion provide a strong platform to participate in growth of India's natural gas ecosystem. Over the next two years, our focus remain on disciplined execution and maintaining operational and financial stability. As the ongoing expansion projects are commissioned, we expect additional capacity to progressively contribute to the growth. Looking ahead, our priorities are clear. First, expand network reach and connectivity. Second, improve utilization across our existing and new assets. Third, maintain safe and reliable operations through automation, preventive maintenance and strong asset integrity practices.

7:37 Both broaden our customer base and fifth, preserve financial discipline as we execute our investment program. We believe GTL combines the characteristics investors expect from high quality infrastructure, a strategic and difficult to replicate network, a regulated and asset backed business model, diversified demand exposure, visible expansion opportunities and a debt free balance sheet that provides financial flexibility. With this overview, I will now hand over to our CFO for detailed discussion on operational and financial performance for Q2 and H1 financial year 2017. Rakesh? Thank you, sir. Good evening, everyone. We will have a brief overview of the financial performance for the quarter and half year ended 09/30/2026.

8:30 In terms of key financial metrics, our standalone revenue from operations for Q2 twenty twenty seven stood at INR290 crores, representing a growth of 8% year on year versus previous year Q2 actuals of INR267 crores. On a sequential basis, the growth was at 4.5% versus INR277 crores in Q1 twenty twenty seven. On a half year basis, the H1 twenty twenty seven revenue stood at INR567 crores compared to INR $5.42 crores in the same period last year, registering a growth of again 4.5%. EBITDA excluding non operating income, which primarily includes interest from deposits, stood at around INR169 crores in Q2 twenty twenty seven as compared to INR168 crores in the same period in previous year.

9:30 EBITDA margin for the quarter stood at 58.4%. On a half year basis for H1 twenty twenty seven EBITDA stood at INR363.5 crores, being in line with previous year half year EBITDA of INR362.9 crores with an EBITDA margin of 64%. Profit after tax on a stand alone basis stood at INR 120 crores during the year versus INR 118 crores in the previous year's Q2, being an increase of around 2%. On a standalone half year basis, profit after tax stood at INR258 crores versus INR255 crores in the corresponding period last year.

10:17 Again, an increase of roughly 1.2% or so. The current state of balance sheet provides us with enough financial flexibility to execute our investments. We have already announced investments worth more than INR 3,500 crores and we stand in a pretty good state to execute the same. As of September 30, we are debt free and have a net worth of approximately INR 7,150 crores. In half, first half of the year, we have executed CapEx of approximately INR 300 crores and this is in general in line with our expansion program, which we have announced earlier.

11:10 I now open the floor for questions and answers and hand over to the moderator. Thank you, everyone. Thank you, 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 is from the line of Mr. Yogesh Patel from Daulat Capital. Please go ahead.

12:00 Thanks for taking my question, sir, and wish you happy Diwali to all of you. The question first question has related to the expansion plans of 3,500 crore. What would be the debt to equity ratio for this expansion plan? And have you received the Board approval for raising a date for this expansion plan? Yes. So see the expansion plan is spread over a period of another two hundred, two point five years from now. And whilst we believe that we will be in a good state to complete this expansion through our internal accruals and current cash balances, If at all we are required to resort to limited financing, we would do that. We have significant financing approvals in place. We do not need to go for any subsequent approvals to execute these projects.

13:01 I think there was one more part of your question. Yes, sir. So all of these projects are duly approved by the Board and are in various stages of implementation. So there is per se, I won't say there is nothing much which is still on the drawing board. Almost every project is now in the execution stage. Although these may be in various stages of execution, but almost everything is on ground now. Generally, we follow the 70% to 30% kind of a debt to equity ratio for the pipeline projects. So we will not follow that kind of rule for the 3,500 crore kind of expansion plan. Is that a correct understanding?

13:51 It largely depend upon our internal cash flows, which will continue to support all these expansion plans. Is this a correct understanding about this? Sir? Sir, you're not audible? The management line, if you're speaking on mute, please unmute yourself. Hello? Am I audible?

14:37 Yes, sir. You are audible. The management line is on mute. Ladies and gentlemen, the line for management got disconnected. Please stay on the line while I reconnect them. Yes, sir. You can go ahead with the answer. Yes. Sorry, Yuges. I think we got disconnected. So I heard you saying the normal funding ratio is in the proportion of 70 to 30, and I take that well. But here, we believe at this stage in time when we have limited projects in hand and we know our requirements well, we believe we should be good to execute basis the internal accruals and current cash balances.

15:36 Certainly, continue to evaluate various options before us. Not that what we do now in stone. We continue to evaluate our current project book I would say. So in case anything else materializes, we will certainly look at even raising debt. Are as of now we are not short of funds. So that's not something which is like high on the agenda right now. But as we evaluate projects, if something exciting comes up, we will certainly not shy away from going for that. Sir, the conclusion of question was like that a 12% post tax ROCE kind of returns we generate on the cash transmission pipelines.

16:25 If we are not taking a date, then the cost of a date general low and the cost of equity generally higher. And most of the internal accruals is considering equity, which will be deployed for the expansion of all the pipeline. So all in all, our returns will be limited. That was the thing. But yes, I mean, I got from your side. My next question is on your presentation side. You have provided a transmission volume detail since Q1 FY 'twenty six. We are trying to match the same with the earlier one. Like, for example, in a quarter second FY '26, earlier you had provided a twenty eight five SCMD volume. And now in the latest yesterday's presentation, you have mentioned the 40 SCMD.

17:13 How one should correlate or interpret these numbers for the same entity? Can you please elaborate? Yeah. So, the difference lies in the way we put across the numbers. So previously, the numbers that was being shared were physical numbers. Basically, physical molecules which would travel. Now these are the contractual numbers, which appropriately reflect in revenue as well. So and I think the way we were sharing data previously used to create a lot of mismatch and lot of cushions around how we were reporting numbers. So we have tried to set this right in this first presentation, in this first outreach that we have with our investors.

18:08 And hopefully, we would be able to correctly correlate our revenue with volumes going forward. If this is a contractual volume, then in case of high pressure pipeline, we try to back calculate the tariffs based upon the net of expenses revenue you have provided for the high pressure pipeline and the volume also you have provided. So it comes little bit on a lower side instead of 18.10 rupees per MMBtu, it comes around 17.5 rupees per MMBtu. So why this difference will be coming? Any any any clarity on this side? There would always be some variation. This is the gross calorific value.

19:00 So it may be very, very difficult to correlate exactly in terms of the tariff versus the transportation volumes. There would be some mismatch, but I believe what we provide now would sustain on a longer term. Sir, my next question related I'm to sorry to interrupt, Mr. Yogesh. Can you please rejoin the queue for follow-up questions? Yes. Sure. Sure. I'll come back. Thank you so much. The next question is from the line of Mr. From Nomura. Please go ahead, sir. Hi, sir. Thanks for the opportunity. So on the existing pipeline from, I think, 2,900 kilometer, what is the existing useful life of this pipeline?

19:49 I think also the next tariff revision, when is the date? The the useful life of pipelines per se on record, it would vary from, I would say, from section to section as to when these were actually installed. And typically, the the first useful life that we ascribe is to the extent of thirty years, but not that the pipeline cannot be used beyond thirty years. So these would always be subject to recertification reviews and increase in life of pipeline. There was a second part to your question.

20:35 Can you repeat? When is the next tariff revision coming in stage? So we the the last revision was in '24, I think in April '24 against a filing made in '23. So so we would go for next revision somewhere in '28 or so. And sir, by 2028, when there is a next revision, will the pipeline be completely used of the useful life of thirty years or will there still be some life left? Because I'm asking because after thirty years, we'll have to get a special approval for extension and then that it will have to come down meaningfully from current levels. Yes. So so prior to filing of, say, any revision, we will certainly review the life. And if if there is a need for any revision in in the life of line pipes, we will certainly obtain necessary certifications.

21:34 Typically, PNGRB allows an increase in life of up to ten years in a single tranche. And to your another part to the same question, we don't believe it will lead to reduction in tariffs. It it may or may not lead to positive impact, but it will certainly not lead to a reduction in tariffs. That is what we believe. 12% ROC based on the current net asset value, right? So because of depreciation, your assets get depreciated, the value comes down. So 12% of ROT, that is what you will use to get the tariff number. So it has to come down, if I'm not wrong. So so there are two factors.

22:22 Whilst I agree that it will be 12% on current net asset value, there is also an element of the value of asset at the time of retirement. So so that benefit gets stretched beyond 10. So so we... You get that benefit as well. And, of course, you get benefit of OpEx too. And, sir, what is the current net cash in the book including the deposits? So that would be to the extent of approximately INR 1,800 odd crores now. And is this, I guess, our deposit from the customer or this is the cash belongs to you? No. No. Largely, all of this belongs to us. The deposit from customer would be not a very significant amount.

23:13 Okay. And I'm sorry, Benito. Can you rejoin the queue for follow-up questions? Thank The next question is from the line of Sabri Hazarika from MK Global. Two questions. Firstly, so can you give us a road map of how this INR 3,500 crore CapEx program would percolate into tariff hike once it comes due in 2028?

24:03 By that time, what would your capacity look like versus what it is now? And how much would be the CapEx which you will present before PNGRD? And roughly, what kind of like tariff hike you are expecting from that? Management line? We cannot hear you. Management line. Management line, we cannot hear you.

24:57 Ladies and gentlemen, the line from management got disconnected. Please stay on the line while I rejoin them. Yes. Management line, you can go ahead with the answer. Sorry. We we didn't even get to hear the question. Yeah. So so I'll repeat. Yeah. So just like... I mean, this whole CapEx program of 3,500 crores spread across, say, two years. You said the tariff will come for review in 2028. So that's like around one point five years from now. One point five, two years from now. So just wanted to know, out of INR 3,500 crores, what would be the gross log addition that you would like expect by that time given that INR 400 crores, 500 crores of depreciation is also there? And then how you'd like what is your assessment in terms of capacity? What it is currently? And how it will go up?

25:58 And based on all these numbers, what kind of like rough cut tariff hike do you expect once it comes for you in 2028? So to answer the first part, I think we should be able to complete at least, I would say, approximately INR 3,000 crore by March '28 and some part of the balance may spill into maybe April, May, June 28 or so. So that is the plan and we believe that's a fairly achievable plan. What was the second part? Capacity now and what would be the capacity by then?

26:47 So current capacity is around 36.5 and we expect that to go up by around eight or nine MMS. Okay. And based on these parameters, what is your rough cut assessment for the tariff by that time? That is something we would leave to the regulator. We would not like to speculate on that part. We would rather execute and let the regulator decide. Fair enough. Second question, just a small question on this GIGL, GITL. So if I see the Y o Y growth, my revenue is up around 13%, 18% despite volumes going up by almost like 20%, 100%. So I think these are like bid out pipelines.

27:43 So just wondering if there is some take or pay adjustments here also or if otherwise the revenue should move exactly in tandem with the volumes. So just wanted some clarity on that. Yes. So there might be some mismatch, primarily on account of ship or pay revenues versus the previous quarter. The next question is from the line of Shreyanj Mehta from Shri Capital. Please go ahead, sir. Yes. Good evening, Mr. Karnik and Mr. Agarwal. Thanks for this call. This being our first investor call as a new entity, I'd like to ask a couple of questions on the basic business model as well. But before that, line with the earlier question about the previous PNGRB order of 2024, I believe that, you know, we had challenged this order at appropriate levels. So if you can give some understanding about what is the status of that challenge and when do we expect any outcome out of it. And secondly, in that order, nearly at every place where our claim has been denied, it is mentioned that it will be trued up in the next tariff revision.

29:02 How does this truing up mechanism work? If you can just walk us through that and will it be kind of will it give us if there is any tariff revision decided later on? Will it come with the previous effect? And has it also happened in our earlier tariff revision where our claims were denied? So if you can just walk us through this, that's my first question. So what we understand is the matter is still at the PNGRV affiliate revenue level and they are yet to revert on any sort of order on our appeals. That is one. Two is anything which happens will certainly we will certainly get a credit for the prospective for the previous years, but the effect would be on a prospective basis only.

30:01 And I don't think with respect to any of our previous matters we have received any adjudication so far from PNGRB. Oh, so it's not as if our earlier things were denied, but we don't have adjudication about that presidency even till this date. Yes. Yes. Alright. Fine. And when you say true up, if you can just explain to the investors, how exactly does it work? So so typically, that would mean, say, say, we were entitled to a tariff of say a rupee and PNGRB had allowed us 50 paisa. So the balance 50 paisa we can recover on a prospective basis, basis whatever revenues we have earned in the previous years from which this revised tariff was supposed to be applicable. But we cannot go back and apply tariff on the previous supplies.

31:06 That credit would be available on our subsequent transportation, not the previous ones. That kind of complicates the whole thing that you had some customers earlier with whom you had maybe one year, three years, five years contracts who have availed your services, and then the tariff gets revised, and you will be charging the new set of customers thereafter. How... I mean, how does it work? So so see, it's a combination of several factors and with the unique unified tariff policy in place, I don't think it matters much. Eventually, somebody has to pay Somebody is paying for somebody else in the unified tariff regime. So it won't matter much.

31:54 All right. My second question is about the subsidiaries, both the companies presently making losses. And if you can just because it is also fixed tariff regime, which we have over there. So as compared to our regulated tariff in the parent company, how different is the business of subsidiary companies? Where exactly are we in terms of progressing and reaching some reasonable volume and revenue growth? What do we expect going forward? If you can give some understanding, please. Yeah. So you are right in saying that these are like fixed tariff businesses. And I think the real issue that we have been facing here is around volumes.

32:40 And if you really look at the past track record, we have been in a scenario where we have been, I would say, kind of reporting or achieving better volumes by the day. I understand the gap is too large to bridge perhaps, but then, yes, we are... I won't say we are there tomorrow. It may take some time, but, yes, we are on course and we all know these are like large infrastructure projects and it takes time for industries to come up large customers to come up along the way. So, I think which is a bit long run process. We are on course, we need to maybe give some more time before we start reaping rewards of our investment.

33:30 So if I may ask, in both these subsidiaries, out of the capacity which we have for transmission, what percentage of capacity is presently under contract with the customers? So we have few key customers along these lines. But I won't say these contracts would be good enough to kind of reach to a breakeven point. So we need to keep developing more customers. In terms of specific contracts, I would need to maybe look into further details, greater details and then come back. Sure, We'll appreciate. And lastly, about dividend policy, what do you see there? Would you please rejoin the queue for follow-up questions?

34:22 Sure. I understand. Thank you. Thank you. Participants, please make sure that you limit your questions to two per participant. The next question is from the line of Mr. Malik Patel from Equirious Securities. Please go ahead, sir. Hi. Thanks for the opportunity. On this contracted volume, and I just want to some more clarity. Typically, your transmission service agreement with customers, let's say you have an agreement for five ms of volume for a period of one year and you have certain SLA, right, which is that 80% is the take or pay revenue.

35:07 Now let's assume that in this case of five MMcMD of contract volume, you will have four MMcMDs of Tickertape. However, if customer actually transmit only three MMcMD, the... In earlier case, you would have reported only three as in our volume, which was a physical transmission volume. Now the number which you are reporting is four, which is where you are... Where we'll get the revenue because of the take or pay is that, or you are reporting five, which is a contracted volume? So we would report four and not five. Okay. So this 45 is four, right? Which is where you are generating the revenue? Yes.

35:52 Okay. Got it. So that's first. Second is on a CapEx, these ROU, ROW are with us for a large part of the pipeline and we are on track to complete our entire CapEx by March 28? And do you see any delay in that? That's what the objective of the question. Yes. So I get your question. So on CapEx, I would say the major project which gives stress to March 28 is Anjar Palankur. Rest all we target to complete well before that. And even on Anjar Palanpur, would say we have almost all approvals in place.

36:40 And we are in a good place in terms of that particular project. Got it. And you will go for a refi and division of tariff only after completion of Anjar Paragpur because that's almost 60%, 70% of your 3,500 crore kind of CapEx. Is that understanding correct? So see, you know that one of our appeals is still pending at PNGRB. And typically, we should go back with a revision request only after five years unless we have good reasons to go prior to that. Since we already have a request pending at PNGRB, it may not make sense to go before twenty eight.

37:31 So you will go after completion of this Anjar Palampur pipeline because then and then only the grader will consider that pipeline as a part of your CapEx as per the new PNG Yes, or the yes. We can presume so. Okay. Thank you and wish you a happy Diwali. Thank you and wish you a happy Diwali as well. The next question is from the line of Mr. Madhur Radhi from Counter Cyclical Investments. Sir, thank you for the opportunity. Sir, I just want one clarification. Sir, what is the capacity of our two subsidiaries? Hello? Management line? We cannot hear you.

38:21 So so between the two of them, the capacity stands at approximately 44 to 45 MMScMD. Got it. Sir, that was my mind. Thank you so much and all the best. Thank you. The next question is from the line of Mr. Ajay Rajsin from Mihir Shah and Company. Please go ahead. Good evening to the management. So I have a few questions. Hello? Yep. Yes, sir. Please go ahead. So from what I understand, the commissioning of the 3,500 crore CapEx for the 700 kilometer pipeline, so this will be all back ended. So the revenues from the same will start accruing from financial year '29 onwards.

39:15 And with... Again, for... Just an additional question to this, do we see any issue of availability of gas for this? So it not happen like what maybe the pipelines are ready and we do not have availability of gas for the same. Well, I don't think there is any issue about availability of gas because gas is available. I mean, although we as GSPL did, we don't deal with gas as a commodity. So we only transport gas. So we are not the owners of gas. But what we hear from the market is that there are a lot of projects and liquefaction projects, which are supposed to come online in 2930, specifically from U. S. As well as the new Qatari projects.

40:06 Although there some of the Qatari projects may get delayed because of the current situation. There are projects elsewhere as well which are in like for example Canada and Argentina which would be ready to start supplying by '29... '28, 2930 timeframe. So I don't think availability of gas would be an issue. Okay. My second question is on GIGL. So one of the questions one participant asked us, so I got a part answer to it. But I would just like to ask you this that in light of the HRR refinery starting and also the final pipeline connectivity to HMEL also done. So do we see an impact on the volumes?

40:53 And at some point of time, what is your vision for GIGL? Do you think it will... At any point of time, right now, I believe it's in a very low double digit utilization. If at some point, do we see making a 12% ROE or maybe 12 to 15% ROE on GAGL at some point of time? So I would just like to have your vision on the single. Our subsidiaries have taken up a lot of our capital, and we also have to support it from time to time. So so that was my concern on GIGL. It could it could be good if you could address it. Yes. So as you rightly said, new projects have come into being, and these are being scaled up gradually.

41:40 And as they scale up, the demand for gas will also go up. And that's where I think we will also get benefited. Simultaneously, I would say along the entire network, a lot of CVDs are also coming up and that is also going to propel volumes. So whilst I can understand we don't see good work at this point in time, these are certainly assets which are going to provide better returns over a period of time. Okay.

42:26 And just a small question. The dividend policy, is it the same or what you have been following so far? I mean, based on last year? At about Yeah. We we expect to to be at the same place in terms of dividend payout, whilst it remains a prerogative of the board. And certainly we do evaluate our cash situations, the capital requirements and all of that stuff. However, we believe we will be in a position to retain those levels. Would the management at some point of time consider a buyback because the kind of network that you are having, $7,001.50 crore and the current market cap being half of it and cash if you are generating $506,100 crore every year and already the CapEx that you have, you have enough cash for the same. So would you be looking at a buyback because that would eventually occur well for the shareholders from a wealth creation perspective as your projects, they start progressive commissioning.

43:35 So a good idea. The only thing is we are we are more focused right now on executing what we have on hand so that we can give superior returns in the course of next two or three years. I can understand there may not be much to see on an immediate basis, But certainly, over a medium term period, we believe we would be in a position to offer superior returns. So not that we discount the idea totally, but again, not something which is there at the top of our agenda. And I would just request the management to maybe consider a buyback at some point of time. The next question is from the line of Mr. Kunal Tokus from Fair Value Capital. Please go ahead.

44:32 Hello, ma'am. Sir. Okay. Thank you, and good evening. My first question is on GIGL, your subsidiary. How much is yet to be done for that entity to connect to gas sources or customers? And if you can please talk specifics there in terms of how many customers you have, which are connected and how many customers are going to be connected and what that CapEx will be on per lines? And when do you get to... When do you source your gas from? Is it the can field or do you source it from GPL network in Gujarat? Yeah. So on the first part, I think in terms of pending CapEx, would say GIGL is almost done with all that was to be done.

45:28 They have a small, I would say, outstanding CapEx of around INR $101,110 odd crores, which is under execution. We do not see any major CapEx requirements beyond this in a near term basis, on a near term basis. In terms of specific customers, I will need to certainly get into details and share the same at a later stage. Okay. But can you at least tell me if the spending? Are you committed to all major customers that you have on that group? Yes. Yes. So so this CapEx, which is currently on, would be revenue accretive day one.

46:20 Okay. Okay. So just to confirm, there is... After this 110 karat CapEx, there will be no insufficiency from an infrastructure point of view. The only thing that will remain is when the customers start ramping up volumes using gas from your network. Is that correct? Absolutely. Absolutely. Okay. And the second question is on GIT. You are on the subsidiary. It already had... It originally had a much larger pipeline plan, but because of problems with sourcing gas from the KG Basin, you had to shorten materially. Is that subsidiary incurring penalties from the PNG in terms of performance bonds because of not meeting it requirement to...

47:17 And what is the status of that subsidiary right now? That subsidiary joint venture? So GITL see is profitable on a stand alone basis. You are correct in saying that we have not made any major investments given the fact that there are sourcing issues given the KG Basin disaster. And in a way we have tried to protect capital there. We continue to evaluate the situation, not that we are not willing to invest, but yes, we do not wish to get into a scenario where we invest and we do not find customers on way.

48:03 So we continue to remain engaged with GNGRB as well on the matter. And they are also, I would say, better updated than any one of us in terms of the current state of sourcing as well as customer base. Okay. Yes. But are you incurring any penalties from PMJR for not making your investment? None none none thus far. Okay. Thank you very much. Have a good day. Thank you. The next question is from the line of Mr. Kronal Shah from Enam Holdings. Please go ahead. Hi. Thank you for the opportunity.

48:50 So my first question is on this CapEx that we are undertaking of INR 7,500 crores. So Andhra Palantir, Jammnagar, Dwarka, what are the demand pockets we are seeing to fill the capacity that we are adding in these regions? So Anjar, Panhandkur is basically we are connecting Jamnagar where there will be a source. I mean there are there is a gas field offshore Dwarka operated by SunFetto and there are entities also which are together negotiating common infrastructure.

49:42 They expect to produce gas from this field, which will be transported through the proposed Jamnagar Dwarka pipeline. So that is The other one is Anjar Panangkur. We intend to use Mundra Terminal to transport additional gas in GIGL and GSPL. So, Andhar Palanpur would basically be benefiting from additional volumes coming from Gundar LNG, Jammadar. Okay. Got it. Got it. Can you just highlight the volumes for this 10 petrol field? What is the volume expected there? Minimum two and a half million, and it could... Depending on further success, it can go up.

50:29 Okay. Got it. Great. And my second question is on the receivables... Sorry to interrupt, sir. Can you please rejoin the queue? Yes. Okay. Thank you so much. Participants, to ensure that the management is able to address your questions, please limit to one per one question per participant. The next question is from the line of Mr. Priyam from MK Capital. So I wanted to understand, are there any penalties levied for missing volume projections in GIGL? No. As of now, we haven't faced any penalties. So if there's... If you're not able to fulfill certain volume, there's no penalties for that because the volume gap is still large right now. No. So so so, see, we have been fulfilling all the customer requirements, whichever is on way.

51:26 So so there is no customer that is not being served. Okay. Got it. And when you expect to reach profitability in GIGL? So we we have been making incremental progress. I think as situation improves, as new industries come along the way, it may be I would say maybe a period of another couple of years or so before we actually reach a breakeven point for GIGL. Got it. Okay. And if I can I'm sorry to interrupt, ma'am. Can you please rejoin the queue?

52:13 Thank you so much. Participants, please limit your questions to one per participant. The next question is from the line of Mr. Devraj from Forensic Investing. Please go ahead, sir. Namaste, sir. Sir, I want to know about the regular liquidity. Right? Whatever CapEx we have done. So is it covered by the regular liquidity? And, sir, the second question on new competition, which PNGRV can permit new pipelines? I think so whilst I am not absolutely clear on the cushion, I would say PNGRV is right now clearing network on an open or shared basis only. So we do not see any major issue there.

53:08 So I really couldn't understand your concerns around that. Sir, whatever we have CapEx, right, which we will go to the PNG, right, so it is covered under regular liquidity, right? Because there are some issues, right? Farmers don't give the land and rent increases or for acre that increases. So everything is this risk covered in the regular equity? So a couple of things. One is all the projects that we are executing are pre approved through PNGRV. So we do not need to go for any subsequent approvals, one. Two, as I said, for almost all of the projects, we are right now on ground. We have most of the approvals in place. Very difficult when you implement projects at such a huge scale, you just cannot simply stand up and say, oh, everything is hunky dory.

54:00 So we continue to face and we will see to it that we take new steps to mitigate these challenges. And whatever costs we incur gets capitalized and is a pass through cost. Okay. The line for the current participant has dropped. So we'll take the next question from Mr. Dhruvish Pujara from Group. Please go ahead. Hi, sir. Thanks for the opportunity. So I have two questions. First, on the different policy you said, it is similar to what it has been. So I just wanted to double check that. So as per Gujarat government PSU guidelines, it is 30% of PAT or 5% of network, whichever is higher. So that number translates to INR $3.50 crore.

54:53 So are we saying we'll be paying INR $3.50 crore dividend this year? That's the first question. So I think I clarified when I responded to that query that it's a prerogative of the Board and Board always considers several also always takes into account several considerations like the planned CapEx and any other future requirements. So we would say the current announcements or disbursement were basis board approvals. And all that I said was we expect to maintain disbursements at these levels irrespective of our current CapEx projections. Okay.

55:41 Got it. Second question I request you to rejoin the queue. The next question is from the line of Mr. Manish Peria from Saswat Riddhi LLP. Yes. So yes, that is newly listed. So some of my question might be quite basic. So please feel my ignorance. So if I look at the net effect, I mean, the regulated effect on which we get the 12% return. So this is something like INR 3,200 I mean. And just I wanted to check that with the tariff that we have with the volumes that we are doing and with the life that is there, So if you discounted by the cost of equity 11%, the 3,200 still stands, I mean, so I just want to confirm that.

56:35 Yes, that's true. The question I'm asking this is because you are doing the volume something that you've shown in the presentation, something like more than 40 MMFEV and in the tariff that has come out in 2024 by the regulator. So they say something like 31.5% or something like volume. So you are doing quite high volume and you see you are going to generate this year the net profit excluding other income of INR 400 crores. So that's equivalent to 12%. So you're doing more volume, but still getting 12% return. But the regulator was telling us much lower volumes. The type was designed on much lower volume. So is there a risk? So that's why I wanted to check, I mean, why this is the discrepancy here. Yes. So see, there are three different networks that we are operating on. One is a high pressure network, another is a low pressure network and a HAPI network.

57:29 So high pressure network is currently at around 36. That is what we reported for Q2. And that is based against the 31.4 or 31.5 odd figure, which PNGR we took during the last revision. So not that we are substantially out, one. Two is anything beyond over and above the threshold that we actually execute, we get a benefit for the 50% additional volume that we bring in and that benefit gets compensated, we actually get credit for that benefit if we utilize it towards capital purposes. So I would say it's kind of a win win situation if we are actually executing beyond 75%.

58:22 Okay, understood. Thanks a lot. Just to add maybe, like you said about this dividend, I still not understood. So the other participant also asked INR 7,000 crore network, so 5%, I mean, so it can be quite high, right INR $3.50 crore. So you mean to say you will pay INR 5 crore dividend that you last year or it can also go up, I mean if the things improves to 5% of the net See, it is difficult to declare a dividend for next year right now by me. We will have to leave But it to the then, yes, certainly, what we believe is that we would try to make sure that the shareholders are rewarded at least at the same rate. That is the intent.

59:10 If we cannot improve upon, we would try and make sure that we maintain it at the current rates. But no hard feelings, we cannot guarantee the numbers. Understood. Thanks a lot. Thank you. The next question is from the line of Mr. Sameer Shah from Vadodra Partners. Please go ahead. Hello. Am I audible? Yes, sir. Yes. Yes. So do I understand that your other income gets translated into capital work in progress your investment gets translated into capital work in progress, we should be seeing over the next two, three years a drop impact something? Yes. So as we use our funds, the cash balances that we have towards capital expenditure, so definitely the interest income from deposits which are placed with the banks would come down and maybe reach a zero level.

1:00:13 So to that extent, the PAT might get impacted. The next question is from the line of Sriram, an individual investor. Please go ahead. Yeah. Hi. Can you hear me? Yes, sir. Yes. Yeah. Thank you for the opportunity. I have just one question on your capital allocation philosophy because this is something that you'll be encountering multiple times over. Today, have 2,500 crores of cash. And ideally, like, management is there to increase shareholder value. Now this 2,500 of cash, you can put it in investments, or you can do a buyback because it is at 50% of this thing. And surely and definitely, the buyback is more value accretive to shareholders.

1:01:05 But instead, you'll go and make an investment into these pipelines, which have a IRR cap of 12%. Now in case there is a failed pipeline or something like the KG Basin happens, we don't get any cover on that. And as long as this cash is sitting in the company waiting to be invested, we lose on some IRR. So the total IRR of the company or the capital invested by the company will always, by design, be below 12%. In such a scenario, how is investing in new pipelines creating shareholder value? If the if the if if the intent of the company is that I would place the value... I would place the interest of the government ahead of shareholder value, so be it. But please state it is what I'm asking. Is shareholder value more important to the company, or is the government interest and national interest more important to you? I just wanted clarity on that, sir. That is my first question.

1:01:58 So see, I think if you really go through what we have done so far, we have really balanced our act. Whilst we have taken care of the national infrastructure requirements, we have also tried to reward our shareholders well. I understand your concern in terms of the fact that if we go for a buyback that may actually bring in better returns for shareholders. But if you really look at it, the current cash balances are around INR 1,800 crores and it is just a matter of time, perhaps maybe in the third call from now, these balances may not be there and we would be actually looking for funds.

1:02:46 We have a robust expansion plan, of course. And these plans are not, I would say, figments of imagination. These are rooted in well discussed, well discovered plans where we see a source available and supply points available. So these are all being done keeping in mind the fact that we need to generate return for shareholders. I'm sure few of our shareholders appreciated the fact that we did not go on, we did not went into investing in GITL mindlessly the moment we got to know that the source was not there.

1:03:33 So we continue with that philosophy. We will make sure that every penny that we invest, it gives its worth to shareholders and to the nation as well. And it's not that INR 3,500 crore is all that we are going to invest. So so we have a long way to go. We have high aspirations, and so so we need to keep investing. Sir, my question is that whatever you invest, it cannot be the 1,200,000 miss mister. You'll have to rejoin the queue for follow-up question. That's only my first question. Okay. Please go on. No. I'm just saying, I'll just follow on with it. Whatever is invested by the company, there is a regulatory cap of 12%. Now you put idle cash. Now you put failed projects.

1:04:25 The IRR is much below 10%. If that is the case, why is buyback not at the management listing? If if the concern is no, our share... National interest is more important than shareholder interest, so be it. Please state that is what I'm saying. No. No. So so so see, for for all of us, I'm sure the national interest would be paramount. But I think the entire question is more around, I won't say the returns that GPL is generating, it's perhaps more around investments which we made in GIGL and that's where I think the higher base counts. But fine, we all take business decisions and it may go right and it may go wrong. But all that we are saying is that we are taking very nuanced decisions, very well thought through decisions, and we are trying to create a long term shareholder value.

1:05:20 Thank you, sir. Thank you. The next question is from the line of Mr. Rishab Jain, an individual investor. Please go ahead. Hi, sir. Good evening. On the financial side, I would like to know what would be the maintenance CapEx that you will incur each year? And for the quarter two, why the other expense increased? So your question had two parts, right? One was maintenance CapEx and another? On the other expense. In the quarter two, it has increased. So what's the reason behind that? Okay. So see, the maintenance CapEx, we expect to maintain between, I would say, 60 to 100 odd crores on a year to year basis over a period of next couple of years.

1:06:10 It can be at the either end of the spectrum. Okay. So in terms of other expenses, so the key factor was that we sent a lot of gas up north and which required us to operate compressor for longer hours compared to previous quarter. And that's where we had an increase in other expense costs. So and these are like pass through costs. So we will have this all back when we go for next revisions. Okay, sir. Thank you, sir. Thank you. The next question is from the line of Mr. Nishat Shah from Aarthag Export. Please go ahead.

1:07:03 Mr. Nishat? Line for the participant has dropped. Due to time constraints, that was the last question. I now hand the conference over to the management for closing comments. Please go ahead. So I thank everyone for joining us today and for the active participation and interest that all of you have shown. We are pleased to begin this structured engagement with the entire community and remain committed to maintaining a transparent and consistent communication channel.

1:07:49 We also hope today's discussion provided some useful insights into our business and our priorities. In case there are any further questions, please feel free to reach out to our Investor Relations partner on Sendyang. We thank you once again for your interest in the company and look forward to a continued and meaningful engagement with all the stakeholders. Wish everyone happy festivities. Thank you. Thank you, sir. On behalf of that concludes this conference. Thank you for joining us, and you may now disconnect your lines.