Ladies and gentlemen, good day and welcome to the Gujarat Gas Limited's Q2 FY26 earnings conference call. As a reminder, all participants 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 the Company Secretary of Gujarat Gas, Mr. Sandeep Dave. Thank you, and over to you, Mr. Dave.
Thank you. Good day, everyone. A very warm welcome to Q2 earnings call of Gujarat Gas Limited. I am Sandeep Dave, Company Secretary and Head of Corporate Communication at Gujarat Gas. Just to give you an update, since our last earnings call on the composite scheme of arrangement, the Board of Directors have approved the scheme of arrangement on 30th August. Thereafter, we have approached the Ministry of Corporate Affairs, and the Ministry has directed a convening of meeting of shareholders of GSPC, GSPL, and Gujarat Gas. We are happy to inform that the shareholders of GSPC, GSPL, and Gujarat Gas have approved the scheme with a thumping majority. 100% of GSPC shareholders and 99.99% of GGL and GSPL shareholders have voted in favor of the scheme. After approval of the shareholders, we have filed the chairman's report and confirmation petition with MCA.
The proposed scheme will eliminate the layered structure of the GSPC group to promote business synergy and unlock value for its stakeholders. The scheme is subject to various statutory and regulatory approvals. We have received no objections from BSE, NSE, and PNGRB. The matter is under active consideration of MCA, and we are expecting approval of the scheme by December 2025. Coming to GGL, to give a brief background about GGL, GGL is the largest city-based company in India. It is operating in 27 geographical areas, spread across six states and one union territory. We have a good mix of matured and emerging CGD areas. We have developed a pipeline network of more than 43,900 km, which provides natural gas to approximately INR 23.44 lakh households, 4,429 industrial customers, and 15,780 commercial customers. We also operate 834 CNG stations, serving approximately INR 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 fuel. We have also started injecting biogas into the GGL sector. 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 planting pilot projects, which we have completed with 8% planting. We have embarked on major digitization drives across various business operations and processes. Our major contribution to the environment is by virtue of promoting the use of gas for industry customers. In Q2, we have reduced the burning of approximately 10,385 metric tons of coal per day. Further, through our CNG sales on various outlets, we have reduced the combustion of approximately 3,282 kl of petrol per day.
We have been conferred awards by our regulator, PNGRB, in two categories: PNGRB Excellence Award 2025 in the category of Safety, Integrity, and Technical Excellence in CGD for Ahmedabad GA. PNGRB Excellence Award 2025 in the category of Overall Best Performance in the CGD for RNGA. At Gujarat Gas, we have 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, create, and maintain a safe and reliable gas network in our areas of operation. With this brief background on GGL, I now request Mr. Dipen Chauhan to share business updates. Over to you, Dipen.
Thank you, Sandeep. Good afternoon, everyone. First, I'll 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 2.328 million domestic customers. GGL has added 27,000 commissioned customers in Q2 2026 and registered 34,000 customers in Q2 2026 despite the monsoon season. GGL has signed a gas sales agreement with Bathinda Military Station, which is one of the largest military bases in India, for the supply of PNG to over 11,300 residential quarters. 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 15,700 plus commissioned commercial customers. Now, let me update on the industrial segment.
In the industrial segment, sales volume was 4.34 MMSCMD for the quarter ended 30th September 2025, whereas the sales volume during the previous quarter was 4.71 MMSCMD and overall decreased by approximately 8%. The average Morbi volume during the quarter was 2.13 MMSCMD, and known Morbi volume was 2.22 MMSCMD. The Morbi volume reduced from 2.51 MMSCMD in Q1 FY 2026 to 2.13 MMSCMD in Q2 FY 2026. As stated during the last call, the Morbi volumes were expected to be lower due to the Janmashtami festival. The known Morbi volume of 2.22 MMSCMD for the quarter ended 30th September 2025 has grown from 2.20 MMSCMD during the previous quarter. That is an increase of approximately 1%. The known Morbi volume has grown by approximately 8% as compared to the same period, which was 2.05 MMSCMD in the previous financial year.
In fact, the known Morbi volume has grown from 1.92 MMSCMD during FY 2023-2024 to 2.21 MMSCMD in FY 2025-2026. That is a growth of almost 15%. The reduction in spot RLNG prices and crude prices during the quarter enabled GGL to reduce the prices in the industrial segment, which was by INR 3.25 per SCM, with effect from August 1, 2025. The reduction also enabled GGL to maintain the price differential to propane. That is natural gas premium by INR 4-5 per SCM. While the prices of alternate fuel propane have reduced in recent times, we expect the same to increase during the winter months. This may reduce the gap between natural gas and propane prices. However, in the short term, the Morbi volumes are expected to remain lower.
We continue to monitor the various aspects affecting the volumes, that is, price movements of spot RLNG and alternate fuel and consumer goods demand across all our operating areas and shall adjust to such market dynamics so as to maintain balance between margins and volumes. Finally, let me update on the CNG segment. GGL reported a strong performance in Q2 FY 2026, driven by robust growth in CNG volumes and expanding infrastructure. CNG sales rose by 13% year-over-year, with Gujarat recording an 11% increase and areas outside Gujarat delivering a notable 26% growth, underscoring GGL's success in Dipening its presence across all geographies. As of September 2025, the CNG vehicle base across GGL's network reached approximately INR 16.22 lakh compared to INR 14.12 lakh a year earlier, reflecting a solid 15% growth.
CNG continues to offer a compelling economic advantage, being approximately 45% cheaper than petrol and 23% cheaper than diesel, further reinforcing its attractiveness amid volatile fuel prices. During the quarter, GGL commercialized four new CNG stations, supporting its commitment to expanding reach and improving accessibility. CNG sales volume touched a record high of 3.934 MMSCMD, highlighting sustained demand momentum. Looking ahead, GGL is well positioned to capitalize on the increasing shift towards clear energy. With ongoing infrastructure development, a growing CNG vehicle base, and strong customer adoption, the company remains confident in maintaining its growth trajectory and strengthening its leadership in the CNG segment. Finally, I'm happy to update that during Q2 of FY 2026, we marked significant milestones on our company's digital transformation journey.
With a sharp focus on innovation and operational excellence as we go for merger, we have planned to strategically expand our ERP ecosystem to incorporate additional key business functions and achieve the benefit of seamless integration across verticals. Along with this, the planned technology transformation of ERP will help to leverage advancements in AI-powered analytics and enhance decision-making and risk management capabilities. On the operations front, we have drawn a blueprint for implementing a robust and secure SCADA system to enable centralized monitoring and control across all geographies. This scalable, agile infrastructure is designed to support our evolving business dynamics and ensure responsiveness in a rapidly shifting global environment. Furthermore, we have identified automation opportunities across multiple business processes that currently fall outside the scope of our ERP system. These initiatives are designed to strategically address operational challenges and enhance overall process efficiency through seamless integration and robust monitoring mechanisms.
Thank you very much from my side. Now, I would like to request our CFO, Mr. Rajesh Sivadasan, to take over. Rajesh.
Thanks, Dipen. Good evening, ladies and gentlemen. Myself, Rajesh Sivadasan, CFO and Head of Investor Relations at Gujarat Gas. On behalf of the entire team of Gujarat Gas, I extend warm wishes for our shareholders and our customers. I welcome you to the earnings call for the second quarter and the first half of the financial year 2025-2026. Thank you for joining us today. I trust you had gone through our financial results of the quarter ended 30th September, along with the press release and the investor presentations, which are available on our website and the stock exchanges. During the quarter, the company has added close to 42,400 new domestic PNG connections. Our pipeline infrastructure now spans approximately 43,900 km of PE and steel networks, which continues to be the key driver for our growth.
In the first half of the financial year, we have invested approximately INR 282 crore in the gas infrastructure. For the full financial year, we plan to incur a capital expenditure of approximately INR 800 crore. The revenue from the operations stood at close to, sorry, stood at INR 3,979 crore compared to INR 3,949 crore in the corresponding quarter of the previous year. The EBITDA was INR 520 crore against INR 553 crore in Q2 of the previous year. The profit after tax amounted to INR 281 crore compared to INR 307 crore in the same period of the last year. The EBITDA margin per SCM was INR 6.54 versus INR 6.86 in the corresponding quarter of the previous year. For the financial year 2025-2026, we estimate an EBITDA margin in the range of INR 4.5-5.5 per SCM. During the second quarter, we received 100% allocation for the domestic segment.
However, there was a 64% shortfall in the CNG segment, resulting in an overall shortfall of 51% in the priority segment. The APM shortfall was mitigated through allocations from the New Well Gas and HVAC gas, and we also sourced gas from the spot and long-term contracts. The allocation of the New Well Gas for the Q2 for the financial year 2025-2026 was approximately 0.44 MMSCMD, down from 0.54 MMSCMD in the Q1. Gujarat Gas continues to maintain a strong credit profile with a AAA rating from CRISIL, Care Ratings, and India Ratings & Research. As requested by our investors, we have uploaded the financials of GSPC for the Q1 on our GSPC website. You can go through the same. Now, with this, we open the floor for the Q&A session.
Thank you very much. We will now begin the Q&A 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 will wait for a moment while the question queue assembles. The first question is from the line of Probal Sen from ICICI Securities. Please go ahead.
Thank you for the opportunity. Good afternoon, sir. The first question was more a small clarification. What was the propane to gas differential that was mentioned? I could not catch the number exactly in terms of rupees per SCM in Q2, and currently, if you can give both the numbers.
It's in the range of INR 4-INR 6 per SCM.
That is in terms of propane being at a discount to gas. Is that correct, sir? Hello?
Yes, please.
Yeah, I was saying that is the discount that propane has against gas at this point of time.
Yes.
Right.
Yes.
Sir, that being the case, you already did mention that Morbi is going to remain muted in the near term. Can there be at least some marginal improvement after the festival season in Q3 and Q4 that we can look at in terms of the absolute numbers for Morbi?
As the winter months will start, I think we will face a good competition from propane pricing.
Okay. The other question was, sir, if I look at the ex-Morbi volume, I think that has remained in a relatively narrow range of between 2.1-2.2 MMSCMD. Now, if I look at the kind of new areas that we have brought on stream, and that is definitely visible in the kind of momentum we have in the CNG and domestic segment. Sir, just wanted to understand the industrial and commercial potential from all of the new areas that we have brought on stream over the last three, four years. Can we expect any meaningful delta to come in this portion of the industrial volumes over the next maybe 12-18 months or even longer?
Yes, we are expecting because if you look at some of the GAs where we are reaching by our steel pipeline, if I have to give the name is if I name a few GAs like Ahmedabad Rural, DNH, and some portion of Thane also, where we are planning to reach two industrial pockets with our steel pipeline, we are expecting a good amount of volume increase, to be precise, industrial volume increase in these GAs.
Sir, any timeline you would want to put on that in terms of how we should sort of build that number?
I think we are expecting in the range of 200,000-300,000 SCMD in these areas in at least 18 months.
Right. In terms of the announcement that was made in the last quarter that you are also now looking at entry into the propane sale and distribution market, any color you would like to throw, sir, in terms of how that is progressing? Any updates that can be shared?
Hello. Good afternoon. This is Chintan Shah from the sourcing team.
Hi.
Yeah, hi. Thanks for asking this question. Actually, we have been working in this direction quite a lot, and we are currently in discussions with capacity providers for the port, Pipavav and Kandla. We are in very advanced discussions with these service providers. In addition to that, we have also initiated discussions with the fleet providers for arranging the last-mile logistics. We are also in advanced discussions with international propane suppliers. We are discussing term sheet and figuring out what suits are basically a requirement. We are discussing spot as well as term kind of proposals with them. As of now, we are under discussion, and probably in the next few months, we'll get some good breakthrough in this.
Understood, sir. One last question, if I may, just a housekeeping question. The CAPEX guidance for FY 2026 was shared at about INR 800 crore. Can you kindly share a similar guidance for FY 2027, if possible?
I think FY 2027 would be an year wherein the new company, the new form would be there. If you only look at PNG and PNG, yeah, the guidance would be along the same. INR 800 crore-INR 1,000 crore will be investments in this area. For the rest things, we will be coming back to you.
Understood. Understandable. Thank you so much and all the best.
Moderator, next question, please.
Thank you. Thank you very much. The next question is from the line of Achal Shah from Ambit Capital. Please go ahead.
Sir, am I audible?
Yes, please.
Sir, just wanted to know one data point. If you can share the CNG realization per kg or per SCM from FY 2020 to FY 2025, that would be helpful, sir.
You mean the sales price?
No, sir. CNG realization, average CNG realization per kg or per SCM?
Okay. I think margins we are disclosing on a company level. We are not segmenting the margins and disclosing.
Got it. Okay, sir. That's it.
Thank you very much. The next question is from the line of Amit Muraka from Axis Capital. Please go ahead.
Yeah, hi. Good afternoon. Just wanted to know what was the Morbi volume in Q2 and what is the run rate currently?
Morbi volume is around 2 MMSCMD.
Sorry, 2?
Yeah.
Okay. And run rate?
1.7-1.8. That's what is the rate.
Got it. The PNG versus propane gap of INR 4-6 that you mentioned was for Q2 or at the current gap that you mentioned?
That was for Q2, please.
Currently, it would be how much?
It will be less than, I think, Q2, which will increase in coming months, but in the range of INR 5- INR 6.
Sure. Also, lastly, what is now the timeline for completion of the entire scheme? Earlier, I think you had mentioned October, if I'm not wrong.
We did mention that we'll do it in last quarter. That's what the response was from management in the last summit call. We maintain that we'll be completing it by we expect that MCA hearing will get over and we'll get a final order from MCA by December 2025.
Right. The entire process in terms of, let's say, relisting of GSPL, that will take how much more after that?
Should typically take two to three months kind of timeframe once we have got effective date on place.
Got it. Got it. That's all from me. Thank you.
Thank you very much. The next question is from the line of Maulik Patel from Equirus . Please go ahead.
Yeah, hi. Thanks for the opportunity. Just two questions. One, what kind of volume visibility do you expect in a non-market, particularly on the South Gujarat side and the newer geographies?
We are expecting at least 2 MMSCMD in Morbi market and slightly higher than that in non-Morbi markets.
This is what volume you are doing currently, right? I'm saying that within a year or two, as your network expands in the newer geographies on the [Surat, peri, Chankleshwar]?
Yes.
You are looking at this as an additional volume or existing volume?
No, no, no. That I think I've answered for the next quarter or I think this year. I think we are planning to add at least 500,000 across the market.
Okay. So across both non-Morbi and the newer GA, you're looking at into around 0.5 MMSCMD volume next year, possibly?
Yes. Yes.
Got it. This group has done one LNG tie-up with Qatar that was a couple of weeks back. Can you just share the rationale and thought process? Already, the group has done one more contract sometime in the beginning of this calendar year for 0.4 million ton. What is the rationale for that? Today, we are doing around 12 MMSCMD or 11 MMSCMD volume on the trading side. Why can this number go up after this addition of the new supply contract?
Hello, this is Chintan. I'm Chintan Shah from the sourcing team. Thank you for asking this question, Aulivai. As you are rightly aware, we have done a recent contract with Qatar Energy. As the press release says, the volumes are up to 1 MTPA, and the contract volumes begin in 2026, and the term for the contract is for 17 years. The most important thing we need to take note of here is this is a long-term contract, and the volumes in 2026, when the market conditions are tight, will be at long-term prices. As this volume kicks in, it will help the group to cater to their customers at a more competitive pricing proposals, and it will bring in more, what do you say, help in better realizations of margins. The second question was regarding the 0.4 MTPA that we have tied up with another supplier.
As you are aware, it is on Henry Hub Index. At that point in time, the demand in the domestic market was for that kind of a product. GSPC brought in that product, and they have sold a large amount of that volume in the domestic market. Those volumes will begin in 2026-2027 with the downstream customers. That will again help us in building the portfolio for the group.
Got it. So will this highly increase the overall trading volume, which has been in the range of around 10-12 MMSCMD over the last couple of quarters? Once it's incremental, I think it should expand your KT, right, overall volume?
Yes. Bringing in more competitively priced LNG volumes will help us expand our KT. Currently, the problem is with the prices of propane and the LNG prices, which are actually at 17%-18% currently, and propane is at around 12% linkage of Brent. Once this scenario changes, probably we expect that some improvement in this scenario from April 2026, so first quarter of 2026-2027. Then probably we can see more volumes from Morbi coming in portfolio again.
Got it. Got it. Thanks, Shintan. Thanks, Dipen. Thank you.
Thank you very much. The next question is from the line of Vikash Jain from CLSA. Please go ahead.
Yeah, hi. Thanks for taking my questions. Just wanted to check, when we are doing our basic analysis of the propane business, do we get a sense that this business could, over the last few quarters or so, have seen margins, players making margins around INR 10-11 per SCM or so, or it's much lesser than that in terms of gross margins that I'm talking about? Is that kind of a margin expectation in the ballpark, or it's far too optimistic?
I think the number is too optimistic. We don't see this kind of numbers to be realized in that particular segment. It would be much lower.
Sir, just wanted to understand if we ourselves will offer a more expensive product as well as a cheaper product, then what will be the incentive of the customer to buy the expensive product? They would obviously want—are we basically kind of pushing for a quicker move away from natural gas into propane for our customers in Morbi?
Basically, for the next two years, there is a challenge. Unless and until we see the wave of LNG from new sources coming into the market, there will be a challenge. To address that particular challenge, probably we have strategically taken this decision to enter into the propane business. Doing this particular business during the first two years will help us bring in our customers in our portfolio. They will remain with us. In addition to that, we are also working on a strategy wherein we can bring in more competitively priced LNG, which would be able to compete with propane prices across the year. That way, in the long term, we can offer a product where customers will remain on gas with us.
Okay. So say, assuming that in about a couple of quarters' time, all the required tie-ups are in place and we start doing propane, is it fair to assume that we expect a large part of these 2 MMSCMD customers who are buying natural gas to shift to propane, even although still staying our customers? Would you say that maybe you can garner even more than 2 MMSCMD, the ones whom you would have lost, to propane as becoming your customer? It might be dilutive to margins, but it will be offset by higher volumes.
Yes. The idea is not to market propane to our existing customers. It's to bring in the customers that we have lost with propane.
Okay. Okay. Yeah, I think other than that, in terms of margins, we've had a very strong Q1. Should we expect that margins sustain in this 5.5-6 kind of a range, or any guidance on margins for this coming quarter and maybe in the medium term that we are targeting?
I think we are already given the guidance because we are sticking to the old guidance of 4.5-5.5.
Okay. You're sticking to that guidance. Okay.
Yeah.
Thank you so much. Thanks a lot.
Thank you.
Thank you very much. A reminder for participants to press star and one in order to ask a question. The next question is from the line of Nitin Tiwar from Philip Capital India. Please go ahead.
Good evening, sir. Thanks for taking my question. Sir, can you also provide a guidance on volume, a very specific guidance for FY 2026 as well as 2027, like you have wanted for the margins?
Yeah. I think if you look at a portfolio, a portfolio is dominated by the industrial volumes. Basically, you can see a 13% rate growth and close to 10%-7% rate growth in the domestic and other segments, but only challenges with respect to the industrial segment, which is there. Practically, my 50% of the volumes are basically fluctuating because of the prices of propane and natural gas. If the propane, we are competitive to propane in the long term, then basically, we will be looking at a volume of more than 10 MMSCMD. If the prices are propane as competitive, then maybe a 9 or 10 MMSCMD, around that range will be moving. Considering that we will be growing in the CNG, we will be growing in the CNG and the domestic segments.
Sir, we have already done, I think, about 8.5 for the first half in this year, right? I mean, moving into the second half, given the situation remains as it is, would it be reasonable to say that we'll be sub-9 in FY 2026 and maybe just anywhere between 9-10 for FY 2027? Would that be a right assessment?
Yes. Looking at the present conditions, if nothing changes, yes, that's right. If prices or things change, then it will change.
Okay, sir. My second question was on the consumption behavior in Morbi. As you mentioned, our current run rate is around 1.7-1.8. What can be taken as a baseline volume below which we will not go down? I mean, is this 1.7-1.8 a baseline volume? How do consumers in Morbi typically decide between, say, propane and natural gas? I am just trying to assess the baseline consumption that is not going to change for us no matter what.
I think you are right. 1.7, 1.8 is our baseline volume in Morbi.
Okay. So this much gas they are going to consume irrespective of wherever the price differential or premium or discount could be?
Yes. You are right.
Okay. Sir, what actually is the motivation behind having this mix on the part of consumers? I mean, I suppose a consumer would then be taking both propane and natural gas in a certain mix or a certain percentage. How do they, I mean, go about this decision if you can throw some light on that?
There are some high-quality manufacturers in Morbi, and historically, and as per the two remain in the competition, they prefer natural gas compared to propane because of operation heat and quality management.
Okay. So natural gas is a more consistent heating source when it comes to quality. That's what you're saying?
Yes. Yes.
Okay. Thank you, sir. Thank you. That's all from my end.
Thank you very much. The next question is from the line of Sabri Hazarika from Emkay . Please go ahead.
Yeah. So first clarification, you mentioned that Q2 Morbi volumes was around 2 or it was around 2.2?
Around 2.
Around 2 MMSCMD. Okay. And how much was the APM shortfall overall for the priority sector? It was around 55% was the shortfall. Is that right?
Yeah. The CNG shortfall was 64%.
64% CNG shortfall. Okay. And CapEx for each one was how much?
CapEx was around 2 for this quarter or for the entire half year?
Yeah, for the half year.
It was INR 282 crore.
INR 282 crores. Okay. Okay. Second question is on this. I do not know whether you have looked into it or not. There is this committee report which came a couple of days back, which was led by D.K. Saraaf. Again, they have been talking about studying allocation to CNG segment and various other measures. What is your assessment if you look into it of this report? Is there a re-look into this whole allocation of APM gas to CNG sector, or is it just a generic report?
It's a welcome recommendation for the CGD industry per se. CGD industry on its own has been asking for higher APM allocation. The industry expert committee report further endorses the requirement to give a higher allocation for a higher APM allocation for the CGD industry, particularly for the CNG and PNG segment. I mean, we are also aware at the same time we are aware of the challenges associated with the limited domestic production. While we hope and support the case for a higher allocation, I mean, one has to be realistic enough to understand that things can't move drastically from what we have currently.
Right. Okay. Fair enough. Yeah. Last question is, how much is GSPC volumes in Q2 and Q1 also?
I think Q1 numbers are there. It's close to 9.5 MMSCMD. Q2 results are yet to be submitted to the board.
Okay. Okay. Thank you so much, sir.
Thank you very much. Participants who wish to ask a question may press star and one at this time. The next question is from the line of Yogesh Patil from Dollard Capital. Please go ahead.
Thanks for taking my question, sir. Sir, could you please provide a detailed breakup of gas sourcing? How much was the APM, NWT, BG British Gas, Qatar Gas, POT? If you could provide it in MMSCMD terms, that would be really helpful.
Yeah. The APM volume was close to 2.03. New well gas was close to 0.44. The long-term contracts were 3.44, and the short-term contracts were 2.85.
Sir, these short-term contracts of 2.84 include the spot also?
Yeah. It includes the spot, the IGX also.
Okay. And this NWG has come down from 0.54 to 0.44 in Q2. That's the correct understanding?
Yeah. 0.54 to 4.44. Yes. You're right.
Yeah. And just lastly, wanted to check the Morbi PNG industrial prices nowadays, rupees per SCM, if possible.
Close to 43. Just a minute. It's 46.69.
Including of GST, correct?
No. No. It's not included.
Sorry. Not the GST, VAT. VAT. Sorry.
VAT.
Inclusive of taxes, or exclusive of taxes, sir? INR 46.9?
Present price in Morbi without VAT is INR 44.
Thanks a lot, sir. We wish you best of luck.
Thank you.
Thank you very much. Participants who wish to ask a question, kindly press star and one. The next question is from the line of Akash Mehta from Kinnara HSBC Life. Please go ahead.
Yeah. Hi. Just wanted to check of this baseline 1.7-1.8 MMSCMD of Morbi volumes that you have spoken, how much of this, I mean, how many people do not have, I mean, the facility to actually use propane and only use gas? Just help us with that.
I think more than 200 customers are only on natural gas.
In terms of volume, that would be how much?
Around 1.5-1.6.
Okay. Yeah. That's helpful. Thanks a lot. Yeah. That's helpful.
Thank you very much. Participants who wish to ask a question may press star and one at this time. I repeat, participants who wish to ask a question may press star and one at this time.
Got it. If there are no further questions, no further participants, we can close the call.
Okay, sir. As there are no further questions, I would now like to hand the conference over to management.
Okay. Thank you.
The next question is from the line of Krunal Shah from ENAM. Please go ahead.
Hi. Thank you, sir, for giving me the opportunity. Just wanted your views on global gas pricing. When do you see the supply increasing and the current jump that has been there last two to three years, that normalizing?
We have seen these past two to three years have been very challenging. The supplies from the U.S. have, as you are aware, U.S. volumes have started hitting the market. Probably last month, they exported more than 145 cargoes in October. We expect that supplies from the U.S. will start very soon. In 2026, we will see in the last quarter, supplies from the new projects from Qatar also will start. Honorable Energy Minister of Qatar indicated that in various forums also. In addition to that, there is one more interesting part that we need to take consideration of, which is Russian volumes. There is Yamal LNG, which is actually going through a very volatile scenario because Europe is going to ban all Russian volumes by 2027. Those volumes will be placed somewhere in the market.
Or probably if Russia comes on the table and something gets sorted out, it will not be before Russia asks for some relaxation in international sanctions. Twenty twenty-six and twenty twenty-seven will be very interesting to see when new volumes hit the market and how these geopolitical issues play out. We anticipate that twenty twenty-seven and onwards, there should be reasonable prices in the market.
Sir, by reasonable, where do you expect spot to settle?
There are two aspects to this. Spot in terms of absolute numbers may come down to single-digits, $7, $8. That is what we understand. In the near term, even current outlook is bearish. In terms of linkage, we may not see very competitive prices. What we can say is that, yeah, spot prices will come down, but not in terms of linkage. We may see some linkage coming down a bit later.
Got it. Got it. At $7-8 spot, is industrial gas competitive versus propane?
Again, it's actually the function of brand pricing because our customer base utilizes the products which are brand derivatives. Unless and until we are able to bring in LNG at competitive prices to those alternate fuels, absolute number may make little sense.
Okay. Okay.
Yeah.
Then what is the solution for us to be more competitive versus propane, regain the loss share in terms of gas and not selling propane? Or is there a way or no?
Can you please come again with the question?
My question is, is there a way we can be very, because you said that customers are using fuel which is linked to Brent. If Brent declines, gas will also decline, but the other fuel will also decline. Is there a way we can regain our loss share that we lost to propane in Morbi?
Yeah. Yes. What we have seen historically is that propane prices behave in a seasonality. During summers, probably the linkage of propane is around 12-13%. During winters, the linkage to Brent is around 15% or so. On an average basis, if you are able to source competitively priced LNG, maybe around $12 or maybe a little bit less than $12, then it will make sense for catering to this kind of customers who switch over to propane for the entire year. Bringing in LNG at such prices will help to address this problem.
Got it. Got it. Are such deals available currently in the market? 12% and below slope?
We are into market to source more LNG, and we have been interacting with various suppliers. As I said, currently the brand outlook is also bearish. People are just, and people are also anticipating that the wave of LNG is coming. Still, suppliers are taking an approach where they want to wait, test the waters, and provide proposals. It is not like, yeah, available on the table, but we have to negotiate hard.
Got it. Got it. Great. Thank you, [Nithinbhai]. Thank you so much.
Thank you very much. The next question is from the line of Indra Kumar Gupta from PL Capital. Please go ahead.
Yeah. Thank you for the opportunity. Just a small question. I just wanted to know the APM new well gas long-term, short-term for last quarter, if you can please disclose that.
Last quarter, APM was close to INR 2.06. New well gas was 0.54. The long-term contracts were close to INR 3.39, and the short-term contracts were close to INR 3.04.
This was for Q1 FY 2026, right?
Yeah. You're right.
Okay. Thank you. Okay. That's all. Thank you.
Thank you very much. The next question is from the line of Yogesh Patil from Dollard Capital. Please go ahead.
Thanks for an opportunity again. In a hypothetical case, if the Morbi association approach you or come up with a proposal to Gujarat Gas management for the PNG industrial volume and they assure you about a major volume consumption at the PNG industrial and ask us to cut down the prices of the PNG industrial, are we in a position to cut down the PNG industrial prices and bring back the volume of PNG back? I mean, just a hypothetical question.
That depends on the number they are asking for. Everything depends on that. I think it's a hypothetical question, and it will be a hypothetical answer also for that.
Definitely, sir. I can understand. Thank you.
Yeah. There's no point in discussing this.
Yeah. Thanks a lot, sir. No worries. Thanks.
Thank you very much. Participants who wish to ask a question may press star and one at this time. As there are no further questions, I would now like to hand the conference over to management for closing comments.
We are heading towards closure of the scheme of arrangement in Q3. By December 2025, we are expecting that the effective date should occur if everything goes as per our plan. I look forward to have a meaningful interaction with all of you in Q3 and in all priority in a merged entity environment. Thank you all.
Thank you very much. On behalf of Gujarat Gas Limited, that concludes this conference. Thank you for joining us, and you may now disconnect your lines.