GAIL Q2 FY27 Earnings Call: H1 PAT More Than Doubles YoY, Record 147.55 MMSCMD Transmission Peak

Record Volumes, H1 Profit More Than Doubles YoY

• Q2 FY 2026-27 PBT of Rs.5,838 Cr and PAT of Rs.4,650 Cr — almost in line with Q1 FY 2026-27; H1 FY 2026-27 PBT Rs.11,611 Cr and PAT Rs.8,943 Cr, up more than 116% vs H1 FY 2025-26.
• Highest-ever gas transmission of 147.55 MMSCMD — achieved on 21 September 2026; management clarified this was a single-date peak, not a sustained run rate. GAIL won PNGRB Excellence awards in Gas Transporter of the Year and Health & Safety categories.
• Q2 transmission volume of 130.10 MMSCMD, up 6.3% QoQ — from 122.36 MMSCMD in Q1, in line with recovery in country gas consumption; 8-month FY 2026-27 volume at 126.25 MMSCMD.
• Q2 marketing volume of 97.23 MMSCMD (+3.6% QoQ) — 18 spot cargoes sourced in Q2 vs 8 in Q1, all through the Singapore trading arm (GGSBL); Q2 marketing margin Rs.3,148 Cr PBT vs Rs.3,353 Cr in Q1, as Henry Hub-linked returns rose on high crude while JCC-linked sourcing gains moderated.
• Trade receivables rose ~Rs.5,000 Cr in H1 FY 2026-2027 — Director (Finance) S.K. Sinha attributed this to higher gas prices vs Q1 FY 2026-2027 and confirmed there are no customer payment delays; normal trade receivables.
• Q2 capex of Rs.1,425 Cr; H1 FY 2026-27 cumulative Rs.7,600 Cr — ~Rs.12,900 Cr expected to be incurred in FY 2026-27.

Power and Fertilizer Lift Consumption; CGD Structural Driver

• Country gas consumption rose ~8.5 MMSCMD QoQ in Q2 FY 2026-2027 — power +~2 MMSCMD, fertilizer +~4.5 MMSCMD, petchem +~3-3.5 MMSCMD as C2, C3, Opal and GAIL's own petchem plant restarted after being non-operational in Q1; consumption broadly flat YoY vs Q2 FY 2025-2026.
• Power's share of gas consumption rose from 10% to 12% and fertilizer's from 32% to 33% — sequentially in Q2 FY 2026-2027 vs Q1, per S.K. Sinha, across the five consumption segments (fertilizer, power, CGD, industries, other consumers).
• CGD consumption grew from ~45 MMSCMD in FY 2025-2026 to ~54-55 MMSCMD in FY 2026-2027 — cited by management as a driver of the volume growth outlook.
• FY 2026-27 transmission guidance reiterated at ~126-127 MMSCMD — management confirmed the current ~128-130 MMSCMD run-rate is sustainable even at elevated LNG prices, since supplies are based on a mixture of gas rather than $30-32 gas.
• Volumes expected to build to ~134 MMSCMD (period unspecified) — incremental ~6-7 MMSCMD expected mostly from City Gas; ~5 MMSCMD of refinery volumes also expected to return (period unspecified), with refineries currently consuming ~5 MMSCMD below historical levels.

FY27 Guidance Raised, But Management Flags Normalization

• FY 2026-27 marketing PBT guidance updated to ~Rs.9,000-9,500 Cr — based on internal workings and gas supply planned for Q3-Q4 FY 2026-2027; Head IR Anjana Sanjiva called it a "reasonable estimation" — neither optimistic nor pessimistic — responding to an ICICI Securities analyst citing an H1 run rate of ~Rs.6,500 Cr EBITDA.
• FY 2027-2028 marketing guidance of Rs.4,500-5,000 Cr — management expects a normal situation and confirmed this next-year guidance is maintained; it is based on current-level gas marketing volumes of ~105 MMSCMD (around 100+ MMSCMD).
• Management cautioned higher margins currently being earned will not be available during Q3-Q4 FY 2026-2027 — spot prices hovering around $32 vs Henry Hub at ~$10, with customer supplies blended from spot, HH and other portfolio volumes.
• West Asia crisis ongoing for over 8 months — Middle East supply disturbed and gas prices volatile and high at ~$30-32/MMBtu; impact partly offset through portfolio flexibility and spot sourcing, with supply prioritized to customers.
• Qatar Energy continues under force majeure but has been supplying cargoes — per Anjana Sanjiva, 1 cargo received in September (Q2 FY 2026-2027) and 3 in October (Q3 FY 2026-2027) pertaining to the long-term portfolio, supplied back-to-back to fertilizer; the cargoes carry no financial implication and no one-offs, with GAIL earning normal margins.
• No LNG tanker shortage for cargo scheduling — 6 cargoes on the long-term portfolio transport LNG from the US; spot cargoes sourced on DES basis, with the shipping portfolio optimized through FOB days.

Pata at Break-Even; PDH Timeline Slips

• Q2 FY 2026-27 polymer production of 204 TMT vs 51 TMT in Q1 — segment around break-even in Q2 and expected at the same level during FY 2026-27; petchem reported a small positive EBITDA on a gas mix of 40-50% HH gas and 40-50% spot gas (supplemented by JCC/term gas), a mix management confirmed will continue.
• Pata petchem economics: sales realization ~Rs.136-137,000/MT with gas at ~$14 — at $14 gas cost and Rs.1,40,000/MT price the unit is currently achieving break-even; average petchem gas cost in Q2 FY27 was ~13.6, with HH delivered cost ~$8.8-9 and spot gas ranging $20-32.
• Management expects break-even at a Rs.90,000/MT price with $9-10 input cost in FY 2027-2028 — if petchem prices drastically come down to around Rs.90-95,000/MT in FY 2027-2028, gas price would correspondingly reduce from existing levels.
• PDH (Patachem) plant scheduled completion is 30 June 2027 — S.K. Sinha indicated the project may take an additional ~6 months (plus/minus); management stated the plant will certainly be commissioned during FY 2027-2028, responding to an analyst's observation of slight delay in overall project progress.
• LPG transmission of 1,130 TMT (+5% QoQ) with ~98% capacity realization — aided by BSPL volumes; LSC production 256 TMT (+10% QoQ); Gandhar plant restarted with 32 TMT LAC production in Q2; LAC segment PBT fell to Rs.442 Cr from Rs.772 Cr in Q1 on Rs.18,000/MT lower price realization.
• GAIL receiving ~1.9 MMSCMD of domestic gas for LPG in FY 2026-2027 — 1.12 MMSCMD APM gas and 0.7 MMSCMD NWG; management stated this is the maximum LPG production achievable based on the domestic gas profile from ONGC, with all available C3, C4+ molecules extracted; no ministry-level discussion on APM gas supply was disclosed.

Commissioning Push and Retail Separation Progress

• All pipelines to be commissioned by March FY 2026-2027 at the latest — per management: Jagdishpur-Haldia, Kochi-Kanjarkot, Bangalore-Mangalore, SAPL, Mumbai and Gurdaspur-Jammu; on the long-delayed Kochi pipeline only 3-4 km of laying remains, hopeful by March FY 2026-2027.
• Customer conversion along new pipelines estimated at 2-3 MMSCMD (period unspecified) — Mumbai-Nagpur-Jharsuguda and Srikakulam-Angul sections currently supplying the CGD sector, with a Jharsuguda customer to be connected and consuming gas in the coming years.
• PNGRB approval received for transfer of 6 GAs to GAIL Gas — for a retail-focused approach, with GAIL Gas to be listed thereafter (necessary action underway); these 6 GAs have 219 CNG stations and ~3 lakh domestic PNG connections.
• GAIL Gas IPO expected during FY 2027-2028 — per S.K. Sinha; the 6 CGD geographical areas being transferred will drive future CNG station additions and DPNG connections.
• GAIL Gas targets ~275 new CNG stations and ~3.7 lakh new DPNG connections over the next two years (FY 2027-2028 to FY 2028-2029) — GAIL Gas directly operates 16 GAs plus 9 via JVs (593 CNG stations, 8 lakh+ domestic PNG connections); quarterly profit up ~50% in Q2 FY 2026-2027, with ~7 MMSCMD marketed in H1 FY 2026-2027.
• H1 FY 2026-2027 GAIL Gas volumes of 6.79 MMSCMD total — CNG+PNG 2.39 MMSCMD (CNG 1.67, industrial PNG 0.58, commercial PNG 0.05, domestic PNG 0.09), TTZ ~1.24 MMSCMD, bulk sales 3.16 MMSCMD; no FY 2025-2026 breakup or 3-5 year volume guidance was provided.

Capex Execution, New Units and Net Zero Commitment

• FY 2026-27 completions: JET, BDPL remaining section, KKM-BPL Phase 2, Gurdaspur-Jammu and C2-C3 pipeline — Vijaypur-Bina pipeline and DUPL/DPPL capacity augmentation scheduled for FY 2027-28; JLPL LPG pipeline capacity augmentation for FY 2028-29.
• 1,250 KTA PTA plant at GMPL in advanced stage of commissioning — commercial production expected shortly (period unspecified); 500 KTA PDHPP plant scheduled for commissioning in FY 2027-28.
• Konkan LNG ambient heating system partly commissioned by March 2027, fully by September 2027 — thereafter full 5 MTPA capacity can be utilized year-round with ~80 cargoes served annually.
• 10 CBG plants registered on the Govardhan portal — 1 operational at Ranchi, 6 under construction, 3 under approval; ~Rs.100 Cr capital assistance expected for 5 under-construction CBG plants under the Govardhan scheme (period unspecified).
• GAIL remains committed to net zero by 2035 for Scope 1 and Scope 2 emissions — current portfolio of 155 MW (stated to include 180 MW wind, balance solar); 908 MW renewable capacity under construction plus 572 MW battery energy storage system, taking the portfolio to ~1 GW on completion (period unspecified).
• FY 2026-27 transmission guidance of ~126-127 MMSCMD rising to 134-135 MMSCMD in FY 2027-2028 — per management; guidance assumes continued Brent volatility and accounts for disturbed long-term supply during the year.