GSPL's outstanding receivables at around Rs 275cr

In an interview with CNBC-TV18's Anuj Singhal and Ekta Batra, Manish Sheth, CFO, Gujarat State Petronet Ltd (GSPL) shared his views on the company's financial performance and the road ahead. 

Below is the verbatim transcript of the interview on CNBC-TV18.Q: You had the worst quarterly performance in last four years this particular quarter gone by? What went wrong and do you think this is the worst that the company has seen?A: As you see, last 3-4 years volumes have been consistently going down because of shortfall in domestic gas and LNG prices and in addition, the economy not doing well so some of the customer segments are also affected. Gradually volumes had been coming down. Volumes in last couple of quarters had been in the bottom range, so hopefully volumes should not go down below this in the coming quarters.Q: One of the key worry points this quarter has been the incremental rise in receivables. Can you just tell us what your receivables were this quarter, what your debtor debt were as compared to earlier and how much of a rise do you possibly see going forward as well?A: Debtor days have risen since last couple of quarters mainly because of some ongoing issues because of the Petroleum & Natural Gas Regulatory Board (PNGRB) tariff orders which has still not been finalized right now. There have been some legal cases going on. So I think it is a matter of time. Once this thing is sorted out, this PNGRB revised tariff order and zoning the receivables will go away. As of now, we have a high receivable of roughly Rs 275 crore and the receivables had been high since the last couple of quarters.

Q: When you said that the volumes should not go down from here on, would they stabilize from 20-22 MT or is there a possibility that they can inch up a bit going forward?A: Several of our consumer segments have been reducing their gas intake. So going forward whatever recovery is there in our existing consumer segments, plus we keep on banking new customers - small and medium, so if everything else remains same the volumes should go up gradually.Q: Is the company considering to possibly cut down on capex till volume visibility comes back?A: We are anyway not doing any big bang capex, only capex which is being done is to mainly connect our customers along the pipeline which are our consumers that can increase the gas transportation volumes and which is something we need to keep on incurring and anyway the capex this year has not been so high if you compare it with earlier years, so some capex will be required.Q: What is your expectation on the ship or pay revenue in Q4 or how is Q4 panning out?A: Ship or pay component which is connected with the D6 gas which has been distributed by several of our customers which we will not book into this quarter till the matter is sorted out in the regulatory forum as well as courts, that situation should continue.Q: What is the outlook for the next financial year? Do you think the kind of peak performance that you saw about 2 quarters back is unlikely to repeat anytime soon?A: I think we have to wait for the volumes to pick up. We keep adding lot of small customers so that should lead to a gradual pick up in volumes, plus any big customers that come up; all these factors will take our volumes higher. This is what we have to keep a watch for.