Mahanagar Gas Ltd · NSE:MGL
Mahanagar Gas — Investor Presentation (November 2018)
40 slides from Mahanagar Gas's investor presentation, Nov 19, 2018
Slide 1: Mahanagar Gas Limited - Regulation 30 Investors Presentation Letter
MAHANAGAR GAS LIMITED MAHANAGAR (GAIL, Govt. of Maharashtra & BGAPH Enterprise) GAS Ref: MGL/CS/SE/2018/210 Date: November 19, 2018 To, Head, Listing Compliance Department Head, Listing Compliance Department BSE Limited National Stock Exchange of India Ltd P. J. Towers, Exchange Plaza, Bandra —Kuria
Slide 2: Presentation to Investors
PRESENTATION TO INVESTORS 1 www.mahanagargas.com
Slide 3: MGL: An Introduction
MIGL: An Introduction MAHANAGAR GAS LIMITED
Slide 4: One of the largest CGD Companies in India
One of the largest CGD Companies in India Attractive Sole authorized distributor of CNG and PNG in Mumbai, its Adjoining Areas and Raigad Market with more than 23 year track record in Mumbai (1) Low-Cost Gas Cost-effective availability of domestic natural gas with sourcing flexibility Availability S
Slide 5: Our Journey: Record of Growth and Excellence
Our Journey : Record of Growth and Excellence Started commercial 200th CNG operations dispensing in Raigad station Listing on NSE and BSE New GA Raigad 110% Net Worth – allocation INR billion 20.95 of Pipeline domestic PE – 3,800 gas As of March 31, 2018 km & 3rd CGS at Steel - 380 Taloja & km 4th C
Slide 6: Areas of Operation
Areas of Operation Business Operations Mira-Bhayander, Navi Mumbai, Thane City, Kalyan, Taloja, Raigad District Ambernath, Areas of Mumbai & (adjacent to Bhiwandi Dombivli, Operation Greater Mumbai existing area of Ulhasnagar, operation) Mira-Bhayander Badlapur, Kalyan Bhiwandi, Thane Dombivily Khar
Slide 7: The MGL Proposition
The MGL Proposition Significant Growth Potential Backed by Favorable Industry Conditions Underpenetrated Market with Significant Potential for Expansion Robust Infrastructure in Place to Support Future Growth Favorable Regulatory environment Cost Effective Sourcing Strategy Strong Operat
Slide 8: Natural Gas and CGD: Attractive Industry
Market Natural Gas and CGD : Attractive Industry Industry Overview • India was the third-largest energy consumer in the world after China and US in 2017(1) • India’s primary energy consumption has more than doubled between 2000 and 2017, reaching ~754 MToe(1) • India’s per capita energy consumption
Slide 9: Attractive Fuel Economics
Attractive Fuel Economics CNG Retains its Price Competitiveness vs. Other Fuels Comparison of Alternative Fuel Costs Commercial PNG Favorably Priced vs. Alternate Fuels Particulars INR / kg or INR / L Particulars UoM Differential (2) CNG 49.61 PNG (4) INR/SCM 45.06 Differential (3) 34% Diesel 75.53
Slide 10: Attractive End Market
Attractive End Market MGL GAs Market Size and Penetration as on Oct. 31, 2018 CNG Vehicle (1) and House holds Restaurants (In Mn.) (Nos.) 5 37% 40% 32% 12,000 4 30% 29% penetration 3.2 3 2.01 20% 2 1.19 10% 1 0.65 0 0% 3,502 CNG Domestic PNG Market Size (Mn) Penetration (Mn.) % Penetration Market Si
Slide 11: Diversified Sourcing Strategy
Diversified Sourcing Strategy CNG & Domestic PNG Industrial / Commercial PNG APM APM Non-APM Term Non-APM Source Western KG Basin (CNG + Dom. PNG) PMT RLNG Spot RLNG Ind. offshore MoPNG • BPCL • GAIL • BGIES • GSPCL Suppliers • Hazira LNG • HPCL • PLL • IOCL GAIL • SEMTIPL • Domestic supply agreemen
Slide 12: Diversified Sourcing Strategy
Diversified Sourcing Strategy Priority Segment Forms Majority 73.76% FY 19 (Till Oct’18) Sales Composition • Allocation 10% over and above the 100% requirement • Pricing APM price significantly lower than market price of imported natural gas 12.53% 6.05% 7.66% • Distribution Majority of MGL’s sales
Slide 13: Enablers: Infrastructure in place
Infrastructure in place Extensive Supply Network Built Over 20 Years Asset Base • Infrastructure Exclusivity CNG Customer Base(3) Fixed Asset(1) of INR 19.69 Bn Mumbai: Up to 2020 ~0.65 Mn Capex(2) of INR 2.7 Bn Adjoining Areas: Up to 2030 Raigad: Up to 2040 Enablers 223 CNG filling stations(3
Slide 14: Regulatory Environment Creating Strong Barriers to Entry and Incumbent Advantage
Regulatory Environment Creating Strong Barriers to Entry and Incumbent Advantage Description Implication for MGL • Built in advantage for incumbent Authorization to lay, build, operate or • Authorization for Mumbai, its adjoining Authorization expand a CGD network areas and Raigad • Infrastructure e
Slide 15: MGL Growth Strategy
MGL Growth Strategy Further develop Increase infrastructure Continue Cost- penetration in Effective and existing markets Reliable Sourcing • Invest in infrastructure Arrangement to cater to MGL’s larger Seek Growth • Increasing population customer base and improve the quality of Opportunities expect
Slide 16: Innovative Modes of Gas Supply
Innovative Modes of Gas Supply Hub & Spoke Method for demand centers located away from pipelines (Virtual pipeline mode) Supply of LNG through small cryogenic cylinders Small LNG cylinders LNG and LCNG fueling stations along Highways CNG-in-a-box / Pole mounted dispensing to optimize CNG sta
Slide 17: MGL Shareholders
MGL Shareholders GAIL (India) Ltd. Shareholding Pattern as of 30th September, 2018 • India’s largest natural gas company with a market share of over 80% FIIs / FPIs, • Possesses transmission network of 19.0% ~11,000 kms of natural gas pipeline transmission network with total capacity of 206 MMSCMD P
Slide 18: Our Experienced Management Team
Our Experienced Management Team – As on 30th September 2018 Mr. Sanjib Datta Mr. Srinivasan Murali, Managing Director (Nominee of GAIL) Senior Vice President - Operations and Maintenance • Over 32 years of experience • Over 15 years of experience at MGL • Heading business development function in GAI
Slide 19: Financial and Operational Performance
Financial and Operational Performance 18
Slide 20: Growth backed by increased customer base and coverage area
Growth backed by increased customer base and coverage area CNG Customers (end users) Growth PNG Customers Growth (In ‘000s) 653 (In ‘000s) 609 1,083 545 1,037 952 470 865 421 804 709 359 643 286 FY 13 FY 14 FY 15 FY 16 FY 17 FY 18 H1 19 FY 13 FY 14 FY 15 FY 16 FY 17 FY 18 H1 19 CNG Volume (mmscmd) P
Slide 21: Revenue and Profitability
Revenue and Profitability Revenue (INR Bn) 5 yr. CAGR CNG 10.2% 5 yr. CAGR PNG 4.2% 5 yr. CAGR Total 8.1% 6.8 7.3 6.0 5.8 7.1 5.5 4.2 14.7 14.3 15.4 13.5 11.6 9.5 8.8 FY 13 FY 14 FY 15 FY 16 FY 17 FY 18 H1 19 Others PNG CNG Gross Profit (INR Bn) 12.0 10.2 8.0 8.5 7.0 7.4 6.7 FY 13 FY 14 FY 15 FY 16
Slide 22: EBITDA and PAT
Profitability Adverse forex rate, EBITDA (INR Bn) Higher RLNG spot rates, o Cautious pricing in view of 110% relatively less increase in allocation of domestic gas alternate fuel prices – so o In 2nd half of FY 16, lower Brent INR 0.24 billion less lower Industrial & margin from Industrial & Comme
Slide 23: Capex and Operating Cash Flows
Capex and Operating Cash Flows The Company’s financial position provides it with flexibility to expand its network in existing markets and expand to new markets in India Capex (INR bn) (1) Operating Cash Flow (INR bn) (2) 6.5 2.7 2.5 2.3 5.3 2.2 2.0 4.4 4.3 4.2 1.8 4.0 1.5 3.5 FY 13 FY 14 FY 15 FY 1
Slide 24: Other Financial Metrics
Other Financial Metrics Particulars FY 13 FY 14 FY 15 FY 16 FY17 FY 18 H1 19 Avg Realization / SCM 19.7 22.7 23.8 23.2 21.5 22.4 24.4 (INR) Gross Margin / SCM (INR) 9 8.8 9 9.4 10.7 12.1 12.3 Opex / SCM (INR) 2.9 3.1 3.6 3.8 4 4.3 4.4 EBITDA / SCM (INR) 6.4 5.9 5.6 5.7 6.9 7.9 8.1 EBITDA Margin % 31
Slide 25: Creating value for shareholders
Creating value for shareholders 20.0 70.0% 61.3% 61.5% 60.8% 18.0 58.8% 60.0% 16.0 6.5 6.5 55.7% 14.0 50.0% 7.5 7.5 7.5 7.5 46.8% 12.0 40.0% 10.0 30.0% 8.0 6.0 12.5 12.5 20.0% 10.0 10.0 10.0 10.0 4.0 10.0% 2.0 - 0.0% FY 13 FY 14 FY 15 FY 16 FY 17 FY 18 Special DPS (INR) Normal DPS (INR) Payout Ratio
Slide 26: Appendix
Appendix MAHANAGAR GAS LIMITED
Slide 27: Board of Directors
Board of Directors – As on 30th September 2018 Mr. Akhil Mehrotra, Non-Executive Chairman (Nominee of BGAPH) • On the Board since March 11, 2016 • Over 27 years of experience in the industry. Presently, Director – Downstream business, BG India • Previously associated with the Reliance Group of Compa
Slide 28: Board of Directors
Board of Directors – As on 30th September 2018 Mr. Premesh Kumar Jain, Non-Executive Director • On the Board effective from April 09, 2018. • Over 35 years of experience in Oil & Gas sector in areas of FX Risk Mgmt, Budgeting & Corporate Accounts • Former Director (Finance) of GAIL for more than 6 y
Slide 29: Statement of Financial Results for the six months ended September 30, 2018
Statement of Financial Results for the six months ended September 30, 2018 INR Mn For six months ended Sr. No. Particulars 30.09.2018 30.09.2017 (Unaudited) (Unaudited) I Revenue from Operations (refer note 6) 14,392.11 11,708.90 II Other Income 334.99 262.83 III Total Income (I + II) 14,727.10 11,9
Slide 30: Statement of Assets and Liabilities as at March 31, 2018
Statement of Assets and Liabilities as at March 31, 2018 INR Mn As at As at Particulars 31st March, 2018 31st March, 2017 ASSETS I. Non-current Assets (a) Property, Plant and Equipment 15,280.59 13,003.09 (b) Capital Work-in-Progress 3,566.23 4,115.28 (c) Intangible Assets 38.91 44.43 (d) Financial
Slide 31: Statement of Assets and Liabilities as at March 31, 2018 (Contd)
Statement of Assets and Liabilities as at March 31, 2018 (Contd….) INR Mn As at As at Particulars 31st March, 2018 31st March, 2017 EQUITY AND LIABILITIES I. Equity (a) Equity Share Capital 987.78 987.78 (b) Other Equity 19,965.69 17,412.60 Total Equity (I) 20,953.47 18,400.38 II. Liabilities A. Non
Slide 32: Statement of Profit and Loss for the year ended March 31, 2018
Statement of Profit and Loss for the year ended March 31, 2018 INR Mn For the year ended For the year ended PARTICULARS 31st March 2018 31st March 2017 Revenue from Operations 24,529.17 22,390.71 Other Income 576.81 526.57 Total Income 25,105.98 22,917.28 Expenses : Cost of Natural Gas and Traded It
Slide 33: Statement of Cash Flows for the year ended March 31, 2018
Statement of Cash Flows for the year ended March 31, 2018 For the year ended For the year ended PARTICULARS 31st March 2018 31st March 2017 ₹ Million ₹ Million I. CASH FLOW FROM OPERATING ACTIVITIES Profit before tax as per Statement of Profit and Loss 7,265.13 6,006.60 Adjustments for: Depreciation
Slide 34: Statement of Cash Flows for the year ended March 31, 2018 (Contd)
Statement of Cash Flows for the year ended March 31, 2018 (Contd….) For the year ended For the year ended PARTICULARS 31st March 2018 31st March 2017 ₹ Million ₹ Million II. CASH FLOW FROM INVESTING ACTIVITIES Payments for Property, Plant and Equipment (2,690.29) (2,545.22) Proceeds from sale of Pro
Slide 35: Summary of Assets and Liabilities
Summary of Assets and Liabilities INR Mn As at As at As at Particulars 31. 03. 2016 31. 03. 2015 31. 03. 2014 EQUITY AND LIABILITIES Shareholders' Funds Share Capital 893.42 893.42 893.42 Reserves and Surplus 14,386.33 13,181.23 12,076.16 Non-current Liabilities Long-term Borrowings 43.76 155.88 79.
Slide 36: Summary Statement of Profit and Loss
Summary Statement of Profit and Loss INR Mn For the year ended Particulars 31. 03 . 2016 31. 03 . 2015 31. 03 . 2014 Revenue from Operations Sale of Natural Gas (Net) 20,653.28 20,778.09 18,686.40 Sale of pipes, fittings and other materials 14.88 4.68 12.43 Other operating income 121.11 166.51 152.7
Slide 37: Summary Statement of Cash Flows
Summary Statement of Cash Flows INR Mn For the year ended Particulars 31. 03. 2016 31. 03. 2015 31. 03. 2014 CASH FLOW FROM OPERATING ACTIVITIES Profit before taxation (as restated) 4,686.49 4,492.94 4,417.83 Adjustments for Depreciation and amortisation expense 840.57 799.09 807.16 Loss on Sale / D
Slide 38: Summary Statement of Cash Flows (Contd)
Summary Statement of Cash Flows (Contd….) INR Mn For the year ended Particulars 31. 03. 2016 31. 03. 2015 31. 03. 2014 CASH FLOW FROM INVESTING ACTIVITIES Purchase of fixed assets, including intangible assets, capital work in progress and capital (2,211.25) (1,975.94) (1,768.44) advances Proceeds fr
Slide 39: Safe Harbor
Safe Harbor • This presentation may contain statements which reflect the management’s current views and estimates and could be construed as forward looking statements. • The future involves certain risks and uncertainties that could cause actual results to differ materially from the current views be
Slide 40: Thank You
Thank You……. MGL House, G-33, Bandra Kurla Complex, Bandra (E) Mumbai – 400 051 T +91 22 6678 5000 F +91 22 6540093/1046 https://www.mahanagargas.com CIN : L40200MH1995PLC088133 39
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