Mahanagar Gas Ltd · NSE:MGL

Mahanagar Gas — Investor Presentation (August 2019)

42 slides from Mahanagar Gas's investor presentation, Aug 23, 2019

  1. Slide 1: Mahanagar Gas Limited filing cover letter

    MAHANAGAR GAS LIMITED GAIL, Govt. of Maharashtra & BGAPH Enterprise MAHANAGAR GAS Ref: MGL/CS/SE/2019/279 Date: August 23, 2019 To, Head, Listing Compliance Department Head, Listing Compliance Department BSE Limited National Stock Exchange of India Ltd P. J. Towers, Exchange Plaza, Bandra —Kuria Com

  2. Slide 2: Presentation to Investors June-2019

    PRESENTATION TO INVESTORS June-2019 1 www.mahanagargas.com

  3. Slide 3: MGL: An Introduction

    MAHANAGAR GAS LIMITED MIGL: An Introduction

  4. 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 24 year track record in Mumbai (1) Low-Cost Gas Cost-effective availability of domestic natural gas with sourcing flexibility Availability S

  5. Slide 5: Our Journey: Record of Growth and Excellence

    Our Journey : Record of Growth and Excellence Net Worth – INR billion 24.0 Started Commercial 200th CNG operations in dispensing Raigad station New GA Raigad Listing on NSE As of March 31, 2019 110% and BSE allocation of Pipeline domestic gas PE – 3,800 km & 3rd CGS at Steel - 380 km Taloja & 4th CG

  6. 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

  7. 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

  8. 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 2018(1) • India’s primary energy consumption has more than doubled between 2000 and 2018, reaching ~809 MToe(1) • India’s per capita energy consumption

  9. 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 51.99 (1) PNG (4) INR/SCM 37.44 Differential (3) 24% Diesel 68

  10. Slide 10: Attractive End Market

    Attractive End Market MGL GAs Market Size and Penetration as on June 30, 2019 CNG Vehicle (1) and House holds Restaurants (In Mn.) (Nos.) 5 41% 40% 35% 12,000 4 30% 30% penetration 3.2 3 2.01 20% 2 1.32 10% 1 0.71 0 0% 3,626 CNG Domestic PNG Market Size (Mn) Penetration (Mn.) % Penetration Market Si

  11. Slide 11: Diversified Sourcing Strategy

    Diversified Sourcing Strategy CNG & Domestic PNG Industrial / Commercial PNG APM Non-APM Term Non-APM Source Western (CNG + Dom. PNG) PMT RLNG Spot RLNG Ind. offshore MoPNG  BPCL  GAIL  BGIES  GSPCL Suppliers  Hazira LNG  HPCL  PLL  IOCL GAIL  SEMTIPL  TPL  Domestic supply agreement - MoP

  12. Slide 12: Priority Segment Forms Majority - Diversified Sourcing Strategy

    Priority Segment Forms Majority Diversified Sourcing Strategy 73.5% FY 19 Sales Composition • Allocation 10% over and above the 100% requirement • Pricing APM price significantly lower than market pri ce of imported natural gas 12.7% 7.7% 6.1% • Distribution Majority of MGL’s sales are from Priority

  13. Slide 13: Infrastructure in place

    Infrastructure in place Extensive Supply Network Built Over 20 Years Asset Base • Infrastructure Exclusivity CNG Customer Base(2) Fixed Asset of INR 21.33 Bn(1)  Mumbai: Up to 2020 ~0.71 Mn Capex for FY 18-19 INR 3.6 Bn  Adjoining Areas: Up to 2030  Raigad: Up to 2040 Enablers 240 CNG filling sta

  14. 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 • Authorization for Mumbai, its adjoining expand a CGD network areas and Raigad • Infrastructure e

  15. 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 customer base and • Increasing population improve the quality of Opportunities expect

  16. 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

  17. Slide 17: MGL Shareholders

    MGL Shareholders GAIL (India) Ltd. Shareholding Pattern as of 30th June 2019 • India’s largest natural gas company with a market share of over 80% • Possesses transmission network of FIIs / FPIs, ~11,000 kms of natural gas pipeline 24.3% transmission network with total capacity of 206 MMSCMD Promote

  18. Slide 18: Our Experienced Management Team

    Our Experienced Management Team – As on 30th June 2019 ….. Mr. Sanjib Datta Mr. Deepak Sawant Managing Director (Nominee of GAIL) Deputy Managing Director (Nominee of GAIL)  Over 32 years of experience  Over 28 years of experience  Heading business development function in GAIL Prior to joining 

  19. Slide 19: Our Experienced Management Team (continued)

    ….. Our Experienced Management Team – As on 30th June 2019 Mr. Chakrapani Atmakur Mr. Gurvinder Singh, Vice President - Human Resources & Vice President - Projects Corporate Communication  Over 28 years of experience  Over 28 years of experience  Prior experience at Nayara Energy Limited  Prior

  20. Slide 20: Financial and Operational Performance

    Financial and Operational Performance 19

  21. Slide 21: 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) (In ‘000s) 692 709 609 545 1,150 1,177 470 1,037 421 952 359 804 865 709 FY 14 FY 15 FY 16 FY 17 FY 18 FY 19 3M 20 FY 14 FY 15 FY 16 FY 17 FY 18 FY 19 3M 20 CNG Volume (mmscmd)

  22. Slide 22: Revenue and Profitability

    Revenue and Profitability Revenue (INR Bn) 5 yr. CAGR CNG 10.3% 5 yr. CAGR PNG 4.4% 5 yr. CAGR Total 8.2% 8.8 6.0 6.8 7.3 5.8 7.1 18.8 13.5 14.7 14.3 15.4 11.6 2.3 5.2 FY 14 FY 15 FY 16 FY 17 FY 18 FY 19 3M 20 Others PNG CNG Gross Profit (INR Bn) 13.9 12.0 10.2 7.4 8.0 8.5 4.1 FY 14 FY 15 FY 16 FY 1

  23. Slide 23: Profitability

    Profitability o Cautious pricing in view of forthcoming 110% allocation of domestic gas o In 2nd half of FY 16, lower EBITDA (INR Bn) Brent  lower Industrial & Commercial prices 8.9 7.8 6.4 4.9 4.9 5.1 2.8 FY 14 FY 15 FY 16 FY 17 FY 18 FY 19 3M 20 PAT (INR Bn) 5.5 4.8 3.9 3.0 3.0 3.1 1.7 FY 14 FY 1

  24. Slide 24: 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) 3.6 In 18-19, OMC trade discount settlement of 6.8 Rs 0.36 bn & higher 6.5 dir

  25. Slide 25: Other Financial Metrics

    Other Financial Metrics Particulars FY 14 FY 15 FY 16 FY17 FY 18 FY 19 Avg Realization / SCM (INR) 22.7 23.8 23.2 21.5 22.4 25.7 Gross Margin / SCM (INR) 8.8 9 9.4 10.7 12.1 12.7 Opex / SCM (INR) 3.1 3.6 3.8 4 4.3 4.7 EBITDA / SCM (INR) 5.9 5.6 5.7 6.9 7.9 8.2 EBITDA Margin % 25.9% 23.4% 24.7% 31.7%

  26. Slide 26: Creating value for shareholders

    Creating value for shareholders Note: Payout Ratio calculated including Dividend Distribution Tax. Interim dividend of Rs.9.5 per share was paid for FY 19 and Final dividend is proposed & pending for shareholders’ approval at AGM. 25

  27. Slide 27: Appendix

    9 Appendix coe MAHANAGAR GAS LIMITED

  28. Slide 28: Board of Directors – As on 30th June 2019

    Board of Directors – As on 30th June 2019 Mr. Bhuwan Chandra Tripathi - Chairman • Chairman and Managing Director of GAIL India Limited since August 2009. • Over 35 years of rich experience in shaping energy policies and regulations of the natural gas value chain • Under his leadership, GAIL ranks a

  29. Slide 29: Board of Directors – As on 30th June 2019

    Board of Directors – As on 30th June 2019 Mr. Raj Kishore Tewari, Independent Director  On the board since March 2015  Previously served as the Chairman of the Central Board of Direct Taxes in the Ministry of Finance, Govt. of India  M.Sc. (Fiscal Studies) from the University of Bath, UK, M.Sc. (

  30. Slide 30: Statement of Financial Results for the quarter ended June 30, 2019

    Statement of Financial Results for the quarter ended June 30, 2019 INR Mn For year ended Sr. No. Particulars 30.06.2019 30.06.2018 (Unaudited) (Unaudited) I Revenue from Operations 8,311.91 6,762.74 II Other Income 203.39 153.36 III Total Income (I + II) 8,515.29 6,916.10 IV Expenses : Cost of Natur

  31. Slide 31: Statement of Assets and Liabilities as at March 31, 2019

    Statement of Assets and Liabilities as at March 31, 2019 INR Mn As at As at Particulars 31st March, 2019 31st March, 2018 ASSETS I. Non-current Assets (a) Property, Plant and Equipment 17,587.53 15,280.59 (b) Capital Work-in-Progress 3,696.87 3,566.23 (c) Intangible Assets 46.61 38.91 (d) Financial

  32. Slide 32: Statement of Assets and Liabilities as at March 31, 2019 (Contd)

    Statement of Assets and Liabilities as at March 31, 2019 (Contd….) INR Mn As at As at Particulars 31st March, 2019 31st March, 2018 EQUITY AND LIABILITIES I. Equity (a) Equity Share Capital 987.78 987.78 (b) Other Equity 23,000.92 19,965.69 Total Equity (I) 23,988.70 20,953.47 II. Liabilities A. Non

  33. Slide 33: Statement of Profit and Loss for the year ended March 31, 2019

    Statement of Profit and Loss for the year ended March 31, 2019 INR Mn For the year ended For the year ended PARTICULARS 31st March 2019 31st March 2018 Revenue from Operations 30,567.93 24,529.17 Other Income 777.13 576.81 Total Income (I + II) 31,345.06 25,105.98 Expenses : Cost of Natural Gas and

  34. Slide 34: Statement of Cash Flows for the year ended March 31, 2019

    Statement of Cash Flows for the year ended March 31, 2019 INR Mn For the year ended For the year ended PARTICULARS 31st March 2019 31st March 2018 I. CASH FLOW FROM OPERATING ACTIVITIES Profit before tax as per Statement of Profit and Loss 8,369.12 7,265.13 Adjustments for: Depreciation and Amortisa

  35. Slide 35: Statement of Cash Flows for the year ended March 31, 2019 (Contd)

    Statement of Cash Flows for the year ended March 31, 2019 (Contd….) INR Mn For the year ended For the year ended PARTICULARS 31st March 2019 31st March 2018 II. CASH FLOW FROM INVESTING ACTIVITIES Payments for Property, Plant and Equipment (3,624.50) (2,690.29) Proceeds from sale of Property, Plant

  36. Slide 36: Summary of Assets and Liabilities

    Summary of Assets and Liabilities INR Mn As at As at Particulars 31st March, 2017 31st March, 2016 ASSETS I. Non-current Assets (a) Property, Plant and Equipment 13,003.09 11,240.60 (b) Capital Work-in-Progress 4,115.28 4,288.65 (c) Intangible Assets 44.43 46.87 (d) Financial Assets (i) Trade receiv

  37. Slide 37: Summary of Assets and Liabilities (Contd)

    Summary of Assets and Liabilities (Contd….) INR Mn As at As at Particulars 31st March, 2017 31st March, 2016 EQUITY AND LIABILITIES I. Equity (a) Equity Share Capital 987.78 893.42 (b) Other Equity 17,412.60 16,390.87 Total Equity (I) 18,400.38 17,284.29 II. Liabilities A. Non-current Liabilities (a

  38. Slide 38: Summary Statement of Profit and Loss

    Summary Statement of Profit and Loss INR Mn For the year ended For the year ended PARTICULARS 31st March 2017 31st March 2016 Revenue from Operations 22,390.71 22,851.31 Other Income 526.57 471.78 Total Income (I + II) 22,917.28 23,323.09 Expenses : Cost of Natural Gas and Traded Items 10,183.62 12,

  39. Slide 39: Summary Statement of Cash Flows

    Summary Statement of Cash Flows INR Mn For the year ended For the year ended PARTICULARS 31st March 2017 31st March 2016 I. CASH FLOW FROM OPERATING ACTIVITIES Profit before tax as per Statement of Profit and Loss 6,006.60 4,716.31 Adjustments for: Depreciation and Amortisation Expense 951.32 826.08

  40. Slide 40: Summary Statement of Cash Flows (Contd)

    Summary Statement of Cash Flows (Contd….) INR Mn For the year ended For the year ended PARTICULARS 31st March 2017 31st March 2016 ₹ Million ₹ Million II. CASH FLOW FROM INVESTING ACTIVITIES Payments for Property, Plant and Equipment (2,569.34) (2,154.33) Proceeds from sale of Property, Plant and Eq

  41. Slide 41: 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

  42. Slide 42: 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 41

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