Mahanagar Gas Ltd · NSE:MGL
Mahanagar Gas — Investor Presentation (June 2017)
39 slides from Mahanagar Gas's investor presentation, June 2017
Slide 1: Presentation to Investors
PRESENTATION TO INVESTORS June, 2017
Slide 2: MGL: An Introduction
MGL: An Introduction MAHANAGAR GAS LIMITED
Slide 3: 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 21 year track record in Mumbai (1) Low-Cost Gas Cost-effective availability of domestic natural gas with sourcing flexibility Availability S
Slide 4: Our Journey: Record of Growth and Excellence
Our Journey : Record of Growth and Excellence 200th CNG dispensing station Listing on NSE and BSE New GA Raigad 110% allocation of domestic Net Worth – Pipeline PE – 3,800 km gas INR billion 18.4 & Steel - 380 km 3rd CGS at Taloja & 150th CNG 4th CGS at dispensing Ambernath 2nd CGS at station Pipeli
Slide 5: 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 6: MGL: Strong Fundamentals
MGL : Strong Fundamentals MAHANAGAR GAS LIMITED
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 Operational and Fi
Slide 8: Attractive Industry: Natural Gas and CGD
Attractive Industry : Market Natural Gas and CGD Industry Overview • India was the third-largest energy consumer in the world after China and US in 2015 • India’s primary energy consumption has more than doubled between 2000 and 2015, reaching ~701 MToe • India’s per capita energy consumption is one
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 CNG 40.82 PNG INR/SCM 28.94 differential differential ~14% 32% differential differe
Slide 10: Attractive End Market
Attractive End Market Mumbai Market Size and penetration CNG Vehicle and House holds Restaurants Mn Nos. Nos. 5 31% 40% 10000 30% 31% penetration 4 30% 3 3 1.8 20% In Mn. 2 0.94 1 0.54 10% 0 0% 3083 CNG Domestic PNG Market Size (Mn) Penetration (Mn.) % Penetration Market Size (Nos.) Penetration (Nos
Slide 11: Diversified Sourcing Strategy
Diversified Sourcing Strategy CNG & Domestic PNG Industrial / Commercial PNG Source APM PMT Term RLNG Spot RLNG MoPNG • BPCL • GAIL • BGIES • GSPCL Suppliers • Hazira LNG • HPCL • PLL • IOCL GAIL • Domestic supply agreement - MoPNG • Purchase of imported RLNG for industrial/ allocates gas for entire
Slide 12: Diversified Sourcing Strategy
Diversified Sourcing Strategy Priority Segment Forms Majority FY 17 Sales Composition 73.9% • Allocation 10% over and above the 100% requirement • Pricing APM price significantly lower than market price of imported natural gas 11.8% 7.8% • Distribution 6.5% Majority of MGL’s sales are from Priority
Slide 13: Infrastructure in Place: Enablers
Infrastructure in place Extensive Supply Network Built Over 20 Years (1) Asset Base (2) CNG Customer Base • Infrastructure Exclusivity Fixed Asset of INR 17.29 Bn ~0.54 Mn Mumbai: Up to 2020 Average Capex of INR 2.4 Bn Adjoining Areas: Up to 2030 Raigad: Up to 2040 Enablers 203 CNG filling stations
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: MGL Stakeholders
MGL Stakeholders Shareholding Pattern as of 31st March, 2017 GAIL (India) Ltd. • India’s largest natural gas company Others, with a market share of over 80% 10% • Possesses transmission network of Mutual ~11,000 kms of natural gas pipeline Funds, 5% transmission network with total capacity of 210 MM
Slide 17: Our Experienced Management Team
Our Experienced Management Team Mr. Rajeev Mathur, Managing Director • Over 29 years of experience • Served 4 years as an Executive Director (Marketing) at GAIL Ms. Susmita Sengupta, Technical Director • On the Board since February 2014 • Prior experience at DCP Midstream in Denver, Colorado and in
Slide 18: Financial and Operational Performance
Financial and Operational Performance 18
Slide 19: 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) 952.2 545.5 865.2 470.5 804.0 421.3 708.6 643.5 359.1 285.5 FY 13 FY 14 FY 15 FY 16 FY 17 FY 13 FY 14 FY 15 FY 16 FY 17 CNG Volume (mmscmd) PNG Volume (mmscmd) 0.67
Slide 20: Revenue and Profitability
Revenue and Profitability INR Bn Revenue (1) CNG PNG Others 5 yr. CAGR CNG 10.9% 5 yr. CAGR PNG 5.7% 5 yr. CAGR Total 9.2% 7.3 6.0 5.8 7.1 5.5 13.5 14.7 14.3 9.5 11.6 FY 13 FY 14 FY 15 FY 16 FY 17 Gross Profit (2) 10.2 8.0 8.5 7.0 7.4 FY 13 FY 14 FY 15 FY 16 FY 17 Note: (1) Revenue from Operations (
Slide 21: Profitability
Profitability INR Bn Adverse forex rate, Higher RLNG spot o Cautious pricing in view of 110% rates, relatively less increase in alternate allocation of domestic gas EBITDA (1) fuel prices – so INR 0.24 billion less o In 2nd half of FY 16, lower Brent lower margin from Industrial & Commercial Industr
Slide 22: 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 INR Bn Capex (1) Operating Cash Flow 5.5 2.6 2.3 4.4 4.2 2.2 4.3 2.0 4.0 1.8 FY 13 FY 14 FY 15 FY 16 FY 17 FY 13 FY 14 FY 15 FY 16
Slide 23: Other Financial Metrics
Other Financial Metrics Particulars FY 13 FY 14 FY 15 FY 16 FY17 Avg Realization / SCM (INR) 19.7 22.7 23.8 23.2 21.5 Gross Margin / SCM (INR) 9.0 8.8 9.0 9.4 10.7 Opex / SCM (INR) 2.9 3.1 3.6 3.8 4.0 EBITDA / SCM (INR) 6.4 5.9 5.6 5.7 6.9 EBITDA Margin % 31.9% 25.9% 23.4% 24.7% 31.7% Days Receivabl
Slide 24: Creating value for shareholders
Creating value for shareholders 61.3% 61.5% 60.8% 58.8% 55.7% 6.5 7.5 7.5 7.5 7.5 12.5 10.0 10.0 10.0 10.0 FY 13 FY 14 FY 15 FY 16 FY 17 Normal DPS (INR) Special DPS (INR) Payout Ratio % 24 Note: Payout Ratio calculated including Dividend Distribution Tax
Slide 25: Appendix
Appendix MAHANAGAR GAS LIMITED
Slide 26: Board of Directors – As on 31st March 2017
Board of Directors – As on 31st March 2017 Dr. Ashutosh Karnatak, Non-Executive Chairman (Nominee of GAIL) • Over 30 years of experience • Presently holds the position of Director (Projects) with GAIL • D. Phil, University of Petroleum & Energy Studies, Dehradun, M. Tech (Energy Studies), IIT Delhi
Slide 27: Board of Directors – As on 31st March 2017
Board of Directors – As on 31st March 2017 Mr. Jainendar Kumar Jain, Independent Director • On the Board since January 2008 • Served as Director (Finance) at GAIL from 1996 to 2005 • Chartered Accountant and fellow member of ICAI and holds a Bachelor’s degree in Commerce from Vikram University, Ujja
Slide 28: Balance Sheet as at March 31, 2017
Balance Sheet as at March 31, 2017 INR Mn Particulars As at 31st March 2017 As at 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 Receiva
Slide 29: Balance Sheet as at March 31, 2017
Balance Sheet as at March 31, 2017 INR Mn Particulars As at 31st March 2017 As at 31st March 2016 EQUITY AND LIABILITIES I. Equity (a) Equity Share Capital 987.78 893.42 (b) Other Equity 17,412.60 16,390.86 Total Equity (I) 18,400.38 17,284.28 II. Liabilities A. Non-current Liabilities (a) Financial
Slide 30: Statement of Profit and Loss
Statement of Profit and Loss INR Mn For the year For the year Particulars ended ended 31st March 2017 31st March 2016 I Revenue from Operations 22,390.71 22,851.31 II Other Income 526.57 471.78 III Total Income (I + II) 22,917.29 23,323.09 IV Expenses : Cost of Natural Gas and Traded Items 10,183.62
Slide 31: Statement of Cash Flows
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 Writeof
Slide 32: Statement of Cash Flows
Statement of Cash Flows INR Mn For the year ended For the year ended PARTICULARS 31st March 2017 31st March 2016 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 Equipment 0.55 1.09 Payments for purchas
Slide 33: Statement of Financial Results for the quarter ended March 31, 2017
Statement of Financial Results for the quarter ended March 31, 2017 INR Mn Sr. For three months ended Particulars No. Q4 (2016-17) Q3 (2016-17) Q4 (2015-16) I Revenue from Operations 5,764.11 5,543.39 5,614.17 II Other Income 129.45 123.98 145.44 III Total Income (I + II) 5,893.56 5,667.37 5,759.61
Slide 34: Summary of Assets and Liabilities
Summary of Assets and Liabilities INR Mn As at As at As at Particulars 31. 03. 2015 31. 03. 2014 31. 03 . 2013 EQUITY AND LIABILITIES Shareholders' Funds Share Capital 893.42 893.42 893.42 Reserves and Surplus 13,181.23 12,076.16 10,932.86 Non-current Liabilities Long-term Borrowings 155.88 79.83 98
Slide 35: Summary Statement of Profit and Loss
Summary Statement of Profit and Loss INR Mn For the year ended Particulars 31. 03 . 2015 31. 03 . 2014 31. 03 . 2013 Revenue from Operations Sale of Natural Gas (Net) 20,778.09 18,686.40 14,977.03 Sale of pipes, fittings and other materials 4.68 12.43 8.30 Other operating income 166.51 152.70 158.45
Slide 36: Summary Statement of Cash Flows
Summary Statement of Cash Flows INR Mn For the year ended Particulars 31. 03. 2015 31. 03. 2014 31. 03. 2013 CASH FLOW FROM OPERATING ACTIVITIES Profit before taxation (as restated) 4,492.94 4,417.83 4,423.54 Adjustments for Depreciation and amortisation expense 799.09 807.16 711.08 Loss on Sale / D
Slide 37: Summary Statement of Cash Flows
Summary Statement of Cash Flows INR Mn For the year ended Particulars 31. 03. 2015 31. 03. 2014 31. 03. 2013 CASH FLOW FROM INVESTING ACTIVITIES Purchase of fixed assets, including intangible assets, capital work in progress and capital (1,975.94) (1,768.44) (2,265.81) advances Proceeds from sale of
Slide 38: 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 39: MGL House, Bandra Kurla Complex, Mumbai
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 : U40200MH1995PLCO88133 39