Mahanagar Gas (NSE:MGL) Q1 2027 Earnings Call

0:00 Ladies and gentlemen, good day, and welcome to Mahanagar Gas Q1 FY 'twenty seven Earnings Conference Call hosted by Prabhudas Iladar, India Limited. As a reminder, all participant lines will be in a listen only mode, and there will be an opportunity for you to ask questions after the presentation concludes. So you need assistance during this conference call, please signal and operate by pressing star Please note that this conference is being recorded. I now hand the conference over to Mr. Indra Kumar Gupta from India Private Limited. Thank you, and over to you, sir. Thank you, Nisya. On behalf of PL Capital, we would like to welcome all the participants.

0:47 So from the management, we have mister Praveer Kumar Srivastava, managing director mister, deputy managing director Mr. Rajesh Patel, Chief Financial Officer. Before we begin, I would like to mention that some of the statements made in today's discussion may be forward looking in the nature, and we believe that expectations contained in the statement are reasonable. However, these statements involve a number of risks and uncertainties that may lead to different results. We urge you to consider that quarterly numbers are not a reflection of long term trends or indication of full year results. With that said, I now hand over the call to the management. Over to you, sir. A very good afternoon, and welcome to the earnings call of Mahanagar Gas Limited for the first quarter of the financial year twenty twenty six-twenty twenty seven.

1:43 I would like to thank all of you for attending our earnings call today. The ongoing geopolitical conflict in West Asia has triggered a global energy crisis, significantly affecting the availability and pricing of natural gas in India. There are initial signs of a gradual resumption of LNG shipments through the straight foremost. Supply conditions remain uncertain and global LNG markets continue to experience volatility. Our 100% of our domestic PNG, DPNG requirement and the major portion of our CNG requirement are sourced from domestically produced natural gas, ensuring uninterrupted supply to our DPNG customers and continued reliable supply to our CNG customers.

2:31 Gas supplies to industrial and commercial customers are partly curtailed. Prices may be affected due to global indices in the near term. Once the war situation deescalates, the prices are expected to reduce over a period. We continue to closely monitor the situation and remain committed to maintain uninterrupted gas supply to our customers. P and G Drive 2.0 has enabled MGL to substantially enhance the pace of PNG conversions through focused operational improvements, resource augmentation and stronger coordination with government agencies and other stakeholders. The initiative has laid a strong foundation for sustained growth, improved infrastructure utilization and continued expansion of the P and G network, while maintaining high safety standards and quality.

3:23 MGL continues to create CGD infrastructure across its business segments in the license area. During the quarter, 7,461 DPNG conversions were achieved, taking the cumulative DPNG conversions to 2,170,000 as on 06/30/2026. We have laid 156.57 kilometers of steel and PE pipeline, taking the total length of over 8,477.01 kilometers. We added one CNG station during this quarter, and with this we have five nineteen stations as on 06/30/2026. We added two ninety one industrial and commercial customers during this quarter.

4:11 As on 06/30/2026, we have 6,198 industrial and commercial customers. During the quarter, there is an addition of 26,007 CNG vehicles and now we have more than 1,310,000 CNG vehicles registered in our geographies as of 06/30/2026. Coming to MGL's operations compared to the corresponding quarter of last year, average overall sales volume has increased from 4.456 to 4.766 MMS CMD, which is an increase of 7.01% sales volume. Sales volume of the CNG has increased from 3.185 mmHcmd to 3.496 mmHcmd, which is an increase of 9.74%.

5:06 Sales for domestic DPNG has increased from 0.571 MMScMD to 0.623 MMScMD, which is an increase of 9.09%. In case of Industrial and Commercial, sales volume has decreased from 0.698 mmHcmd to 0.648 mmHcmd, a decrease of 7.15%. During the quarter, we achieved overall average sales volume of 4.7666 MMScMD as against 4.672 MMScMD in the previous quarter, which is an increase of 2.01%. Sales volume in case of CNG has increased from 3.349 MMScMD to 3.496 MMScMD, which is an increase of 4.39.

6:00 Sale of domestic DPNG has increased from 0.605 mmHcmd to 0.623 mmHcmd, which is an increase of 2.98%. In case of industrial and commercial, a 20% cut was implemented as per government directive. However, sales volume achieved is 0.648 MMScMD as compared to 0.719 MMScMD in the previous quarter. EBITDA from operations for the quarter is INR $3.43 crores as compared to the previous quarter EBITDA of INR $2.60 crores, an increase of 31.74. Net profit after tax for the quarter is INR194 crores as compared to previous quarter net profit after tax of INR132 crores, an increase of 46.83%.

6:59 During the quarter, we have successfully completed the transition from SAP ECC to SAP S4HANA, achieving a key milestone in our digital transformation initiative. With this, I conclude and would now like to open the floor for questions. Thank you very much for your patience. Thank you. Thank you very much. We will now begin the question and answer session. Star and one on the touch tone telephone. If you wish to remove yourself from the question queue, you may press star and two. Participants are requested to use handsets while asking a question. Ladies and gentlemen, we'll wait for a moment while the question queue assembles.

7:44 The first question is from the line of from ICICI Securities. Please go ahead. Thank you for the opportunity, sir. Just one appreciates that volume growth was probably lower primarily because of the decline that one has seen in the industrial and commercial segment. Now while there is a 20% cut in terms of domestic gas or available gas allocation, just wanted to understand what our sourcing mix was for this quarter? And how are we looking at Q2 in terms of our sourcing requirements and supply availability? If you can break it down in terms of various sources, that will be great. That was my first question. Are you only referring to sourcing for industrial and commercial? No. Overall will also be fine. You can give me an overall color on what the overall sourcing looks like today.

8:35 Either percentage volumes, whatever you can share. At a company level, you know, roughly 30% is available through APM, maybe around 21%, 22% is available through NWG and pooled gas put together. Roughly 14% to 15% is through HPHT. Another so our actual signed contract with respect to Henry Hub was higher, but roughly 21%, 22% has been received through HH contract. And rest is some small brand contracts or whatever we could buy through IGX and spot. So this is broadly the pickup of gas.

9:22 Got it. Sir, as a follow-up then, what was the effective price then of the gas that we sourced other than the top coal, in this case, the spot LNG and Brent Lake? What was roughly the blended cost that is there for the quarter? So if you look at our dependence on Brent Lake as well as spot was very minimal. Of course, spot though very minimal, at times, I think it has touched almost $20 per MMBtu. Whereas we have received most of the gas through pool mechanism, which was in the range of $12.5 to $13 and Brent linked around $13 $14 was the price during the quarter.

10:12 Got it, sir. The second question was with respect to gas realizations. Now sir, obviously, there were some price increases taken for CNG and even domestic, but still the realization improvement seems to be fairly stark. Can we get a sense of is the range of pricing that was there in the industrial and commercial segment for this quarter? So as you know that we have been pricing our industrial and commercial customers linked to alternate fuel. In case of commercial, mainly linked to the bulk commercial bottle LPG and for industrial commercial, it is FOLDU. So compared to the previous quarter, roughly, there is an increase in the range of 27 per cubic meter to almost INR 32 per cubic meter. On the higher side, it is main realization in commercial segment and industrial is in the lower range. This is the over last quarter I'm talking about.

11:11 This is the kind of increase we have seen. So last quarter was probably one of the lowest as far as Brent was concerned. And hence, the realization for industrial was probably lowest. Probably this quarter, Q1 of this year, we have seen highest Brent and accordingly, the price realization has also remained good. So if you compare, say, around $60 to $63 Brent and this quarter, if it was around 95 to $100 so that is what is proportionate upside on realization with respect to industrial commercial prices. Got it. So last question, if I may. What was the volume, if I can ask from Unison in this quarter's numbers?

11:58 And what sort of guidance of margins are we sort of looking at, assuming, let's say, that this dispute or the conflict continues to be there even for the next three months? What is the realistic margin number we can work with? Volume overall, as I think in the MD's speech, point seven six six was the total volume at company level. Of that, around 322,000 or 322 MHC, MD average for the quarter is towards Unison Enviro GAs. Now does anybody's guess that what may happen to the ongoing West Asia crisis? And maybe around first week of July, everything was normalized and suddenly, it again started.

12:45 You may be aware, once Hormuz was coming to almost The U. S. And Iran was reaching some agreement, Even government has withdrawn the pool gas during that time. And again, after maybe seven, eight days, the thing started and it has impacted supplies through hormones. So prices of since the supply is impacted, prices and the quantity available has also gone up. So very difficult to tell you on what could be the margin for at least this quarter or going forward unless you have complete resolution on this conflict at West Asia.

13:31 However, we have been making an attempt at how do we minimize our weighted average gas costs. So we have taken some steps towards that. And hopefully, we will be able to contain. But at a point of time, there could be a situation where gas cost is out of control. Generally, we don't put a curtailment on the supplies and we try and meet the demand except wherever it is possible to put some curtailment with respect to larger industrial customer where it is possible to control. Public at large, which is dependent for CNG, we don't push you may see some spike maybe at least for next one or two months.

14:19 Currently, that is a situation which you can see in the pricing of JKM and the spot. So very difficult to call on margin. Definitely, it'll be under pressure for at least one or two months until this crisis gets resolved or some settlement happens. No. No. Understood, sir. That is perfectly clear. Thank you so much. And all the best. Yeah. Thank you. Ladies and gentlemen, in order to ensure that the management is able to address questions from all participants in the conference, please limit your questions to two per participant. Should you have a follow-up question, we would request you to rejoin the queue. The next question is from the line of Yogesh Patel from Dollar Capital.

15:05 Please go ahead. Thanks for taking my questions, and congratulations for the great set of numbers, sir. Sir, question is again focusing on the CNG volume growth 9.7% Y o Y. What was the major volume growth driver for the CNG during this quarter? That's one. As you mentioned that 26,000 CNG vehicle addition during the quarter we have seen. Can you provide some kind of a breakup in PV, HCV, three wheel, auto, buses, it would be helpful? And we wanted to know on the GA wide CNG volume growth or overall volume growth on a Y o Y basis, that would be helpful. So Yogesh, as far as volume in a particular period is concerned, the dependence on the quarter's additional vehicle is not so high.

15:57 It is the cumulative base of vehicle, which actually makes the difference. And the number of stations which we have been adding in last two years, substantial number of stations have been added. Good amount of commercial vehicles have been added. Even private bus fleet have been added. Okay. We'll share the number actually during the quarter, what is the breakup. As far as volume growth is concerned, GA wise, GA2 is probably the highest selling GA, which is more than almost 2.1 MMScMD. I already said earlier, SBUs of Unison is roughly 0.322 MMScMD.

16:43 Compared to last year same quarter, it was almost 0.224. So you can see it is almost growing more than 30%, 35%. GA1, also there is a growth marginally. Last year, it was in the range of 1.9 MMS CMD, whereas I'm talking about overall company volume, GA wise, not only CNG. And this quarter, it is almost 1.95 MMS CMD, okay? And as far as Rigurd is concerned, it was roughly 0.33 last year and this quarter, it is 0.4 MMS CMD. So this is the growth across and this is despite some reduction in industrial commercial volume, maybe almost to the extent of 8% to 9%.

17:30 So there is no dearth of demand as such. And traditionally, I think monsoon also sees some amount of traffic jam, which helps us because the consumption of fuel goes up. So that is one of the reason. Just wanted to continue on the CNG volume growth. Any guidance overall basis on the volume growth you would like to give for FY 'twenty seven and 'twenty eight? Price Volume growth, and volumes are related, okay. So as earlier question I answered, there could be some need to do a price increase also. Assuming that things come to a reasonable level and we are able to maintain the prices, then we do expect that growth should be in the range of 8% to 9% only for CNG.

18:20 And on industrial commercial side, today, is a lot of demand. It is our ability to supply connect. In fact, because of the curtailment of gas and force majeure in most of the RLNG supplies coming out from outside India, we are not able to scale up the volume. Otherwise, you would have seen much more volume increase in industrial commercial as well. And with the P and G Drive II, where government intends to put and replace LPG with as far as domestic or commercial consumption is concerned. So that is also going to have a great push. Only I think now the hurdle is when do we see the West Asia crisis coming to an end and prices normalizing.

19:10 Volume growth, I don't see there is any challenge. It is a challenge of how do you have a better gas input cost and how do you realize better margin. Last question on the P and Industrial Commercial side. Can you please share some gross margin details on the P and G Industrial Commercial? The calculations are suggesting that it has been sharply up on the sequential basis, at least in the Q1 FY 'twenty seven. So do you think you will be able to maintain that higher gross margins on the P and G Industrial Commercial segment going forward? So in our case, I think good thing is there is always a balancing between realization linked to Brent and maybe CNG and domestic, which has its own limitation due to the alternate fuel. So which is very much seen in this quarter, where definitely we have slightly lost out and there was a pressure of margin in case of CNG, whereas it has been very well compensated through realization in Brent.

20:14 And on our side today, what Henry contracts has also helped because Henry Hub index, which is mainly the input cost for shortage in the CNG as well as some part of industrial commercial. So if Henry Hub remains low and Brent remains high, definitely our margins will be high. And whenever Brent comes down and in turn, Indian crude basket also comes down, then it saves our cost on the priority sector, CNG and domestic PNG. So it is acting as a both balancing. Of course, this quarter slightly abnormal. Generally, you don't see $100 plus Brent and this kind of a realization. So one has to look at what is the longer tenure return on industrial commercial rather than seeing only quarter on quarter.

21:04 As Q4 was slightly abnormal with respect to lower margin because Brent was low and Henry of went up, whereas this quarter is on the other side, both have helped us, price realization as well as bad cost. But at overall company level, our endeavor is to maintain EBITDA margin in the level of in the range of INR 8 to INR 9 per SCM. Yes, sir. Thanks a lot. This was really helpful and all the best. Thank you. You. The next question is from the line of Puneet Banka from Nomura. Please go ahead. Hi, sir. Thanks for the opportunity. Firstly, on the CNG price hikes that you have taken over the last two, three months.

21:51 So assuming that your LNG prices go back to pre war levels and the government continues with the price high spec in petrol diesel, so will there be rollback in prices for CNG or you will be more aligned towards the differential versus petrol diesel? So we have been maintaining some leg room between petrol diesel prices and CNG prices. As you could see, roughly 40%, 45% CNG is competitive compared to petrol and in the range of around 12% with respect to diesel. So that if we try and maintain that, that should be sufficient enough for us to drive volumes, okay.

22:37 Now in between or for a shorter intermittent period, if my gas cost increases, we may not change the prices so frequently because volatile prices is not good for people who want to go on adding their CNG fleets. So from that perspective, we may have sometimes up and down. But if for a permanent basis, if there is an increase in petrol diesel prices, definitely, we would like to recover the gas costs, which is also already up, and we have not recovered that fully in case of CNG. Okay. And second question is on the number of CNG buses that you have across all the GAs.

23:23 And what is the view on the number going forward? Because I think there will a lot of efforts from the government to electrify all these buses. And probably, can you also share the total volume which is being taken by these buses? Yes. So we have roughly 6,000 buses, which are flying, which includes both STU and private buses. The volume, if I say from the STU, right, STU is the state transport undertakings. So BST gives us about 90,000. Then we have MSRTC, which gives us about 34,000, 35,000 KGs per day. And then there are a couple of other transports, which are very minuscule.

24:12 So roughly, they put together give us about 4,000, 3,500 Kgs per day. And rest are the private buses. So in this segment, we now have a program, which is called the fleet program, which is now particularly aimed at this segment. So we have launched this program, and this has been kept in mind, keeping in view the threat looming threat of EV, which might, over a period of time, disturb some of our major consuming segments, which are taxi, cars and three wheelers. So this program, fleet program is already giving us a good traction.

25:03 So there are a lot of number of MOUs we have signed and quite a number of vehicles, which we have already signed and which would be on road in the next few months. So overall, I think the buses, the number that you've told, the Bhatish volume, CNG uptake will be around 0.1%, 4% of total CNG volume. Correct. Correct. 4% to 5%, yes. Okay. Yes. Thank you, sir. I'll get back. Just would like to add here, state transport undertakings may see some adoption of EV buses because of maybe they have funding available for such kind of initiative. Whereas in case of private operators, there may not be an incentive to get on to or adopt EV buses because the capital cost is much higher and the revenue remains similar. So unless there is availability of financing, etcetera, which is really difficult to get for a private operators because there is no life cycle available and you get financing at a very high rate. So you won't see much penetration in the case of the non STU operators for the buses. And that segment, we are able to penetrate and whatever is the loss on VST side mainly has been compensated through these private buses as well as MSRDC adopting more buses.

26:27 Okay. Thank you. The next question is from the line of Vivekanagaramal from Ambed Capital. Please go ahead. Yeah. Hi. Thanks for the opportunity. So my first question is the CapEx that you have done till now. And if you can break it across the base business, which is the three years and and the UEPL, that's one, and the guidance for FY twenty seven, that's number one. And the related question is, is it now much easier for you to increase your CapEx and serve markets that that perhaps the government is now pushing you to do so because of the imperative to shift from cylinders to P and G? That is question one. The second question is on the APM allocation.

27:26 So, I mean, as per PNGRV data, January to April, you had allocation of around 1.585 MMScMD. Could you help us with the number for 2Q? And also, now that the emergency provisions have been reversed, what is the allocation formula or mechanism for domestic both APM as well as New Well gas? If you could elaborate on that, that will be great. Thank you. As far as CapEx is concerned and with respect to PNG dry, you are right, certainly, we will be enhancing the capital expenditure because this is a time where it is giving a very good opportunity for MGL to lay more and more line when all the government agencies are supporting to create the infrastructure and tap all the potentials available, be it domestic PNG, be it industrial commercial.

28:27 So our focus is on this year to create more and more pipeline. And accordingly, our CapEx is going to go up. For Q1, we have already spent INR $3.50 crores, okay? And if you see my number of domestic connections added is almost 95,000 for first quarter, which was never the case in the history. This is probably the first quarter where we have connected so many domestic customer in one quarter. And in line with that, our CapEx could see an increase of almost INR 1,500 crores to INR 1,800 crores, subject to an availability of the manpower who does the ground level job. There is a demand of material by all CGDs and across India.

29:15 So there could be some bottlenecks. But as far as we are concerned, we will be making all endeavors wherever possible we will spend and put the infrastructure as fast as possible. And that is the so we are ready to spend almost in the range of 1,800 crore for FY 2026, 2027. I don't know whether if I missed any of your questions. My second one was on the APM allocation, the exact quantity in MMS CMD. And since the emergency measures on gas allocation have been lifted, what is the mechanism of allocating APM and new well gas and HPHT now to MGL and the CGG sector?

30:02 First of all, HPHT is not an allocation base where you have to bid and you have to buy. Only thing is CGD gets the priority. So whenever a long term contract is up for sale by the producers, HPHT is generally all CGDs try and take maximum. So it gets apportioned among all the CGDs. We already have, say, around 0.6 long term contracts, and we have consumed almost 0.2 or so through IGX. As far as APM and NWGN pool is concerned, roughly $2,000,000 through all these three sources have been coming to us in the last quarter. We are also not too sure about Q2, and it doesn't make sense me sharing that number for Q2.

30:53 So that is the way. And I already said around 30% of my total potential is catered to APM in the earlier question. Thank you. The next question is from the line of Sabri Hazarika from MGLobal. Please go ahead. Yes. Good afternoon, and congrats on good set of numbers. So against 95,000 domestic customers added, what has been the addition to the burning customer base during the quarter? I'm talking about all burning. These are all converted burning customers. So Some of them might not have occupied the flat. Okay.

31:42 So you may see that in maybe another month or two months' time, but all these are actively burning customer who have signed and taken up the gas. Okay. And full year, what is your expectation now in terms of addition? Our endeavor is to do maximum. So we may go, you know, from thousand number a day to more than that as well, 2,000, 3,000 also. But as I said, you know, this is currently... It is monsoon. The availability of plumbers, the availability of third party engineers to do inspection, availability of meter, availability of pipe, etcetera, it all depends on this. We can do eight to ten lakhs given if there are no bottlenecks in this year itself.

32:37 Okay. And any growth guidance, volume growth guidance for domestic PMG like you're saying for PMBO? Volume growth, see, if you see domestic is an area where the growth gets limited by the population and the household in that segment, right? As we have been saying in the earlier call and earlier all our meetings that we have a potential of around 3,800,000 to 4,000,000 households, okay. We were we are already with almost 3,300,000 households and we are selling gas to almost 2,300,000 consumers. So almost 50%, 60% of this connected but not consuming gas will be tapping because there is a pressure from government also.

33:24 And they have a threat of bottle getting stopped if a building has a gas connection and they have not taken. So for if this number conversion gets squeezed in next two to three years, definitely volume growth will be higher. Instead of five, six, it could go to seven, eight. But beyond that, it has to be through new geographies or new areas, okay? So I'm saying you can take a call on, if I reach out to all 3,800,000 or 4,000,000 households and taking their average per capita consumption, say, in the range of 0.35 to 0.4, that's the volume potential available in this segment. No. I'm talking about this year. This year, I mean, we are, like, at nine, 10% in q one itself.

34:12 So this year, say, I I I connect only five lakh. Then five lakh into at least, you know... Because these are the customers who are sitting on the fence, their consumption could be low. So even if you take point three, it should add 0.15 mmfcmd, if all of them start consuming gas. It will be average of the year because you are connecting them throughout the year. So at least 0.0607 kind of a addition is seen on point six five base. Got it, sir. Thank you so much for the explanation and all the best. Thank you. Thank you. The next question is from the line of Kartik Gada from multiple wealth. Please go ahead.

34:59 Yeah. Thank you for the opportunity. Am I audible? Yes. Yeah. So just again, on the realization for industrial and commercial segment, you mentioned INR 27 to INR 32 increase in per cubic meter terms. What would this be in percentage terms? Percentage to? Last year's realization. It could be ranging between, you know, 70% to 80%. Okay. And the alternate queues would have been either unavailable or even dearer. Right? That's why whatever was available was consumed.

35:44 How is that situation now in Q2? So Q2 until maybe first week of July, things were normalizing. Again, second week of July onwards, there are on sales on availability of liquid as well as probably gas, both. Okay. Alright. Okay. Yeah. That's it from my side. Thank you so much. Thank you. The next question is from the line of Ariel from Investments. Please go ahead. Hi, sir. Thank you for the opportunity. I just wanted to get an understanding on our non CDD initiatives. So, you know, over, let's say, the next three to five years, what do you expect your non CDD initiatives that the company has taken to materialize in terms of revenue and profit?

36:43 So, you know, non CGD, I think we have two, three initiatives. One is long haul LNG. So long haul LNG, we have two stations which are commissioned. And currently, only two stations and volumes are in the range of, say, five times a day. It is just breaking even and not added much, so to say, which you can see the difference between my stand alone and consolidated results, okay? As far as the battery initiative is concerned, it is right now on a hold except that the sales which we are importing from Korea and trying out on multiple two wheeler segment, so very nominal revenue which takes care of the salary of the people.

37:37 So there is nothing which is substantial, which has moved. Two, three reasons, because the time we evaluated and entered the segment, probably per kilowatt hour cost was in the range of sorry, revenue realization was $100 plus. But today, the realization has come down in the range of $70 $75 And there was some constraint in infusion of capital by the other party as well. So we have been in the process of restructuring the whole project. So that is about the international battery company. Coming to EV, where the business is manufacturing the three wheeler cargo vehicles and operating a logistics arm.

38:32 That is a startup. So they have not yet broken even, but the whole sector of three wheeler EV has seen challenges in terms of uptime of the vehicle, the pull available to maintain the vehicles and give revenue. So there is some amount of setback, but I think that is very usual when you have a new industry, new startup. So things are getting stabilized. So there also, it has not yet broken even or it is making profits. Another is our initiative on compressed biogas. So there, we have signed agreement and land allocation has happened through MCGM.

39:20 We will be very soon setting up a plant of around three fifty tonne municipal solid waste, which is only the first phase of our proposed CBG plant with MCCM on the MCCM land. So this is about the new initiatives. Okay. Second, I just wanted to ask him, you gave me some color about the commercial and industrial space which was there. But you said industrial realization was not so high. So I was just trying to understand if you could feel reiterate, but the industrial realization was not as high as the commercial realization. So both depends on the different fuel from which you switch the customer to natural gas.

40:11 In case of commercial, majority of the customers who are consuming bulk LPG moves to natural gas and bulk LPG movement from last quarter to this quarter was higher. Whereas the industrial side, more of the consumers are using LSHSFO, LDO, and there the price movement was not that high. And also the pricing with respect to large industrial customers, we give some discount to the alternate fuel prices, so they make recover their capital cost. So there is a difference in the pricing, difference in the fuel through which pricing linked to the alternate fuel. So obviously, there will be difference. So it can go other way around also. If the prices of LPG, bottle LPG comes down and LDOFO remains there, then you may see reverse movement also. But typically, I'm saying from Q4 to Q1, the realization increase in case of commercial was much higher or higher by at least 10% to 15% compared to industrial or little more also in some cases.

41:19 So we have new customers, Rygard area where we gave first three years committed discount of 10%, where more of industrial commercial basis there. So I was talking about the weighted average utilization considering the mix in different GAs, new and old customers. Thank you very much. Thank you. The next question is from the line of Vinit Banka from Nomura. Please go ahead. Thanks for the opportunity again, sir. Sir, on the CapEx, I think the number you said is INR 1,500 to INR 1,800 crore per year. If I see that the... Yeah. If I see the cash flow, the operating cash flow is around, I think, 1,100 crore. So will there be a net rate this year for funding the CapEx? We also have surplus on our balance sheet and we are prepared to raise debt because if my CBG plans are, we need money there as well. And we are a zero debt company, so it it we can always raise debt. Yeah. We are prepared to do that, yes.

42:24 Okay. And on gas pooling side, is it still continuing like it was in 1Q or do you have some relaxation from the government? No, discontinued from around second week of July because government came with a notification that now almost things are come to an end and arrangement and the notification which was giving priority for gas consumption of the domestically produced and otherwise also was removed around July 4 and after that gas was removed. So you are getting around 1.5 MMcmd of Henry Mgat which you have contracted with the other? That is unfortunate. We are not getting that much. The reason is the force majeure is already after that, within probably a week's time, again, S.

43:18 And Iran things started. Okay. And supplies are impacting and force majeure is applicable as far as import is concerned. So we have represented that pool should come pool gas mechanism should come back. But as of today, we are relying on Mahanagar without pool gas. In the absence of pool gas and India volume still not there, so are you possibly, funding this shortfall using spot LNG? Small amount of this was done because immediately you can't enter into a term contract. So yes, for maybe fifteen days to three weeks time, we we did buy spot.

44:06 And we have taken some steps to enter into slightly longer term contract so that cost can be contained with some good amount of threshold. So if things improve, we can always use both. But as I said earlier, I think this two, three months until Westchester crisis comes to some reasonable conclusion, this remains very volatile. I don't understand. When pool mechanism is not there and the restrictions are relaxed, then why we are not getting the full quota of contracted MGL gas? So as I said, no, immediately after that, The US Iran thing erupted and supplies are impacted. If supplies are not there and with the government circular, if that pool mechanism again back to square one and it is going back to the people pre West Asia crisis.

45:02 So it will take some time at the end of government to rethink and do or that's actually not in our hand, but we can only represent. That is what we have done. Okay. Thanks. Thank you. Thank you. The next question is from the line of from CLSA. Please go ahead. Thanks for taking my questions. So as things stand right now, can we say that, you know, the situation on availability as well as raw material availability that is gas, as well as maybe pricing is pretty similar to the June quarter for because everything's kind of come back in terms of the overall yes, I mean, overall crude prices are lower, but there will also be that three month generally, your pricing will be with a three month lag, right?

46:07 So if you see, I think West Asia crisis started somewhere end of February twenty eight. That's right. Then Last day of February the pool mechanism was put in place almost in the mid of March or something, correct? Now that means Q1 was not at all impacted because, yes, the prices went up maybe $12.5 to $13 But today, probably, pool mechanism removed, gas not available, situation is slightly worse compared to Q1, not equal. Your volumes have gone up. But your margin situation should be a bit better because you took a lot of the price hikes that you took. Yes. My hike in the first quarter was gradual.

46:55 And let's say, from February till now, I have taken INR 5 per kg increase, which is available for this full quarter. So that is definitely a positive side as you understand it very rightly. And just to from whatever I could from whatever is which has already been discussed, the Q o Q up move in margin, that largely comes from the fact that industrial and commercial did not see that quicker pass through and a bigger impact in the March quarter. But was one of is that one of the main reasons for the delta that we have seen, the Q o Q improvement in margins? Yes, you are right. Generally, don't do any pass through. We are building alternate fueling prices and so it's more driven by market. But that is why I always keep on saying that it is not right to compare quarter on quarter margin for at least this segment or even the company. I have created infrastructure for a long term and over long term, you will always make money. In the time you see Brent at a particular level and gas prices in the range of $12 to $14 you will always be in the money.

48:09 Comparing quarter on quarter and during such difficult time, it's very difficult for anybody to say how margins will fare. Your endeavor to get to, I think INR eight to nine margin, that target continues, right? So our endeavor remains and you will have to appreciate that Yes, volatility will be there. Yes, yes. And there are alternate fuels which are competing with us. So you can't within a range, you can always perform. But if the external factors completely go against the business model, then there will be some plus minus during a shorter period of time like quarter or a half year. Rajee, just one other thing that if from whatever behavior we have seen during this last few months where there were extremes, what kind of a discount the last few months or last few quarters do you think volumes start getting impacted if diesel discount to diesel falls to, say, below 15%?

49:19 Do you think that that's when volume growth starts getting impacted below 20%? What is the broad number and understanding that we have? Because see, if you see the volume gets impacted only growth basically. Not much. Well, volume growth may get impacted, volume assets may not get impacted because you have a base on which you are operating. Okay. So you may see a slowdown in the vehicle addition and the volume growth. But considering this is a temporary situation, we don't see that it should remain forever and you will have a very long term. So our endeavor should be, I maintain the stability of price and don't impact that people's psychology of adopting CNG vehicle.

50:05 So we will pass through this phase. It's not very difficult. You have seen that in last during COVID, during Ukraine invasion and now during this. So I don't see a challenge as such. Maybe at least for a balance sheet size of MGL and our financial strength of MGL, we are very confident that this will sail through. The next question is from the line of Indra Kumar Gupta from PR. Thank you for the opportunity, sir. I understand that you gave the guide I mean, gave a directional input on the volume not being very challenging volume not being challenging and challenges lies in the gas sourcing.

50:52 But last quarter, I think you indicated that the volume growth would be in double digits and this year, we may exceed a net of a Rs. 8. So does that remain maintained or is there any change considering the Q1 performance or what is the overall change in this? So I think last quarter, we said volume growth will be higher single digit or it may cross double digit. If CNG volume picks up beyond 8%, 9% and industrial commercial volume goes 12% to 14%, then it is possible to go beyond 10% also. But with the gas supply getting curtailed and if I have to restrict my supplies to 80%, though we may connect everybody, we will sign lower DCQ to start with so that customer is connected, but gas consumption can be always scaled up once the situation is out and supplies are restored properly.

51:52 So comparing for this quarter or even for next quarter, it's anybody's guess how things will move. But when I say INR 8, nine, EBITDA, it is over a longer period of time and most of these factors remaining under the normal circumstances. Today, probably circumstances are such that nobody is able to predict what could be the spot and what could be the gas availability also. Okay, sir. As I said, our business, our composition of gas sale is more or less alternate fuel linked as well as CNG and domestic. It is balancing out what we have seen in this quarter. Sure, sir. Thank you. Thank you.

52:42 Thank you. The next question is from the line of Jayesh Shah, an individual investor. Please go ahead. Yeah. Hi. Am I audible? Yes, sir. Yes. Thanks. Thanks. Sir. Thanks for taking the question. I just had a couple of questions, you know, some of the questions that I had have been answered. But let's assume that the things normalize, hormone normalizes, you know, price broadly, crude versus natural natural gas, you know, the spring normalizes. What is the kind of volume growth? Because looking at 'twenty eight, what is the kind of volume growth that I can really look at on a sustainable basis, maybe 'twenty eight and 'twenty nine? So that was question number one.

53:28 Any range that you would hazard to guide us to? Range for growth? Range for volume growth. It it it should be in the range of eight to 9%. 8% to 9%? Yes. That's that's correct. Right. And just a second question, you mentioned that that the CapEx, which should be done this year approx. And so does that have any impact on the dividend payout? We have been broadly around the 30 rupees per share has been paid out as dividend. And any... I mean, thought around the meeting that CapEx through internal accruals and not there, Or what's the management thought process on that?

54:18 Dividend outflow certainly will not have any impact. We have been always saying that we will maintain the dividend and gradually increase it, okay? So the current level of dividend will be maintained despite higher CapEx. Okay? And as I said, our balance sheet strength is very good if required. See, when you look at CGD as an industry, if I was to cover my potential in the geographical area which I'm working on, I would have spent, say, a thousand crore every three to five... Every year up to three, four years to tap that potential. What am I doing is I'm only pre pulling that CapEx. So if I spend now a little more, maybe in the subsequent years, I'll have to spend less because I'm trying to seize the opportunity which is today available due to the pressure on LPG and the very good opportunity which has come to the industry. So it is on that overall CapEx for the project to tap the potential in the geography is going up. In fact, has reduced because my RI judges have come down, my speed of executing project becomes faster, it saves a lot of overheads.

55:23 So it is only pre pawning the CapEx. We are never saying that whatever number of stations, kilometers of pipeline required to tap the potential, I will be doing a little earlier. That's all. So if we intermittently, if I have to borrow, we we can always borrow. No. Absolutely. I mean, you know, given the balance sheet strength and almost a debt free kind of a, you know, balance sheet, Mortgage is never going to be a challenge for the company. It's just that as you like to put it, we are prefunding CapEx and Yes. Maybe, you know, there can be cash flow issues, which would be met... Cash flow or towards payments, which will be by borrowings. So that's why So we don't see any cash flow issues. Cash flow will be managed. Nothing to worry about cash flow. Okay.

56:13 Okay. Thanks so much, sir. Absolutely. The last question is from the line of Aryan from Equitas Investments. Please go ahead. Thank you for taking the question, Aryan. Since I just wanted to understand, you know, you explained to me about the non senior initiatives, but I just wanted to add what is the management focus on this? So are we focusing the... Are we putting heavy focus on the PV initiatives that we have, or are we just saying that, you know, this is not our main domain expertise to... We will invest more of our time and resources in the CVD business. So what is the management philosophy then? So it's a smaller investment considering the size of MGL.

57:02 And our objective was to mainly understand this segment. Okay. Now and as you are aware, any new initiative and startups will have this kind of a performance in the initial year. So even if we so so it's it's going to help us in understanding for a long term what all things can be put in our fold, considering if twelve, fifteen years down the line, really EV vehicle picks up, at least we understand the market very well. So you may not see very sizable amount of management time and money being put in this segment for at least next three to five years, Unless we have a confidence and we know now this is a time when it will start running, we'll definitely scale up at that time.

57:54 Understood, sir. And just the last question. So you did say that you expect volume growth coming from the new GA. But are we planning to wait for any new years when the tenders do come out, or is our philosophy saying that we will continue to focus on the existing GA that we have? See, our existing GA, GA 1, GA 23 also has a lot of potential yet. And things are, you know, infrastructure is developing. The... There is a good amount of growth available in GA 2 as well as GA 3. And the UVPL SBUs, we have been saying that it has a potential almost 1.2 MMS CMD. We are currently serving little more than 0.3. So it can still go fourfold. We are increasing there more than 30%.

58:40 Okay. And if required, we are open and we may look for any opportunity of acquisition as well. Because when the time is coming where APM is substantially coming down. So there are new entrants who may have managing issues. There are new non gas operators have also entered. So if we are able to use our ability of managing gas and acquire any companies, we are open to that as well. So growth can come from inorganic mode also and bidding is actually not open because most of the geographies are already bidded out by PNG RV. Understood, sir. Thank you very much. All the best. You. Ladies and gentlemen, we take that as the last question of the day. I would now like to hand the conference over to the management for the closing comments.

59:35 Thank you so much, everybody, for connecting on the call today. I'm happy to address any questions that you have offline. Thank you so much. Thank you. Thank you so much. On behalf of Prabhupada Ladar India Private Limited, that concludes this conference. Thank you for joining us, and you may now disconnect your