Mahanagar Gas (NSE:MGL) Q2 2027 Earnings Call

0:00 Ladies and gentlemen, good day, and welcome to Mahanagar Gas q two FY twenty seven earnings conference call hosted by Philip Capital India Private Limited. As a reminder, all possible lines will be in the listen only mode, and there'll be an opportunity for you to ask questions after the presentation concludes. Please note that this conference is being recorded. I now hand the conference over to mister Nitin Tiwari from Philip Capital India Private Limited. Thank you, and over to you, sir. Thank you, Nitesh. Good day, ladies and gentlemen. Best wishes to everyone in advance for Diwali.

0:46 On behalf of Philip Capital India Limited, I welcome everyone to Mahanagar Gas Limited's Second Quarter FY twenty twenty seven Earnings Call. Today, we have the pleasure of having with us the senior management of MGL led by Mr. Pravir Kumar Srivastava, Managing Director Mr. Ajay Sinha, Deputy Managing Director and 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.

1:34 With that said, I will now hand over the call to the management. Over to you, sir. Thank you. A very good day and best wishes in advance for the Diwali and welcome to the earning calls of Mahanagar Gas Limited for the second quarter of the financial year 2026 and 2027. I would like to thank all of you for attending our earnings call today. The ongoing Cretaceousia conflict and uncertainty surrounding the state of Hormuz continue to affect global LNG availability and prices. India's natural gas supply situation is gradually improving though with the LNG imports showing signs of recovery. However, 100% of our domestic PNG, DPNG requirement and the major portion of our CNG requirements are sourced from domestically produced natural gas ensuring uninterrupted supply to our domestic PNG customers and continued reliable supply to our CNG consumers.

2:38 Gas supply to industrial and commercial customers are partly curtailed. Gas prices may remain volatile in the near term, but are expected to gradually decline as geopolitical tensions ease. We continue to closely monitor the situation and remain committed to maintain uninterrupted gas supply to our customers. Currently, are into P and G Drive 3.0 that builds on the achievements of P and G Drive 2.0 focusing on accelerating domestic P and G connections, activating government connections, improving infrastructure utilization and expanding P and G adoption through strong stakeholder coordination. MGL continues to create CGT infrastructure across its business segments in the licensed area.

3:28 During the quarter, 501 DPNG conversions were achieved, taking the cumulative DPNG conversions to 2,240,000 as on 09/30/2026. We have laid 65 kilometers of steel and PE pipeline taking the total length to over 8,500 kilometers. We added nine CNG stations during this quarter and with this we have five twenty eight stations as on 09/30/2026. We added two forty eight industrial and commercial customers during this quarter. As on 09/30/2026, we have 6,409 industrial and commercial customers.

4:17 During the quarter, there is an addition of 29,524 CNG vehicles and now we have more than 1,340,000 CNG vehicles registered in our geographies as of 09/30/2026. Coming to MGL's operations compared to the corresponding quarter of the last year, overall sales volumes has increased by 6.49% and that is from 4.59 to 4,890,000 standard cubic meter per day. Sales volume of CNG has increased by 9.14 from 3.26 mmHg to 3.55 mmHg. Sales volume for domestic DPNG has increased by 9.84% from 0.58 mmScmd to 0.64 mmScmd.

5:09 In case of industrial and commercial, mainly due to the supply restrictions and higher Brent, there is a decrease in sales volume of 7.4 from 0.76 mmfcmd to 0.70 mmfcmd. During the quarter, we achieved overall sales volume of 4.892 mmfcmd as against 4.766 mmcmd in the previous quarter, which is an increase of 2.63%. Sales volume in case of CNG has increased from 3.496 mmcmd to 3.552 MMScMD, which is an increase of 1.63%.

5:59 Sales for domestic DPNG have increased from 0.623 MMScMD to 0.639 MMScMD, which is an increase of 2.62%. In case of industrial and commercial sales volume achieved is 0.70 MMScMD as compared to 0.648 MMScMD in the previous quarter, an increase of 8.07%. EBITDA from operations for this quarter is Rs. $2.87 crores as compared to previous quarter's EBITDA of Rs. $3.43 crores. High EBITDA H1 EBITDA is INR630 crores compared to previous year H1 EBITDA of INR839 crores.

6:48 Net profit after tax for the quarter is INR137 crores as compared to previous quarter net profit after tax of INR194 crores. Net profit after tax is INR331 crores for the H1 as compared to INR513 crores in the H1 of previous year. With this, I conclude and would like now like to open the floor for the questions. Thank you very much for your patience listening and once again wish you a very, very happy Diwali. Thank you. Thank you very much. We will now begin the question and answer session. Anyone who wishes to ask a question may press star and one on the touch tone telephone.

7:34 If you wish to remove yourself from the question queue, you may press star and 2. Participants are requested to use handsets while asking a question. Ladies and gentlemen, we will wait for a moment while the question is assembled. Your first question from the line of mister Praful Singh from ICIC Securities. Sir, please go ahead. Mister, your line is unmuted. Please ask your question. Hello. Am I audible? Yes, sir. You're audible. Yes. Yes. Yeah. Sir, very happy, Diwali, to all of you in advance, first of all. Two or three questions from my side. Firstly, as far as the sourcing is concerned, sir, can can we get a sense of how much was spot LNG as a percentage of our total volume sourcing for this quarter?

8:31 And what was sort of the blended price of the same in this quarter? Our active company level volume, if you compare spot was around 4%. When I'm saying spot, I'm referring to other than HPHT spot, which comes through IGX. If we include spot through IGX, HPHT also, then it was around 11%. Okay. So 11% including exchange bought volumes, but pure spot LNG per se was only about four percent for the quarter. Yes. Yes. And that too, I'm saying with respect to CNG volumes. This is 4% is with respect to CNG volume. If you take at company level, then it is hardly 2.5% of the overall company volumes. Pure spot or LNG.

9:20 Okay. And, sir, what was sort of roughly the range of the the pricing that we saw in the quarter for LNG? LNG was hovering, you know, 22, $23. Right. So, sir, just just a... Got it. So just as a follow-up, sir, we have seen a sharp escalation in LNG prices, particularly in the spot market in q three. So how are we sort of looking at it now? And are we planning any further pricing actions to protect margins? Anything being looked at? See, we would have even completely avoided spot during q two also. But I don't know whether you are aware, there was a circular on HPHT gas allocation formula.

10:09 This was changed in favor of the larger CGD entities, okay. But probably because of the sudden change, the earlier formula, which was benefiting all entities equally when the HPHT used to come up for bidding. When it was removed, a sudden vacuum happened at smaller entities probably And some benefit accrued to larger entities because of higher HPHT availability through IGX mainly. So then I think there was a reconsideration of that formula and formula remains same, but it has been phased out over up to June. So let's say, next two months, November, December, it will be 25%, then next three months, will be 50%, then another 2575% and then 100% from July. So with this phasing out, we see that good amount of HPHT allocation will be available to us.

11:09 Now when suddenly some amount of HPHT was removed and this was applied, we ended up buying some spot. So having said that, some increase will happen on account of HPHT. Other than that, we have already tied up new term gas with some tweaking of formula for this shorter time of turmoil and then matching with the long term contracts, which is in the range of around 40,000 MMBtu. So that will help us managing the cost. Of course, depending on how the imported LNG supply remains in India, there has been plus and minuses on the actual supply in spite of having a term contracts with all the suppliers.

11:57 So that will determine whether cost remains or we may have to again fall back on spot for interim period. So we are doing a fine tune management of the cost by mostly ensuring that term contracts are available and dependence on spot is minimum. Yeah. Understood. Understood. And compared to that is what you can see our gas cost also. Yes. Absolutely. No. Fair enough, sir. The second question was about in the industrial and commercial segment. Can we get a sense, sir, at least of blended pricing that was there for the industrial and commercial? I know that there is differential pricing for different segments.

12:43 But just a rough cut idea, what was it for industrial and what was it for commercial in this quarter? If you can get a sense. Industrial commercial prices have been ranging anywhere between 65 to 100, sometimes more than 100 also. Because this 65 to 100, you said? 65 to 100? Yes. Depending on the type of consumer, depending on the combination of fuel to which we are billing and depending on the Brent in that month because the pricing is reset every month depending on the contract with individual customers. So I'm talking about this is the range. Got it. So one last question, if I may. On the overall volume guidance, if you can kindly help us, are we what kind of volume growth guidance is now there for FY '27 and '28?

13:33 And if you can break up the growth that was seen in in the the MMR region and for the outside areas for this quarter? So I'll talk about overall at company level. If you see compared to last half this half, we have, at a company level, grown by around 6.75%, okay? Now that could have been much better than 6.75%. Why I'm saying so? Because be it CNG, domestic and even small commercial customers, all CNG and domestic, we have grown by 9.5% almost, okay? In case of small commercial, we have grown by almost 12%. The overall dip you see is because of cut in the industrial supplies, mainly because of the restriction of curtailment of these supplies because of the West Asia crisis.

14:26 So once gas availability and pricing, to a certain extent, pricing also impacts the offtake by the existing customers. Sure. The signed contracts and the normal level consumption during normal if restores, our growth will be definitely more than 8% to 9% for both the years. That is what the trend is being currently. Understood, sir. Thank you so much. I'll come back if I have more questions. Best. Sure. Thank you. Thank you. Thank you. Reminder to all the participants that you may press star when to ask a question. Reminder to all the participants that you may press star and one to ask a question. We have next question from the line of from Axis Capital. Please go ahead.

15:15 Hi, sir. Am I audible? Yes. I just wanted to know clarification. So when, like, one year back when UEPL was amalgamated, so did the MGL had to pay any penalty with respect to the nonachievement of MWP, especially with respect to UEPL targets on the PNG and any other aspects in the state of our layout? Yeah. So, you know, while the control is transferred by PNGRB, at that time, they review the MWP and the actual achievement. So at the time of transferring those GA authorization from Unison to MGL, certainly, PNGRB had asked for the shortfall of MWP as a this. However, while signing the JV agreement with Unizen, in the agreement, we had covered recovery of the same through the erstwhile promoters partly and some small portion was born by us post takeover.

16:27 And might be that portion has been recovered, sir, like from the promoters? No, no. The manner in which the contract was structured with the Swell promoters was some understanding was there. So up to that level, they have won. Beyond that, a nominal amount was won by the company only, but not out of the price which was committed to the promoters. It went to ultimately, it went from the Unison accounts only. Understood, sir. Yes. Because there was a cash also in the balance sheet, right? It was an operating company. And, sir, secondly, on this HPHT norm. So, sir, can you give a a detailed sense of what was done? What is the rule which is currently in place? And in volume terms, if how much volumes are you expecting in, let's say, next few quarters and then next year, especially from from the HPHT allocation chain now?

17:34 So just to reiterate, earlier HPHT was getting allocated between all the legal entities who are bidding for the gap equally, irrespective of how much is there consumed for priority segments, CNG and domestic. Okay? The new formula is allocation will happen in the ratio of whatever is your previous consumption for CNG and domestic. So obviously, I'm selling CNG of $3,500,000 and another $700,000 of domestic, dollars 4,200,000 and somebody else is selling $2,000,000 say, I will get double than what he is getting. This is the current formula, okay? With this current formula, if you do a sudden change, then there will be slightly hiccups for people who have reduction in the HPHT to tie up for another gas because their times are slightly difficult.

18:25 Formula has the formula remains the same, but formula has been phased out over next seven, eight months. So for the first two months, that is November and December, the new formula will be applied for 25% of the quantity and 75% will be allocated based on the legal entity, number of legal entities. Then for January, February and March, it will be fifty-fifty. 50% based on the proportion of consumption, 50% based on the number of entities bidding for the gas. And then April, May, June, it will be 75% based on proportion of gas consumption and 25% will be based on the number of legal entity. From July onwards, it will be 100% on the new formula.

19:11 That is the way setup is. Now coming to what is my allocation. If you consider legal entity, it would have dependent on how many entities are bid for. But usually, most of the entities are bidding. So even if there are 17, 18 entities, you are getting in the range of 4%, 4.5% to 5%, which in absolute terms was in the range of 5,000 to 6,000 MMBtu per day. Now with the change of the formula, if the full order is implemented, I should if the flow of monthly HPST through IGS remains at similar level, I should get at three, 3.5x around 16,000 to 18,000 MMBtu, most likely.

19:57 Okay? Between... So thanks a lot. Yeah. Sorry, sir. Yeah. In between, because of this change and the step up, I think initially instead of 5,000, 6,000, I'll start getting around 7,000 to 8,000. And then every this two months, three months, another 2,500 will be added, assuming that the quantity which is coming up for spot sale through IGF remains in the same range, okay? Another thing to be noted here is probably for the either the term contracts may not come during this period or term contract, if comes, will be divided into two portions, the time up to June 27 and beyond June, that means July onwards. So that the formula is added by the suppliers who are producing HPHT and coming up for breeding.

20:47 Sir, that was quite full. Thank you for the update. Thank you. We have next question from the line of Yogesh Patit from. Please go ahead. Thanks for an opportunity, sir, and couple of questions from my side. Can we get a gaps details in terms of the MMS, CMD? Much was APM, NWG, HPHT, Henry Hub, during the quarter? And how much it has been in the month of November now? You want November? You you that way know what is my total sales. Okay. Yeah. So even if we discuss percentage, I think it should be more than sufficient.

21:34 Yes. Yes, sir. No. Yes. So first of all, domestic P and G is 100% PM. Okay? Industrial commercial, 100% through RLNG. Term contracts mostly, mainly HH and some small quantity through Brent link contract, okay? When it comes to CNG, you can broadly divide 60% as domestically produced gas and 40% out of term, which is maximum term gas and 4% is around spot gas. Within that 60%, I'm saying domestically produced, APM and NWG is 40% and HPHT is around 40%, which include HPHT through term as well as HPHT through IGX at the current level. So which is going to increase in the month of November and going forward based on this new formula, okay?

22:29 Okay. So next question, like, HPHT allocation policy, do we expect the government will also frame the NWG allocation allocation policy in which the CNG transport will get a priority? Any discussion? Any updates on that side? We have been always requesting that or, you know, representing at their forum or the... At individual level whenever there is a chance to do that. But no clue on whether anything will be implemented on that front. Okay. Do recognize that there is not much difference between NWG price under current scenario and any other RLNG or any other term contract. So there is a need to do something on NWG. So sir, a question on the unit EBITDA margin side. You generally guide the unit EBITDA margins what will be for this year, current year FY 'twenty seven and the next year FY 'twenty eight.

23:28 And based on the current gas sourcing and the gas prices... Gas sourcing mix and the gas prices, how much CNG price hike is required to maintain a minimum seven rupees per HCM kind of unit EBITDA in FY twenty seven? If you look at, I think, my current quarter margin also, it is slightly lower than INR 7, right, around INR 6.77. So we are not very far. You can guess how much increase I should do considering tax at the rate of 25%. Even if I do INR 1.5, if everything remains same, 7 rupees is achievable.

24:16 Okay. And, sir, any guidance for FY twenty seven EBITDA margins and FY twenty eight EBITDA margins? I think it's a very difficult question to answer under current scenario, where a lot of factors are so much volatile that nobody is able to predict. Say, I might have tied up in terms of whatever I can do, tying up term contracts. Or I can undertake some amount of hedging also, which we have done partly through changing the contract from index based to fixed contract. So some part of index, even if it goes a little higher in winters, we are protected partly. But on the factor of how much will be the supply of our LNG and what will be cut on the signed term contracts, we don't have any control. So I think we are also evaluating situation every fortnight, every month and taking a call on how should we move. Our endeavor is always to maintain the reasonable profitability under the scenario with an eye on it should not impact consumers adversely, so that the momentum of CNG vehicle addition on CNG gets impacted.

25:34 Though if you look at current petrol diesel prices, with respect to petrol, we are almost offering 45% discount, which I am saying probably the blended petrol, ethanol blended petrol. So the discount in actual terms could be much more than this, if you consider pure petrol. With respect to even diesel, I'm offering at the current level 10% to 11% discount, okay. So I think with this, I can't really give you a number on what will happen, but our endeavor is to maintain whatever we have been giving the guidance. Yeah. Okay. Lastly, sir, any particular reason why the operating expenses are much higher during the quarter? Yeah. Yeah. Any one off item?

26:20 There are two, three reasons. You can see that, you know, volumes have gone up, but margins might have remained same or gone down slightly because of current scenario. The moment situation improves, margins will go up. Now when I say volumes go up, there are a lot of expenses, which are linked to volume directly, like power and fuel, LCV transportation, dispensing charges, etcetera. Okay. If I'm not able to recover those, those will recover once the things normalize and the margin should come to normalcy. Other than that, this quarter, we had the generally, July is the month where you get promotions increment, etcetera. And in our case, we do have a long term pay correction for all the employees, which was implemented in the quarter. And though it was provided, but the actual valuation impact because of the interest rate changes in the market and the salary revision has an impact of around INR10 crores, INR12 crores, which is one time in this quarter, likely to go away next maybe in the subsequent quarter, it will not be so high.

27:26 Okay. Thanks. Thanks a lot, sir, and all the best. Thank you, sir. Thank you. Thank you. We have next question from the line of from Equitas Investment. Please go ahead. Hi, sir. So I just had one question. And it was that the PNG commercial and industrial volumes, they have fallen about 7% in both the quarters given the current war situation. So what is the outlook for volume growth and margins in this segment? See, as I said earlier in the beginning of the call itself, that commercial volumes have actually grown when I'm saying commercial small category restaurants, who are otherwise consuming LPG bottles, 19 kilograms LPG bottle, there, the volumes have gone up actually by around 9%, 10%, okay?

28:21 Whereas it is industrial volume where there is a cut. Two reasons, the supply was also restricted in the first quarter. And second quarter also, RNG supplies were restricted in the range of 70%. So that has impacted this and Brent being so high, And our pricing formula is linked to the alternate fuel pricing, okay. So if the prices go up slightly, people become cautious and they consume less. And as such, there was a cut from our side also because of the restriction in the first quarter. Predominantly, customer base with the DCQ they have signed, the daily optic they have signed has not gone down. It has increased. Okay? So the moment situation comes to normalcy, this volume will bounce back by more than double digit.

29:07 Okay. Okay. Thank you, sir. And margin is dependent on the gas cost and the Brent link realization. Okay? Yes. Yes. Thank you. We have next question from the line of Vartharajan from Antique Limited. Please go ahead. Thank you for the opportunity, sir. You were given the APM plus New World Gas. If you can give a split between APM and New World Gas as well. And secondly, like, you know, in terms of the incentivization of commercial vehicles, where do we stand and the program is still on and what has been the expense there. And in terms of run rate, we see roundabout 600 to 700 vehicles a month, which has gone up from 300,400, which is a good thing. But still, what we see is that why is it that it has not expanded into the diesel or like other vehicles available, that proportion is still fairly high. Why are we not making a bigger dent on that front?

30:06 So to your first question, my answer is, it is for APM and NWG available for CNGs roughly fifty-fifty. Both put together, if it is 40, it is fifty-fifty divided, okay? Sure. Coming to marketing scheme, yes, we have continued with the large size commercial vehicle, the schemes. And almost there is a registration and commitment for more than 800 vehicles, okay? But we actually dispose only when the vehicle is delivered and it starts consuming gas on our gas stations, okay? So by now, out of those 800, roughly 110 vehicles have been delivered and expenses incurred in the range of if you consider roughly INR 3.5 lakh is per vehicle, around INR 3.5 crores to INR 4 crores expense has been incurred in this quarter, okay? So balance around INR $708,100 and if any more new registration comes, that will be addition. This I'm talking excluding the type of vehicle like Tata Smooth and those small vehicles, which are running and getting added on the fleet without any scheme.

31:15 These are larger fleet size and larger vehicles, about 10 tons. So if I have to understand it right, so you've discontinued on the LCVs, you are moving more towards the larger ones. Is that the way it is? So LCVs, are not incentivizing as of now. Yeah. The model which are anyway selling on CNG and have a very good market share, we did not sponsor them, right? Is the higher segment where we want penetration more. Sure. That is useful. Thank you. Thank you. We have next question from the line of Vinit Banca from Nomura.

32:01 Please go ahead. Hi, sir. Thanks for the opportunity. Sir, on the I and C margin for 2Q, was there a decline on a quarter on quarter basis because your gas costs have gone up and the alternate fuel prices, which is Brent and propane was down on an average basis quarter on quarter? Yes, yes. If you look at LPG cylinder, the prices went up by almost more than 25% compared to the last quarter. But if you look at LDO and AFO, the prices went down by around 6%. So in the similar range, my prices have also moved. So in case of commercial, there was definitely an upside in that percentage. And in case of industrial and the large customers, there was a reduction compared to the previous quarter Q1, But it still remains higher than the same quarter last year, okay, or maybe q four as well.

32:54 So you said saying margins are higher or prices are higher? I think margins, right? Prices are anyway higher, which is understandable. No. No. See, I bill linked to... Let's say, some customers bill to 19 kg LPG cylinder. Okay? Compared to q one, q two LPG cylinder prices have gone up by more than 85%, which is publicly available data. So my realization also to such customer has gone up by 25. Okay? Okay. Whereas customers whom I'm billing either on FO, LDO or combination of FO and LDO, these both the fuels have gone down by from the range of around 6% to 15%. And such also compared to Q1, in case of large customer, yes, there is a reduction on the sales realization.

33:45 Okay. And margins will be largely similar or there'll be slight cut? Think Some because gas that I have used. More or less, I think, it has remained slightly better or equal to previous quarter, not much change in the gas cost. Okay. And sir, second question is on CapEx. So I think first half CapEx is around INR $6.43 crore. And I think earlier you gave a guidance of INR 1,500 crores to 1,800 crores. So will that guidance still hold? Because the first half run rate has been slightly, I think, lower than what you would have wanted. Generally, first half run rate is always lower. Reason is post mid of May till October, Monsoon Susan, you don't get permissions to lay pipeline, okay? Our actual starts picking up from October onwards only. So you will see we still maintain that run rate of INR 1,500 crores to INR 1,800 crores. However, I have been earlier also saying and adding there the wish and ambition of the company is to do more and more CapEx and capture the market.

34:50 However, there could be a lot of impediments in terms of availability of manpower, material, etcetera, etcetera, because you can't scale up operations and get the manpower at one shot, though you may make a lot of effort because most of the CGDs are doing the similar thing. So segment may be under pressure for same material, same labor skills, etcetera. Our endeavor is to do that, and we still maintain. It should be in the range of INR 1,500 crore plus. Okay. Sir, and because of this high CapEx run rate, I think for at least next couple of years, so FCF will be negative. So how do you plan to Free fund this cash flow? Free cash flow will be? Okay. Negative for yeah. You mean cash flow generated out of business and CapEx?

35:40 Yes, sir. Yes. Operating cash flow minus CapEx, that will be negative for, I think, 'twenty seven and FY 'twenty eight. Be negative by INR $203,100 crores. You are right. So are you going to raise some debt, I think, because on the balance sheet, I mean, right now, there is no debt or you will be liquidating mutual funds? Cannot be warranted. Debt cannot be warranted. Okay. My no, some part gets funded through the customer deposit as well, okay. So debt cannot get warranted as such. I have still surplus of almost INR 1,000 crore. And my cash inflow from operations should be in the range of, you know, more than thousand crore, thousand to $121,200 crore. Okay. Okay, sir. Got it. Thank you.

36:29 Thank you. We have next question from the line of Mahanagarashuri from Morgan Stanley. Please go ahead. So thank you for the call. Just one question around your I n c customers. Would you have a bit of a breakup in terms of what percentage of your customers are now on fuel oil? What percentage is linked to LPG bottles? And how are you thinking about the strategy around pricing for these customers going forward considering the growth and now the supply constraint that you see? See, for a number of customers, I don't have a bifurcation that way. Okay. But majority is small customer, commercial customers, but their volumes are lower. So in terms of volume, if you Do have a volume price percentage?

37:17 Volume wise, it could be 22 to balance is large customer, 22 is smaller customer and balance is industrial larger customer. And as far as pricing is concerned, I think our strategy is very simple alternate fuel based pricing. There is no change as of now. Okay. So no change there at all. So for these 80% of the customers, you will be kind of doing an alternative fuel based pricing? 100% of the I and C customers. Why 80%? I was thinking that 20% of the loans... Also, is formula linked. Every month formula prices reset based on the LPG bottle LPG price.

38:05 Okay. And it is not that some customers are buying 100% linked to FO and LDO. There is a combination also in the pricing. There's a part of the price is linked to LDO, part is linked to FO. Those kind of customers are also there. Okay. Very clear. Thank you. Yeah. Thank you. Reminder to all the participants that you may press star and one to ask a question. We have next question from the line of from Securities Private Limited. Please go ahead. Hello. Am I audible? Yes, madam. Yeah. So, sir, given the current scenario, can you elaborate a bit on the long term gas sourcing strategy and the expected sourcing mix over the next two, three years maybe?

38:55 And more about the 40,000 MMBT, which you said in your opening remarks that you have signed, the clarity on the counterparty or the tenure or other terms or the supply has started already. So that is kind of our LNG, which I understand is the long term RLNG. So whether it is Brent linked or Henry Hub linked or anything on that? I think on the counterparty, we don't share the data. Okay. But it is both. It is smaller quantity of Brent and higher quantity linked to Henry Hub. And on the strategy, generally, sign small tranches of contract as in when my sales volume base stabilizes, okay, and only by spot for peaking requirement.

39:46 And during current period, we have been tying up more term LNG more than our requirement because there is a supply restriction also in the range of 70%, sometimes 80%. But majority of these contracts have a threshold for take or pay. So generally, if there is a take or pay threshold, if I'm able to minimum consume that based on my requirement, then I'm able to leverage better if there is a change in the trend compared to, say, spot and the term prices. So we should have leverage in our hand to switch to any of these depending on the prices, okay? So currently, whatever term contracts we are signing, they are in the similar line as the old contracts, but there is a marginal tweaking in the formula for this difficult period when availability of gas and the prices are because of the supply constraint going up.

40:48 Okay, sir. So this volume actually has started flowing in, that 40,000 which you said? Signed is already flowing in. Yes. Yeah. Okay. Sir, my second question will be on if you have any, like, your internal, like, something like targeted discount versus the petrol and diesel prices, and how much pricing headroom does the company has actually against these fuels? Because at the end of the day, depends on the alternate fuel. So I think in the earlier question also, said that compared to petrol today, are almost at 45% discount. And compared to diesel, around 10%, 11% discount is there. And that has been for a very long time, maybe with some 5% movement here and there, depending on when was the petrol diesel prices get revised and when we have done the price change.

41:40 Okay. Okay. Thank you. Wishing you a very happy Diwali. Thank you so much. Same same thing. Wish you a happy Diwali. Thank you. Reminder to all the participants that you press star and one to ask a question. We have next question from the line of from Axis Capital. Please go ahead. Yes. So, sir, can you give a total CNG compression charges for FY twenty six or if possible for 2Q FY twenty seven? Rupees per SEM or absolute number would work. Could you repeat your question, please? Sir, CNG compression charges. Compression charges? Yes. There is nothing called compression charges as of now as far as regulation is concerned.

42:29 But yes, small amount of quantity, if suppose I have a facility of CGS in my GA and any adjacent GA does not have CGS in their area, then we do some amount of gas receiving on behalf of those other CGT entities. But those are very, very miniscule volumes. It does not impact, you know, a company with 10,000 crore turnover. Got it. As are no Thank further questions from the participants, I now hand the conference over to management for closing comments.

43:16 Okay. I think so. Yes. Thank you very much, Nitin, from Philips, and wish you all a very happy Deepavali. The results have been better, we feel, than the market expectation. We are growing at a rate of almost 9% to 10% in terms of sales volume and we hope we will maintain the same in the current year also and coming financial year also. So thank you once again and wish you once again a very happy Deepavali. Thank you. Thank you. Thank you. Thank you, Deepak. Participants on behalf of Philips Capital India Private Limited, that concludes this conference. Thank you for joining us. You may now disconnect your lines. Thank you.