Gujarat Gas Ltd
NSE:GUJGASLTD
Decide at what price you'd be comfortable buying and we'll help you stay ready.
|
Johnson & Johnson
NYSE:JNJ
|
US |
|
Berkshire Hathaway Inc
NYSE:BRK.A
|
US |
|
Bank of America Corp
NYSE:BAC
|
US |
|
Mastercard Inc
NYSE:MA
|
US |
|
UnitedHealth Group Inc
NYSE:UNH
|
US |
|
Exxon Mobil Corp
NYSE:XOM
|
US |
|
Pfizer Inc
NYSE:PFE
|
US |
|
Nike Inc
NYSE:NKE
|
US |
|
Visa Inc
NYSE:V
|
US |
|
Alibaba Group Holding Ltd
NYSE:BABA
|
CN |
|
JPMorgan Chase & Co
NYSE:JPM
|
US |
|
Coca-Cola Co
NYSE:KO
|
US |
|
Verizon Communications Inc
NYSE:VZ
|
US |
|
Chevron Corp
NYSE:CVX
|
US |
|
Walt Disney Co
NYSE:DIS
|
US |
|
PayPal Holdings Inc
NASDAQ:PYPL
|
US |
Q1-2026 Earnings Call
AI Summary
Earnings Call on Aug 6, 2025
Revenue Decline: Gujarat Gas reported Q1 FY26 revenue from operations of INR 4,065 crores, down from INR 4,615 crores in the same quarter last year.
Stable Profitability: Profit after tax for Q1 FY26 was INR 327 crores, nearly flat compared to INR 330 crores last year.
EBITDA Margins: EBITDA stood at INR 579 crores with a margin of 7.7%, up from 5.75% in the previous quarter. Full-year guidance is set at INR 4.5 to 5.5 per SCM.
Volume Pressure in Industrial Segment: Industrial gas volumes fell, particularly in Morbi, as customers switched to propane due to price differences. Morbi volumes dropped from 2.87 to 2.51 MMSCMD QoQ.
CNG Growth: CNG sales volumes rose 12% YoY, with a 15% increase in the CNG vehicle base. New stations are being added to support this momentum.
Propane Business Launch: The company is entering propane distribution, targeting 25% of the Morbi market initially, with plans to import directly and offer working capital benefits.
Uncertain Outlook: Management flagged continued volume headwinds in Morbi due to price dynamics and upcoming festivals, with Q2 volumes expected to be lower than Q1.
Revenue declined year-over-year, standing at INR 4,065 crores for Q1 FY26 compared to INR 4,615 crores in the same period last year. However, profit after tax was stable at INR 327 crores versus INR 330 crores last year, and EBITDA was slightly higher at INR 579 crores. Management highlighted stable operational performance despite topline pressure.
Industrial segment volumes, especially in Morbi, declined as customers switched to propane due to a widening price gap with natural gas. Morbi volumes dropped from 2.87 MMSCMD in Q4 FY25 to 2.51 MMSCMD in Q1 FY26. Non-Morbi industrial volumes showed modest growth, but management expects continued softness in Morbi due to price sensitivity and upcoming festivals.
CNG volumes grew by 12% year-over-year, with the CNG vehicle base expanding by 15% to 1.565 million vehicles. Gujarat saw a 10% rise, while regions outside Gujarat grew 27%. Only a few new stations were commissioned in Q1, but efficiency and higher throughput drove strong volume growth. Management expects further CNG expansion as additional stations come online.
The company is launching a propane distribution business, aiming for 25% market share in Morbi initially. Propane will be imported directly, allowing Gujarat Gas to offer integrated energy solutions and potential working capital advantages to customers. Management noted there is no significant CapEx required for this venture. Margins are not yet predictable, given the competitive landscape and evolving pricing.
EBITDA margin per SCM improved to 7.7% in Q1, with full-year guidance of INR 4.5–5.5 per SCM. Industrial prices were cut by about INR 3.5 per SCM in response to lower crude and alternate fuel prices. Management warned that margins may remain under some pressure due to festival-related demand dip in Q2 and continued propane competition.
Gas sourcing for the quarter was split between 34% short-term contracts, 38% long-term contracts, and the remainder from domestic sources. The company received 100% allocation for the domestic segment and 41% for the CNG segment. The management is pursuing more long-term contracts, particularly for the Morbi market, to ensure supply stability and better pricing.
INR 121 crores was invested in gas infrastructure in Q1, with annual CapEx planned in the range of INR 800–1,000 crores for FY26. The company is also undertaking digital transformation initiatives, including an expanded ERP system and a new SCADA system for centralized monitoring.
Management remains cautious on near-term industrial volume growth, especially in Morbi, due to price competition with propane, seasonality, and broader macro uncertainties. Q2 volumes are expected to be lower. The company is also monitoring regulatory changes, such as tariff zone adjustments, which are expected to have a marginally positive impact given the current volume mix.
Ladies and gentlemen, good day, and welcome to the Gujarat Gas Limited Q1 FY '26 Earnings Conference Call. [Operator Instructions] Please note that this conference is being recorded. I now hand the conference over to the company Secretary of Gujarat Gas Mr. Sandeep Dave. Thank you, and over to you, Mr. Dave.
Thank you. Good afternoon, everyone. A very warm welcome to Q1 earnings call of Gujarat Limited. I'm and Sandeep Dave [indiscernible] and Head of Corporate Communication at DPL. Just a new and update on our [indiscernible]. The team of arrangement was approved by GSPC Group of Companies on 30th August 2024. The proposed team will elaborate layer structure of GSPC Group, common business synergies and unlock value for the stakeholders. The scheme is subject to various statutory and regulatory approvals. We have filed the team with BSP and NSC and also received no objection from BSBNSC. We also received filed [indiscernible] of Corporate Affairs in February 2025. We are requested and we are to continue such with NCA to expedite the process. The metals directive consideration of Ministry of Foreign Affairs, and we are expecting approval of the team considering longer-than-expected time taken in complete EMC process, we are also simultaneously initiated process for obtaining approach from other equity authorities. Coming back to DGL to give a brief background about DGL, DGL is the largest city gas distribution company in India. DGL is operating in 27 geographical areas, spread across 6 states and 1 [indiscernible] territory. We have a good mix of mature and emerging CGD areas. We have developed pipeline net worth of more than 43,300 kilometers, which provide natural gas to approximately 23.2 lakh households more than 4,425 industrial customers and approximately 15,700 commercial customers.
We also operate 830 CNG stations serving approximately 4 leg vehicles per day. We are aggressively setting up CNG infrastructure as well as upgrading in infrastructure to promote use of clean and clean fuel. We also started in best DBL system. At Gujarat Gas, with the commitment of providing complete energy solutions that empower communities, business and industries, and we can aim to become a total energy solution provider. The Board of Directors of GDL at its meeting held on it progress has approved to undertake sourcing and sale of propane or LPG in customers. This reiterates our commitment towards customer-centric approach. GDL aims to deliver affordable, reliable and cleaner energy by operating responsibly and performing with excellence while sensing environment, social and government factors.
As part of our commitment to ESG initiatives, we have taken various measures, which include hydrogen blending pilot projects, which we have completed with 8% lending. Now we have initiated action for increasing branding level [indiscernible] we have embarked on major digitize and drive across various business operations and processes. Our major contribution to the environment is by virtual promoting use of gas for industrial customers. In Q1, we have renewed funding of approximately 11,242 metric ton of coal per day by providing green fuel.
Further, through our CMG share on various outlets, we have reduced compensation of approximately 3,295 kilometer of petrol per day in the current quarter. At Gujarat Gas, we added the highest standards of safety and a strong culture of safety. GDL is an ISO-certified organization for integrating for integrated quality, occupational health, safety and environment management system we build, operate and maintain a safe and reliable gas network in our areas of operation. With this breed background on GDL and now to Dipen Chauhan to share business update. Over to you Dipen.
Thank you, Sandeep. Good afternoon, everyone. Let me first update on the domestic and commercial segment. We are seeing a positive growth in domestic segment, customer base is now more than 2.5 lakhs domestic customers. DGL has added 36,000 commission customers in Q1 FY '26 and registered 39,000 customers in Q1 FY '26. Importantly, DGL has signed gas sales agreement with [ Bhatinda Militiation ] for the supply of P&G to over 11,300 residential quarters and 230 [indiscernible] The commercial segment is showing steady growth in connection numbers. We expect the numbers in the domestic and commercial segment to increase over the period of time as the new areas mature. DGL at present, has a customer base of 15,700 commissioned commercial customers. Now let me update on the industrial segment. In the industrial segment, sales volume were 4.71 [indiscernible] for quarter ended 30 June 2025, whereas the sales volume during the previous quarter was 5.03% MMSC. Nearly 6%.
As anticipated, during the last earning call, the reduction was mainly in Morbi volumes where customers opted to ship to propane from natural gas due to higher price difference here. Average Morbi volume was 2.5 MMSCMD and on Mobi volume was 2.20 MMS. The Morbi volumes reduced from 2.87 MMSCMD in Q4 FY '25 to 2.51 MMSCMD in Q1 FY '26. The known must be volume or 2.0 for quarter ended 30th June 2025 has grown from 2.16 MMSCMD during the previous quarter. That is an increase of approximately 2%. The non mobile volume has grown by approximately 8% in the same period in the previous financial year.
The reduction in spot RMNG prices and crude prices during the quarter enabled DGL to reduce the prices in Industrial segment. The reduction also enabled DGL to maintain the price differential to protein. That is natural gas premium by INR 3.50 for us. The natural gas demand in Morbi is likely to remain low on account of upcoming General [indiscernible] festival in this quarter. In addition, persistent uncertainty related to tariffs and geopolitical dynamics continue to cloud the overall business outlook. We continue to monitor the various aspects affecting the volumes, mainly price movements of spot LNG and [ altnet ] fuel and consumer goods demand across all our operating areas and shall just adjust to such market dynamics, so as to maintain balance between margins and volumes.
Now let me update on C&D segment. Reported a strong performance in Q1 FY 26 driven by robust growth in CNG volumes and expanding infrastructure. [indiscernible] sales rose by 12% year-over-year with Gujarat recording a 10% increase and areas outside Gujarat delivering a notable 27% growth, underscoring DGL success in deepening its presence across geographies. As of June 2025, the CNG vehicle base across DGL's network reached approximately 15.65 lakhs compared to 13.63 lakhs a year earlier, reflecting a solid 15% growth.
P&G continues to offer a compelling economic advantage, being approximately 45% cheaper than petrol and 23% cheaper than diesel further reinforcing its attractiveness amid volatile fuel prices. During the quarter, DGL commissioned 3 new CNG stations supporting its commitment to expanding reach and improving strategically. C&D sales volume touched a record high of 3.72 MMS highlighting sustained demand momentum. Looking ahead, DGL is well positioned to capitalize on the increasing shift towards cleaner NFV. With ongoing infrastructure development, growing CNG vehicle base and strong customer adoption the company remains confident in maintaining its growth trajectory and strengthening its leadership segment.
Finally, I'm happy to update that during Q1, we marked a significant milestone in our company's digital transformation journey also. With the a focus on innovation and operational excellence, we go for merger -- we have planned to strategically expand our enterprise resource planning ecosystem to incorporate additional key business functions and achieve the benefit of seamless integration across verticals. Along with this, the plant technology transformation of ERP will help to leverage advancement in AI-powered analytics and enhanced decision-making and risk management capabilities.
On the operations, we have drawn a blueprint for implementing a robust and secure SCADA system to enable centralized monitoring and control active across all geographies. This scalable agile infrastructure is designed to support our evolving business dynamics and ensure responsiveness in a rapidly shifting global. Thank you very much. Now I'll request our CFO, Rajesh Sivadasan, to take over, please.
Thanks, Dipen. Good evening, ladies and gentlemen. I welcome you to the earnings call for the first quarter of the financial year '25. I'd like to thank you all for attending the call today. I trust you would have gone to the financial results for the quarter ended 30th June, along with the presentation, which we have uploaded on the website and the stock exchange. During the quarter, the company connected close to 35,000 new domestic connections, making the total PAT domestic connections more than 23 lakhs. Big Water company also invested close to INR 121 crores into the gas infrastructure. The company is also planning to incorrect annual CapEx in the range of INR 18 crores, INR 1,000 crores in this financial year.
In terms of revenue of the company, which has registered, the revenue from operations stood at INR 4,065 crores during this first quarter against INR 4,615 crores in the corresponding part of the previous year. The company received an EBITDA by INR 579 crores in the first quarter against INR 574 crores in the corresponding quarter of the previous year. The profit after tax stood at INR 327 crores in the first quarter compared to INR 330 crores in the corresponding quarter of the previous year. The company's rupee per SCM EBITDA margin for this quarter stood at 7.7% against INR 5.75 in the previous quarter.
The company's estimated EBITDA margin will be in the range of INR 4.5 crore to INR 5.5 for this current financial year. During the first quarter, the company has received around 100% allocation towards domestic segment and 41 percentage allocation to the CV segment. Thus, we have an overall allocation of 51% to the priority segment of the government. The APM shortfall was met by the new wells, the HPHT Gas, the long term and the spot volumes. Gujarat Gas continues to have a great rating of AA stable and the short-term rating of A1 from Cristal Care and India Ratings.
But then as requested by the investors, we have also uploaded the 12-month results of GSPC in GSPC's website. We'll now open the floor for Q&A session.
[Operator Instructions] The first question is from the line of Probal Sen from ICICI Securities.
I have 3 questions. Firstly, you just mentioned about the sourcing partially that 51% of your priority sector sales was met. Can we get an overall percentage breakup in terms of sourcing of 8.8 SMB that we have done. Overall, how much gas is being sourced from which source in percentage terms or in volume terms, whatever is available. That was my first question.
So coming to your question, the gas from short-term contract is basically 34%. Long-term contracts is 38%, and the rest is all domestic gas. Majority of them that coming from APM and a new well yes.
Any -- how much of HPHCs should we get in this quarter?
Close to 0.7.
Right -- so the 51% shortfall that you mentioned, sir, would have been from APM and the balance would be from new all gas. Is that a fair way to look at it?
Hello. Can you repeat?
You said that, sir, on a blended basis, 51% of priority gas was from APM. And you just mentioned HPHT was about 0.7 -- so the balance would have been from the new oil gas. Is that a fair way to look at it?
Yes, new well and spot also. One spot.
Got it. Fair enough, sir. The second question was, sir, about this new business initiative, the propane sourcing and sale that we are looking to do. I just wanted to understand, sir, how will this business model work -- and what sort of commercials are we looking at in terms of what is the advantage that we are bringing in, when other players are also already there that are selling and sourcing propane, particularly in Morbi, if you can just throw some more light on this.
So basically, the current consumption in Morbi is close to gas equivalent is close to 7.5 million out of which 1/3 is gas and 2/3 is propane. So total propane market, if you see is close to around 167,000 metric tons per month, we are basically targeting close to 25% of this market and what we intend to do is basically we want to become an integrated energy supplier for all their energy needs. So they don't have to shift from 1 supplier to the other.
And the advantage that we think we can bring is basically we can help them reduce their working capital requirements since they already have some financial security already provided to us, which we can use if we are selling propane to them. So they don't have to basically us to other suppliers with advanced money and all the stuff.
[indiscernible] I mean, keep finish. Basically, we are targeting a market close to 25% of the total market for the initial few months, maybe this financial year ending and then depending on how we -- what our experience is we can then scale it up further.
So where will we source this protein from sir, will we be deficit contracting the importing it directly? How will it work, sir?
So we'll be importing it directly from the international markets.
Okay. So our pricing will therefore be competitive with any other supplier in the market? So that's our strength basically we have been closing LNG since through GSCC obviously. But that's our strength, and we hope to get open from the international market at a lower price, which we can use to compete in the markets.
Right. Last question, sir, if I may squeeze in one more. You mentioned about the uncertain demand environment overall at Morbi itself. And given that, that continues to be there, any guidance you would like to give on volumes specifically from Morbi going forward for the next few quarters? On an overall exit rate, if you want to tell us for FY '26 for the company?
I think we are viewing the market. We'll continue to look at the market, but I think difficult to guess as to what the number would be, but we continue to look at it, and that's how I can -- that's how as of now, we can put it this way.
Our next question is from the line of Yogesh Patil from Dolat Capital.
Sir, have you mentioned the current volumes of the Morbi on the propane side are the 5 MMSCM? And what we are targeting as the migrates at 25% of that? So 1.2, 1.3 MMSCMD is the right volume to assume for the remaining period of the FY '22? Is that a correct understanding?
For propane?
Yes.
Yes.
Okay. So sir, if possible, what would be the margins on the propane distribution, that's one? And are you planning to do some CapEx in building this propane or LPG supply chain?
So there is no CapEx involved in this entire exercise that we are planning. So accept booking for some capacities in the terminals, there is no CapEx involved.
Any guidance or any ballpark number, if you could give us on the margin side, what kind of margins you will make on the distribution of propane?
Very difficult to get clear antrum in this business for the first time, difficult to give any numbers right now.
Will it be better than P&G Industrial? Would it be lower than P&G industry?
It would be difficult to comment on margin at this juncture. I think we will see -- it will evolve over a secure of time, probably, it will be better placed to comment on margin once we have a good grasp of the market.
Sir, your P&G industrial business has marketing and infrastructure exclusivity is protection, but you are entering into the propane distribution business where more than 5 players are already there. So apart from the working capital, is there any strategy where you can play and really gain the market share inside the Morbi?
I think it's not only Morbi we are looking at. I think propane is being consumed by not only more of the other areas also. So less things unfold under the future. We'll get back in the next quarter by the time we'll be trying to sell the gas [indiscernible] the market, so we'll be having better clarity in the spec margins, et cetera. I think that will be the right time to tell you what strategy we are adopted.
Okay. Last one, sir, have you applied for the propane distribution license towards the regulator? Any update on that side?
We have to get a credit rating from the agency, which we have bought.
Okay. The next question is from the line of Maulik Patel from Equirus.
Couple of questions. Can you just step in on the GSPC performance in Q1 FY '26. What kind of volume did on the tailing side and trading profit or the PAT that used to
Maulik, we are yet to go to the Board with respect to that. Mostly later it will be end of this month. So once that is that it will be available on the website once we have both the Board approves it.
Second question is on this long-term volume we have from the Gujarat Gas and understand there is significant disease happened in one of the contracts and the pricing in the contract has come down. Also, you recently reduced the price in Morbi INR 3 per MCM. With this work offset each other, and the reduction in the Q contract and the price reduction in Morbi, will this offset each other?
Well, I think both are not related as such, but the reduction in selling price is more on account of reduction in crude prices as well. And obviously, we have to link our selling price to the alternate fuel, which is propane in this case. I think -- yes, that's my answer to your question right now.
Okay. So in a way that currently, the propane for the September month is significantly lower at about $520 per ton compared to $518, $519 used to be for the month of August. The next 2 months, there is going to be likely a volume pressure in or we did around 2.5 million CMD in Q1, so Q2 is actually lower than that everything open will see a significant sharp correction, plus there's a seasonality also there because in this August, September month, mortgage and real for some kind of production shut down because of the festival.
So Q2 volume will be lower in the Q1, right?
Q2 volumes would be, yes, lower because of the mask and then the slowdown because of festivals and all.
Sir, on the nonwork volume. I think it has stated around 2.2% kind of number right and been building up well. Do you see any kind of incremental growth in non-oil?
Yes, I think we are seeing a good uptick in nonmobile volumes. We are in touch with various bigger kind of a consumer, bigger kind of consumer whom we are now targeting them with some fixed-term contracts rather than having contract which had termination provisions. So we are going for long-term contracts in non-orderegion, of the sad and other places. We are in touch with certain bulk consumers, and I think we can -- we see a strong growth in nonorganic.
Just last question on the CNG side. Progress on that scheme. I think I understand that it was some 60 or 70 CNG stations come under this for scheme, right? But if we say that over this quarter and in Q1, only 2 additional stations has been set up right. But at the same time, the volume growth or probably if I look at Y-o-Y, it's again around 20, 30 spent been added -- but if I look at the growth has been very strong, it almost around 11% kind of CNG volume growth. Is it more that the efficiencies coming into the picture in terms of a higher throughput at the institutions which is driving this growth?
Yes, please. And the most important thing is increasing the number of CNG vehicles in the state. I think almost nearly 2 lakh vehicle has been added in the last few months or I can say 1 year. And the same way we are adding more and more CNG infrastructure also. There is a good asset utilization in existing stations. And with these new CNG stations are coming up -- we are expecting that vehicle growth will be better than even whatever happened in last year. So you mean to say that last year, we did around 11% kind of EMG growth.
The FY '26 CNG growth can be higher than that?
Possible. That is possible because we are planning to add under the [indiscernible], there are -- we have 70-odd statements are almost in the process of construction. And I think before this December, we'll be able to add at least double-digit CMG churn under this scheme.
Our next question is from the line of Amit Murarka from Axis Capital.
Just to get it clear, so Morbi will be lower in Q2 than Q1. Like what would be the expected run rate?
Can you repeat that? Cannot get the...
No, you said Q2 more volumes will be lower than Q1. Q1 was 2.5%, as you said. So could you just give a guidance as to what could -- what is the number that you can expect on Q1 and Q2 case for the current run rate that you see?
Would be in the range of 2.3 to 2.5.
Sure. Also, like industrial price, I think, has been cut by about 3.5%. And what is the price right now after this cut?
43.30%.
5
So I was just wondering that basically precut, you were at 46.8%, which is more or less flat at Q1 was flat at Q4 and even CNG and domestic PNG are flat in Q1 to Q4. So just I was wondering like the realization had a bit of a drop on a Q-o-Q basis. So what would that be on account of the...
I think realization was more in because if I do kind of revenue driver might lower realization.
I don't think so.
Okay, sure. And just lastly, on GSPC, could you give FY '25 financials -- so it's already on the website.
Next question is from the line of same from S. Ramesh from Nirmal Bang Equities.
So if you're looking at the LPG propane distribution business, have you got the line of sight in terms of SoC and the customers who are actually willing to give you a contract, how is that progressing?
Basically, we are in touch with various international supplier for sourcing propane. As far as customer base is concerned, those are our existing customers, and we are very confident that we are sourcing propane.
Okay. So if you look at the Slide 12 and 14, I have some questions there. So the Slide 12 gives the details of the spread of the geographic areas. So can you tell us in terms of the potential for ramp-up in volumes in the next 2 years, which are the GA or areas where you see growth potential -- and which are the areas where you see a quick ramp-up to EBITDA breakeven and positive contribution to ours.
Yes. Ladies and gentlemen, the line for the management has been disconnected. Please stay connected until we reconnect them. Ladies and gentlemen, the line for the management has been connected, Ramesh sir. Please go ahead. You can continue. The management line is connected now.
Yes, I think the call was disconnected and we were discussing the LPs in propane sourcing. We can get back there. So I had a couple of questions on Slide 12 and 14. In Slide 12, you have given the breakup of the GS across the 27 GAs and the different cities. So you can give us a sense in terms of where you expect a quick ramp-up in terms of volumes or peak volumes? What is the number? And which are the areas where you see profitable operations in the next 1 or 2 years, and the second question is on the Slide 14, where you have given data on the [indiscernible] stations. So in the past, whatever transactions you have had -- how much of CNG volume is coming from these franchisees stations? And what is the distribution cost for the existing advantage stations?
And the other 2 thoughts I would like to have some vision. Will you please repeat the last question?
Yes. The first question was on Slide 12 across the different GA. Second question was on Slide 14, where you have given the breakup of the different types of outlets, which includes the franchise, which I presume will be similar to your door outlet. So if you can share the current performance of the branches you opsin terms of the share of the CNG volume -- and what is the kind of distribution costs you have for these franchises our to be used for passes, how the ramp-up in the [indiscernible] will help to in terms of volume growth and the cost of that business?
There is a -- I'll just say the distribution of the station, which you see that.
So we have the distribution of the changes out marketing is the franchise changes of INR 95, INR 24 and [indiscernible] What is the per volume or the overall aggregate volume to? And what is the distribution cost for these specific changes compared to your overall distribution costs, that will help us get some idea about the cost of the [indiscernible] how you can generate some earnings and cash flows from that, right? So just to understand the promise of the current franchisee?
And I think the current franchise in one on a commission basis, not the sale of CNG, which happens over there. I think, is in the range of INR 3 to INR 4 per kg. That's what the commission we are giving to the franchisee. And for the OMC also, the model is the commission is same. But in the -- to the [indiscernible] but in the ore of seeing where CapEx and OpEx both by the franchisee, we are giving INR 8 per kg for online stations and nearly INR 10 for Data booster station.
Okay. So these existing [indiscernible] what will be the CNG volume per day or aggregate volume for the quarter. Can you just share that with us the existing franchise stations?
So we don't have the exact specific for the franchise, but on an overall basis, we averaged around 3,000 kg per day.
So would it be similar to that in terms of the rate.
Yes, for the new store of people coming in, they have looked at it in those range only from INR 2,000 to INR 3,000 would be the starting process. And then going forward, increasing based on the traffic, which is there.
Okay. So if you go back to that Slide 12 tin, if you can give us some thought in terms of where you expect the biggest bang for the buck on the growth in CNG and PNG across 27 GA in terms of over the next 2 years, where is the visibility? And what is the kind of ramp-up in terms of EBITDA breakeven and progressively profitable operations. Where do you see that happen in [indiscernible].
You are asking too many things in 1 thing, but I'll just try to summarize that. Basically, the growth is practically happening in [indiscernible] rural area, the Taneira and the Surat area, wherein the CNG, practically, we are getting a much bigger more than 10 to 15 percentage growth is happening over there. With respect to the margins, yes, we'll be having the -- you know the margins which you are running on the CNG. So that margin will be protecting those margins going forward. But yes, the APM gas allocation will definitely affect the EBITDA margin going forward. stable number. Yes.
Sorry, please go ahead.
No, you tell me.
Yes. So if you look at the current CapEx and the commercialization of the GA and the increase -- when do you think you'll be able to generate EBIT to cover the depreciation and generate positive ROCE double digits across all the 27 GA, what is the time line one would expect?
No, I think we have -- with respect to the C&G statements, we cover it between 3 to 4 years we cover the focus stations. And I see in the franchising model, the rest of the things are the OMC model there the different ones and different buttons have different ROEs and the payback periods.
No, I'm not asking the [indiscernible] I'm asking for the new GA where you're committing your [indiscernible] commercialized. So from the time of commercialize, what is the time line when you look to get the double-digit ROCE.
It will take 4 to 5 years because these are all, for example, the [ Panamera ] and we have new developing areas. So we expect that 3 to 4, 3 to 5 areas is the time period where in which we'll be able to recover the things.
Our next question is from the line of Achal Shah from Ambit Capital.
Yes, sir, your I just wanted to note that since currently propane is favorable. But if RLNG is favorably in the long run, what would be the industrial volumes? Where could the industrial volumes reach a ballpark figure in MMSCMD?
So if the LNG is favorable, which we hope to -- which we hope it to be very soon. I think we can easily do $6 million in Morbi and close to $2.5 million in non Morbi.
Got it. And sir like shifting would take some time, like when our LNG is like becomes attractive, how much time would it take if it continues to remain attractive for like 6 months, 1 year or 2 years. So that volumes will start increasing from next month onwards or it would take some time?
I think in the short term, there could be -- there are some issues, but I think we expect a lot of LNG -- new LNG supplies coming into the market from countries like Qatar, U.S. and Mozambique and other countries. So that will put pressure on the -- that will increase the supply and basically we put downward pressure on the prices. So we are hopeful, I think in the shorter term, there are some issues. But I think we are hopeful that very soon we'll be rating new. I mean we'll be basically able to sell more in Mordano diligence.
Got it. Sir, just second and the last question is this press release by PNGRB, where they have reduced 3 zone to 2 zones. What will be the impact if positive or negative for like a gas on margin right?
Based on the present tariff you are talking?
So sir, like currently, there are 3 zones for a for transmission that will like -- after a few months that will move to like 2 zones. So after that -- what will be the impact on our margins since some volumes will go to Zone 1 and Zone 1 rates will increase and which will be expensive and so on to. So have you done any of such analysis?
No, see, for us. Based on the present tariffs, which are that there will be a positive impact for us.
So sir, I'm assuming a majority of our volumes are currently in Zone 2. Is it -- or?
Yes, it is in zone 2 to you're right.
So like eventually, it will go to the new zone one, which will have a lower tariff than the current zone 2.
Yes. After the -- this is changed, 42% was being Zone 1 and 46% will be in Zone 2.
The currently what is the breakup?
Like it's 14, 53 and 21.
The next question is from the line of Varatharajan Sivasankaran from Antique Limited.
If we see the last few , the addition in terms of outlets has done significantly. You have been talking about the [indiscernible] other models and 200 outlets being currently kind of approval and so forth. But you're not seeing the genome pickup in terms of acre additions. So if you can give some impact.
Actually, the CNG casement and infrastructure is a bit if you see the number of permissions and everything is required. And when this -- most of the art franchises are doing it for the first time and the company is providing all the support to -- for the application even. That's the reason it's why going through. But right now, out of 70-odd agents, which we have already signed, applications already submitted and 43 approvals we have already received in those franchises.
So I think, as I mentioned earlier in the this conversation, that we will see double-digit addition in the CNG station under [indiscernible] scheme before December.
My second question was that you like to just now pointed out as well answering Mr. [indiscernible] question, that you are confident about the global gas prices, LNG prices coming off. Then why reason to consider this option of getting into or promote -- if I then look it will be more expensive than the LNG, then there is no market in that, et cetera. Just now also you mentioned that in [indiscernible] things fall in place, we'll be able to do and where you can consider this as an option.
So in the short term, I also mentioned that in the short term, there are some issues. And obviously, we see some other customers got our suppliers for propane. So we want to be a single supply a single energy supplier for our customers. And if there is some money to be made there, why not? I mean, we could be -- that money is there, lying on the table, we should be able to grab it. So that's even -- maybe it is for the short term, but we should be there to grab that opportunity.
Next question is from the line of Mayank Maheshwari from Morgan Stanley.
I think the question was more related on the strategy on LPG. I get your point around a single energy supplier. I think if I look at historically, you have been a bit more wary about signing long-term supply contracts on energy -- so for LPG, do you think you will be buying spot or you will be even trying to get those 1-year contracts to separately there in the market, you power from Saudi Arabia, et cetera.
I think we are basically right now looking at spot only because pricing, if you see in the propane market is basically previous month, Southeast and into that. So we are basically looking at spot only as of now. But on the gas side, we are looking at definitely... Pardon??
No, sorry, go ahead.
But on the gas side, definitely, we are looking at signing long-term contracts for a major share of the mobile market.
And sir, would you -- like is there a number in your mind that you think over the next 5 years you want to kind of have in terms of long-term LNG contracts?
Yes. As I said, I think we would be covering almost 2/3 of the more market with the long-term contracts.
Okay. Then on the LPG point, you said that you'll be buying spot. But in terms of getting LPG even from the Middle East, I think you need tankers and all that stuff. So you will be doing that also spot fixing or you are kind of trying to get at least the logistics side on a more long-term basis?
So there are contracts which are available on that basis delivered to Indian ports. So once we get the debt surprise, I think the rest of the infrastructure is already there. Got it.
And then just last question was on CNG. If you look at, I think, in terms of CNG margins as well implied in your numbers I think there is some pressure there. Is that largely because of the Doro coming in? Or is there something else that we should be worried about?
No, no. The margin is basically affected because we have increased the commission, okay, of the OMC. And that's the only reason. Otherwise, CNG business, we are quite is about.
Okay. So on a like-to-like basis, you have not seen any compression in CNG margins?
Okay. So that's taking...
Sir, on the APM see, ultimately, the APM shortfall has been met through the spot and the other sources of gas. So automatically, that margin will be affected.
Okay. That's what I did at quarter-on-quarter. I thought the APM numbers are reasonably similarly not really different. So it is Yes, we only have 4% allocate Yes, yes. Yes.
Next question is from the line of Hardik Solanki from ICICI Securities.
2 questions. One is what is the -- what was the GSPC volume for FY '25? And what was the cash and cash equivalent as on March 25. We achieved a volume of close to 12,450 MMS my GSPC for the previous year, 425 SP-14 And cash in that equivalent
It would be close to INR 2,300 or something approximate [indiscernible]
Similar to the last year, right?
Yes.
And secondly, what is the -- what was the propane to industrial price discount in Q1? And what is currently after price.
I think it has remained almost the same because the propane prices have also come down.
So what the discount at the moment?
Yes, close after the price cut is close to 4%.
Our next follow-up question is from the line of Yogesh Patil from Dolat Capital.
Sir, if you could give us some CAF sourcing details in MMSCMD unit terms. Now what we know, PAT, volumes, which is a crude LNG contract at to point for you, and Qatar is closer to 1 MMSCMD. Apart from that, if you could give us an APM volume and volume and any spot which you have purchased during the quarter. That will be helpful.
I think we -- [indiscernible] mentioned about the same percentage earlier of the 8.8% breakup he has already told you for the concern.
Our long-term gas sourcing contracts for the Vifor renewal in this calendar year. When can we give any update on this side?
As of now, we have extended the contracts -- so basically till March 2026. So after that, we'll be renewing the contracts again.
Thank you. Next question is from the line of Nitin Tiwari from Phillip Capital India Limited.
So I already basic question, sir. the margin that you spoke about the PC margin or the dealer margin that we offer in C&D. So that's -- where is that adjusted? Is it adding our cost or in the top line.
Which margin you're talking about.
The dealer margin, sir, the INR 3 to INR 4 margin that you indicated to the core of people taking part of the operational cost.
That is part of operational costs. [indiscernible] Okay.
And secondly, sir, is the discount that you had said about between propane and natural gas in more. Can you give that to us in even comes. So what is our pricing in, say, in with in more what is it open? And what is the price is come
0
Okay. But presently, we told what we told was in SMB for SCM. Yes. Basically, that's the gas prices are close to INR 44 on against the propane NG equivalent price of INR 40 per SCM.
As far as the -- that's I was expecting looking for that data in [indiscernible] with that in terms of what is the price in rupees per in the Q4 open natural gas engines, what is the gap? So I suppose your billing would be in rupees per.
Yes. Yes.
So what is the INR 5 per eater for natural gas and for open?
Just give us a minute. Yes. So in the meantime, I'll just make to highlight something. So this is about the realization on an overall basis that I mean you if we look at your revenue sort of divided by the volume that we have in this quarter. So if we suppose I mean [indiscernible] account for other price points, which is your industrial and the price point that you are charging in Morbi and then try and have an outstanding of how much are [indiscernible] would be in this quarter. So that's actually lower than the headline price. That's why I was asking that whether or dealer margins are adjusted against the headline price. Or is it again adjusted against the operating costs.
That is it was included as a part of the operating cost. It is not the top line we change. So top line start if you suppose that you see in the prices then you're going to charge your -- I mean, your top line [indiscernible] basically counted at INR 7 and more right.
Yes. Okay. Yes, we expect the price to be just an update -- that's sorry, INR 1,327 per [indiscernible] would be the gas price. 10 would be the propane price. Sorry, [indiscernible]
These are the current prices.
Our next question is from the line of Soma from Avendus Path.
Question on the margin on the opening remark was mentioned the outlook in terms of 4.3% to 5.3% this year.
I'm so sorry sir, your voice is sounding very muffled.
Is this sounding okay? Sir, my first question is on the margin. So in the opening remarks, you said in terms of this year, we are looking at 4.5% to 5.5% EBITDA per ATM. So we've had a good start for in Q1. Just wanted to understand what are we looking for the next 9 months? I mean why at 4.5% to 5%. I just wanted to share your thoughts.
No, I think there is an uncertainty with receive. The Q2 is always difficult with respect to the festivals coming in. And the propane prices are differential also moving to that's the reason to hold the market also, we have reduced the prices. So I think the correction in the guidance will come by Q3. Let's see how the Q2 goes subsequently, we'll take on that.
Got it. Sir, just one clarification here. So this does not include any impact of the propane marketing that we want to undertake, right?
No, no, no, nothing to do with.
Got it, sir. Sir, second question in terms of the existing propane supply in the region. So is it by the industry currently has been domestically -- I mean domestically sourced propane? Or they are also kind of imported?
So it is actually a mix of domestic and import, but generally, but more or less, it is more on the import side.
Got it, sir. So I'm just trying to go back to your earlier point one, working capital is one advantage that you were mentioning. Anything else because if it's going to be more on the import side, I think from logistics angle, I don't see an advantage. Is there anything else that we can have as an advantage where we can try and get back to this 20% of the market share in that time.
I think difference would be then who does sourcing better, that would be the basically the advantage would lie with them.
Okay, sir. And last question, in terms of existing infrastructure and morbi for propane, of the total units, I mean to what extent the propane infrastructure will be there. But assume put it the other way, how many units of the total mix in overall units which is still only dependent on gas and don't have propane in transaction.
So almost 1 million to 1.5 million of equivalent gas existing consumers are only on gas. So basically 370 units are on are only on gas and 530 units, they have the dual testing. They can use gas, they can use propane as well.
Sir, one small clarification here. So you did mention 1.5 CMT. So we have ended up selling in -- so now this extra initially do they have an option to switch to propane. And the reason for being with gas, is it because they have been tied with some contracts with us and they have to kind of continue to use it the stickiness of the extra one [indiscernible] I just want to understand that.
So it's not because of the contracts because many of these are export-oriented units. And with gas, they achieve certain kind of clarity or whatever you call it in terms of quality, they want to use gas to for any other [indiscernible]
Next question is from the line of Kirtan Mehta from Baroda BNP Paribas Mutual Fund.
I had a question on the GSPC 12.5%, I mean, SMB volume that we've done. Could you give us a bit more color in terms of how much was sold to Gujarat gas and how much was to the external consumers? And also from the sourcing perspective, how much was sourced on the long-term contract? And what was the spot volume there.
Yes, I think what we can tell is around 50%. In respect to the sourcing thing, we can say that close to 65% was on LNG imported and the rest, 35% we source from the domestic and Right.
And everything was a long-term contract or is a mix of long-term and medium-term contracts.
With mix of long term and short done.
Is it possible to indicate the breakup as well in terms of long term and short term?
Not now.
And what is the average margin that we make on this volume? Is it closer to INR 2 per SC?
No, it depends on who are we selling to and all. With respect to Gujarat, we have to maintain the [indiscernible] is always maintain with respect to related party transactions. For address, it's basically bidded out mostly. We participate in the bids and basically we get the bids on that. It's really the fertilizer and other sectors.
Right, sir. Second question was about -- you also mentioned that for the LPG, you'll be tying up the terminal capacity. So would it be the [indiscernible] terminal, which would be the key which would be looked at? Or are other terminals were more economical for us?
ADS obviously would be -- that is the one we are -- that is also one of the one, one of the terminals we are looking at. But there are other terminals also closer to more deep. So we are looking at all the options.
And what could be our inland logistics cost basically to -- from the terminal to this in terms of the rupee per SCM rupee per cage.
So we are still -- I mean in discussions with various partners will maybe in the next this thing, we will be able to communicate to you with better accuracy.
Our next question is from the line of S. Ramesh from Nirmal Bang Commodities.
If you look at the potential in more, what is happening exactly in terms of the tile invest because a lot of concern in terms of exposed slowdown and the tariff issue early in terms of the exposure to U.S. exports. So how is the on-ground utilization there? And how long do you think it will take for the tile industry to get back to a normal consumption and read the full potential of 7 million to 9 million cubic meters service?
I think as of now, we are not seeing anything which is leading to nonelection because even today, out of the total potential of close to 9 CMD, they are still consuming close to, I think, 7.5% MMSCMD. Which is more than 75% capacity utilization. So as of now, we don't see any issue as far as utilization or production is concerned at these ceramic units. Exports are already bringing in excess of INR 1,000 crores per month and growing at a reasonable rate.
So as we speak, I don't think there is any issue as of now.
And then if you look at the LNG sourcing given that there's a lot of coating capacity coming online, is there any line of sight you have in terms of the tie-up of supplies through direct negotiations with GSPC and what is the kind of reduction in price you may expect or discussions on because it is well known that energy prices are going to possibly decline. But what is the progress you're making in terms of negotiation there in terms of tying up long-term contracts?
So we are in touch with various -- I mean GCC through SCC, we are in touch with various suppliers, and we see good linkages available in terms of price. Price in terms of the [indiscernible] 2 brands are at a very reasonable level in view of the increase in the traction capacity and supplies going on stream in near future.
So I think the gas prices would be reasonable as compared to what we are seeing right now, much more reasonable.
So in terms of the housekeeping question, you have a 7% or 8% stake in GSPC LNG, and that's a loss-making entity. So where are you adjusting the mark-to-market losses in your results, FY '25, 1Q FY '26? And when is it likely to turn profitable?
So we are not -- it's not -- they're not consolidating on an underlying basis.
Yes. But we still have to provide mark-to-market for an 8% stake in [indiscernible] So where is the account?
No, they have given a valuation to that. So the valuation has not gone below INR 10 at the price which we have acquired. Okay. So basically, there is no mark-to-market requirement?
Thank you. Ladies and gentlemen, as there are no further questions, I would now like to hand the conference over to Mr. Sandeep Dave, Company Secretary, for closing comments.
Thank you, and over to you, sir.
Thank you, everyone, for sparing your valuable time for attending the investor call. [indiscernible] is approaching and best wishes on behalf of GGL management to all our investors who participated on the call. We look forward to interact with you during the next call.
Thank you. On behalf of Gujarat Gas Limited, that concludes this conference. Thank you for joining us, and you may now disconnect your lines. Thank you.