Mahanagar Gas Ltd
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Mahanagar Gas Ltd
NSE:MGL
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Ladies and gentlemen, good day, and welcome to the Mahanagar Gas Limited Q1 FY '25 Earnings Conference Call hosted by PhillipCapital (India) Private Limited. [Operator Instructions] Please note that this conference is being recorded. I now hand the conference over to Mr. Nitin Tiwari from PhillipCapital (India) Private Limited. Thank you, and over to you, sir.
Thank you, Via. Good evening, ladies and gentlemen. On behalf of PhillipCapital (India) Limited, I welcome everyone to First Quarter FY '25 Earnings Call of Mahanagar Gas Limited. We have the pleasure of having with us today the senior management team from MGL represented by Mr. Ashu Shinghal, Managing Director; Mr. Sanjay Shende, Deputy Managing Director; Mr. Rajesh Patel, our Chief Financial Officer; and Mr. Rajesh Wagle, Senior Vice President, Marketing.
Before we begin, I would like to mention that some of the statements made in today's discussion may be forward-looking in their 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 ask you to consider that quarterly numbers are not a reflection of long-term trends or indications of full year results. With that, I will now hand over the call to management. Over to you, sir.
Very good afternoon to all of you. Thank you, Nitin, for organizing this. So good afternoon to all the investors on this earnings call of Mahanagar Gas Limited for the first quarter of the financial year '24-'25. I would like to thank you all for attending our earnings call. MGL continues to create CGD infrastructure across its business segments in the license areas.
During the quarter, 35,544 domestic households were connected. And thus, we have established connectivity for nearly 2.53 million households. We have laid 85.51 kilometers of steel and PE pipeline, taking the total length to over 7,054 kilometers. We have added 2 CNG stations during this quarter and with this, we have 348 stations as on 30th June '24. We also have added 104 industrial and commercial customers during this quarter. And therefore as of 30th June, we have 4,845 industrial and commercial customers.
In respect of our Raigarh GA, we have connected [ 80,854 ] domestic households and 47 CNG stations, which are currently under operation. During the quarter, we have laid 8 kilometers of pipeline in Raigarh, therefore, taking the total length of pipeline to 424 kilometers in Raigarh. With respect to Unison Enviro Pvt Ltd., a wholly-owned subsidiary of MGL, the company has added 1 CNG station during this quarter and has a total of 57 CNG stations as of 30th June.
During the quarter, 341 domestic households were connected, and cumulative household connections are 27,339 and [indiscernible] as 57 industrial and commercial customers as of 30th June. Overall, average gas sales for Q1 of the current year compared to the corresponding Q1 of the previous year has increased to 3.858 mmscmd from 3.1412 mmscmd, which is an increase of 13.1% compared to Q1 of current year. Compared to corresponding Q1 in previous year, sales volume in case of CNG has increased from 2.481 to 2.772 mmscmd, which is an increase of 11.7%.
Sales volume for the domestic PNG has increased from 0.496 mmscmd to 0.54507 mmscmd, which is an increase of 10.4%. In case of Industrial and Commercial sales, Commercial sales volume has increased from 0.435 to 0.53 mmscmd, which is an increase of 23.8%. During the quarter, we achieved overall average sales of 3.585 mmscmd at against 3.779 in the previous quarter, which is an increase of 2.1%. Current quarter volume consists of CNG volume of 2.772% and domestic PNG volume of 0.547 by 0.539 mmscmd of gas has been applied to Industrial and Commercial segments.
Compared to the previous quarter, sales volume in case of CNG has increased from 2.666 mmscmd to 2.772 mmscmd, which is an increase of 4.01%. However, in case of Industrial and Commercial, sales volume has marginally decreased from 0.55 mmscmd to 0.539 mmscmd, a decrease of 2.13%. The sales for domestic PNG margin decreased from 0.563 mmscmd to 0.547 mmscmd, which is a decrease of 2.8%. As per our past trend, it is observed that generally, PNG volume remains same or a little lower maybe due to school vacations and other seasonal reasons.
Current quarter EBITDA is INR 418 crores compared to previous quarter EBITDA of INR 394 crores. EBITDA margin is 26.33% for the current quarter as compared to previous quarter of EBITDA margin of 25.13%. Net profit after tax is INR 285 crores for the quarter as compared to INR 265 crores in the previous quarter, an increase of 7.4%.
Coming to UEPL, Unison Enviro Pvt Ltd. During the quarter, they have achieved in their overall average sales volume of 0.168 mmscmd as against 0.146 mmscmd in the previous quarter, which is an increase of 14.51%. Current quarter volume consists of CNG volume of 0.165 mmscmd and PNG volume of 0.01 mmscmd. Therefore, MGL as consolidated entity has achieved total sales volume for the quarter of 4.026 mmscmd.
There's a recent launch of CNG 2-wheeler with Bajaj on 5th July. And also, there has been announcement by TVS for introducing CNG scooters around first half of 2025. It has opened up new set of customers for CGD companies, and MGL sees as another volume growth opportunity, considering the large number of 2-wheelers in the country. And we are gearing up to cater to this segment.
With this, I conclude and would now like to open the floor for questions. Thank you very much.
[Operator Instructions] The first question is from the line of Probal Sen from ICICI Securities.
A couple of questions. Number one, what was the percentage of priority sector allocation for this quarter? And any sense you can give us, in terms of what that number would be for the rest of the year?
Current quarter, APM allocation for the priority sector at the CNG and domestic put together was in the range of around 69%.
69%, sir?
Yes. And I think previous quarter was around 73%, 74%. As respect to your -- going forward, I think we'll have to wait and watch how does it move. Last few quarters, it has been reducing but let us see that the trend may get stabilized or may reduce slightly.
Right. So sir, just extrapolating this, obviously, that means that our share of term LNG or would it be -- or spot LNG will continue to increase, assuming this because our volumes are also going up. And the rate of decrease is fairly sharp the last few quarters. So in terms of margins then, is Q1 run rate basically something that we should be sustaining? Or is there some scope for improvement, particularly if spot LNG prices remain at the moderate levels that we have been seeing for the last few months?
So I think as you've seen in the last year, also quarter-on-quarter, we have been adding HPHT when there is a decrease in the APM allocation. And our endeavor will be that blended cost for priority sector remains in this range. And I think, if you see my Q1 results, we have been able to maintain or marginally improve. Okay.
Also, we have signed term contracts where we may be able to use it for priority, in case the indexes remain lower. And yes, if the spot also remains in the current range or goes down, we are hopeful that we will be able to maintain the gas cost, subject to yes, APM allocation going down marginally or remaining same. Not drastically going down, okay? I think other factors like exchange rate also needs to be monitored.
As of now, I think we are confident that more or less, gas cost will remain in this range, okay? And I think having reduced the price in the month of July, there could be a little pressure on the margin. But overall, I think it is a comfortable position. Whatever guidance we have been giving in the past, INR 10 to INR 12 per FCM EBITDA, we are hopeful that we'll be able to achieve that for the year.
Got it. Sir, last question, if I may. If we can get -- given these very strong volume growth numbers we have been seeing in the last couple of quarters. Guidance, obviously, has gone in a way by the management any way slow about 7%-plus. So should we still hold on to that? And if you can kindly also give for Unison, what kind of growth should be built, given the relatively smaller base for, at least, '25 and '26? Any indications there?
CAGR volume guidance remains the same. I mean, more than -- slightly more than 6%, 7%. Quarter-on-quarter, it can vary. We can have some strong quarters, some [indiscernible] quarters. But directionally, we don't see any change. Of course, it is still an improvement from our last many year's average, which will be maybe 5%, 6%. From that there, we are moving up definitely.
And so UEPL, sir?
I mean is the small volume, so we have seen a growth of around 14% as compared to the last quarter. But we expect that the volume growth in Unison will continue to happen because we have taken several steps after we have taken over the company. And the results will be visible during this financial year as well as coming through more years. So we think that the volume pace is small, but the growth rate will be more than 10% on year-on-year basis for at least, a few years to come in Unison. Or maybe slightly more than what you see quarter-on-quarter, 14%, which I think already almost 56 stations in place. And we endeavor to put more stations. You will see minimum double-digit growth -- higher double-digit growth.
Right. So mid-teens is what we should be working, sir, with roughly on an annualized basis?
Yes, mid-teens.
The next question is from the line of Yogesh Patil from Dolat Capital.
Congratulations for the great set of numbers. Sir, wanted to know about considering the strong CNG volume growth, we wanted to know the CNG vehicle addition details during the quarter. And do you have any updates on the CNG buses addition by the MSRTC?
Yes. During the quarter, roughly about 20,800-odd vehicles were added on to CNG. This is compared to, let's say, 20,100 of the last quarter of last year. And MSRTC added about 90 buses during the quarter.
Sir, can we give a little bit breakup on the passenger vehicle, commercial vehicle or the recharge on these 20,800 CNG vehicle additions?
About 14,200 are would be private cars, taxis, et cetera. Roughly 5,000 would be 3-wheelers. And the really small commercial vehicles will be the -- Tata is more super carry types will be about 1,200, 1,300. The remaining will be medium, heavy commercial vehicles and buses. In buses, MSRTC's contribution was 90. BEST's contribution was 59.
Okay. Sir, second question is related to about your capital expenditure plan for FY '25. How many new CNG stations additions or upgradations are expected in FY '25? What was the CapEx during the quarter?
During the quarter, we have incurred CapEx in the range of around INR 250 crores. And with stations, we are going to add -- I mean, we have set up a shift target around more than 50 stations, we expect to add this financial year in MGL alone and maybe another 25 stations will be added in Unison Enviro. So in total, maybe around 75 stations will be added in the overall numbers. 350 plus 57 of Unison and another 75 will be added for this financial year, CNG stations.
Okay. Sir, APM gas allocation size, you mentioned that it was close to 69% during the quarter for FY '25. What is the current APM gas allocation run rate? And any ballpark figure you can share, if possible?
I said 69%. Currently also, it is in the same range, same range.
Okay. Sir, just a few hours back, we attended the IGL call and they mentioned that they are getting a 62% APM gas allocation for the priority segment. So the difference in APM gas allocation is due to the CNG volume growth or any other reason? And just wanted to get some clarity on it.
I think there is -- maybe there is a difference in the manner in which the percentage is worked out. Either it could be total volume versus priority or it could be they are allocating first whole priority to domestic. Balance available, they may be comparing with the CNG and that percentage that could be there. What I am telling you is total APM versus total priority gas sold, that is domestic plus CNG put together. That is the 69%, okay? So what manner the percentages worked out or what is the base with which APM allocation has been compared.
The next question is from the line of S. Ramesh from Nirmal Bang Equities.
So if you look at the recent performance, is it possible to share the top line and whether you are breaking even at EBITDA? And what kind of EBITDA run rate you can expect per SCM, say, over the year and next year?
Top line, can you repeat the first part? What is the top line question?
Basically, on Unison Enviro, based on the volumes you have achieved so far, what is the kind of top line you booked this quarter? And how do you see the EBITDA per SCM for the quarter and for the coming quarters in FY '25? And how do you see that improving, say, in FY '26?
In terms of value -- sorry, volumes, it was roughly 153 lakh SCM, okay, or 0.17 mmscmd, which is already touched upon in the call. In terms of value, revenue is roughly INR 88 crores for the quarter, Q1 of this year as against INR 82 crores in the last quarter. Okay?
So in terms of the earnings, EBITDA or EBITDA per SCM, can you give us some insight?
EBITDA is more or less in similar range as MGL. Since not sharing you exactly the number because there are certain costs, which are specific to this Q1 and we taking over. So not very right way to compare it, okay? But I'll tell you, gross margins are also more or less in the similar range. So the prices are higher and their costs are a little bit higher. So they are also in the range of a little more than MGL, maybe INR 1 more than MGL, in terms of EBITDA margin.
So just trying to understand if you have shown a consolidated result. Is the contribution from Unison, a profit breakeven or a loss in your consolidating results?
I think as we have been informing in the earlier calls also, either the UEPL as such is breaking even at EBITDA level. There's a cash profit. And for the whole -- quarter, there was a PAT of roughly INR 10 crores, okay? However, when you see on consolidated basis, there are some notional increase keeps on coming. So you will not get the correct picture, at least, on the quarter 1. When you see our annual report, maybe you will be able to get more information on the details on an annual level basis for UEPL.
Understood. So now if you look at your core business, in terms of the Y-o-Y trend, when do you see the Y-o-Y trend reverse into growth? Will it happen in the second half or would you see that happen by FY '26? Last year was admittedly a very high base. So given the current run rate in conversions and potential for any improvement in EBITDA margins, the INR 100 increase in prices, should we expect the earnings [indiscernible] improve on a Y-o-Y basis to positive growth by second half for next year?
Are you referring to volume growth or EBITDA margin?
I'm talking about earnings growth because if you look at your results, they are down, right, Y-o-Y down. So in terms of the -- from an investor's perspective, you're doing the right things in terms of adding vehicles and showing growth in volumes. So the question is based on the current run rate and volume growth, and the kind of pricing power and the ability to manage the gas cost. What is your sense in terms of when you will be able to show growth at EBITDA and PAT level over the next, say, 4 to 8 quarters? Would it happen in the second half? Or should we expect that to happen in FY '26? What is the current expectation?
I think there are a lot of factors on which this depends, okay? First of all, the volume growth is there, which is visible compared to corresponding quarter last year. If you consider that there was seasonality in Q1 always, so we expect that there will be better growth in Q2 and Q3, okay? We have also taken a price increase, as you may be aware, in the month of July of INR 1.5. So our endeavor is to maintain margin in line with the gas cost available to us.
And with, I think, volume growth going up, there will be a reduction in the OpEx per SCM as well. So if we are able to achieve maybe more than 6% to 7% volume growth, we see that absolute EBITDA will also grow. It may take 3 to 4 quarters for absolute EBITDA to start crossing the current or the past year level. Because as we have been saying that in the past year, our margins were quite high, and EBITDA achieved slightly higher than the normal performance in the year.
And after that, there has been a decrease in APM allocation, and we have been trying to manage that gas cost. So considering the APM allocation available at this stage compared to what we got in the last year, last year almost 90% APM was available, okay? So presuming that the APM allocation remains where it is, volume growth accrues the manner in which it is accruing now, we are able to do better physical infrastructure, laying down in UEPL as well as in MGL, which will certainly add volumes. And we are hopeful that we will be able to take from here on the EBITDA level and cross maybe the best in the past.
If I may squeeze one more question. In terms of the LCV additions, when do you see that -- saw some improvement? And when do you see that delivering in terms of increase in the growth rate for CNG?
If you see small, commercial vehicles have been getting added quarter-on-quarter quite well, more than 1,000 at least, every quarter, okay? And currently, we have more than 12,000-odd from a small commercial vehicle. [indiscernible] and RTVs are also almost 16,000. Both put together, they are almost 28,000-odd. So I think -- and the truck number is also increasing. If you notice, even DST buses have come back this quarter, 59 and 79 MSRTC buses.
One point I would like to add about the commercial goods vehicles is that whatever reports and media we are seeing on that segment, the commercial vehicle additions across fuels is lagging slightly. I don't know if it's because of the economy or what. But however, we are still attempting to claw out a larger market share for CNG out of whatever comes new in the market. So we have developed traction and we are hoping that things will -- the numbers will improve from here on.
And any concern on the increase in the growth rate of hybrid vehicles? Technically, is that going to be kind of a deterrent for incremental growth in...
Ramesh, so sorry to interrupt you. As there are other participants in the queue waiting, so may I request you to wait in the question queue for a follow-up questions.
This is one last question. It is important for everyone.
Okay. Last question. In short, that doesn't move the needle, hybrid vehicles. The number is too small right now for a [indiscernible].
So it's not going to have any impact as of now because the overall volumes are much heavy and the volume of potential to get the petrol vehicles, diesel vehicle on CNG side is much, much more. So it's not that EVs or hybrid vehicles are going to make an impact as of now.
[Operator Instructions] The next question is from the line of Sabri Hazarika from Emkay Global.
Congratulations on good numbers. So just 2 questions. Firstly, on the LNG, you've given the revenue but what is the current unit economics of the LNG station? So you've got 1 right now. So how much was the sales and what was the margin profile? And what are your plans for LNG for the next 1 year as well as for the next 3, 4 years?
I think within MGL, this is 1 station because after this station, we have entered into joint venture with [indiscernible] LNG. And more new section we'll be taking up under that JV, okay? Coming to your question on volume of LNG. In MGL, that [indiscernible] we were selling around 3,000 in the last quarter. Currently, it is almost more than 4,100 [ KDs ] a day that is awarded.
Okay. And what is the maximum potential for this?
The tank is at capacity, so typically, we have to make some volume already in the tank. Maximum, we can go up to 12, 13 tons per day.
12 to 13 tons per day Okay. And the EBITDA margin profile is better than CNG or it is similar?
Today, we are seeding the market so EBITDA margin can not be better than...
Just for making sure that we get the proper contract and every ecosystem is in place, so we are seeding the market. So it is cannot be compared with the established market like CNG.
Okay, okay. Fair enough. And secondly, regarding this open access. It is completely done for good right now. Is there anything like -- there was this announcement that document, which came in PNGRB that they have put it on hold. So is there anything there? Or it is like completely off the radar at the moment?
The exclusivity, I mean there are many things in it. One is that infrastructure exclusivity is there for which we have sought extension from PNGRB. And we are expecting that it can be -- it will be processed and given to us because there is presidential provisions in the regulation to give 10-year block extension on request.
Regarding the marketing exclusivity, there have been several developments like guiding principle. They have been repeated by PNGRB. The notices, 54 notices, which they have issued to different entities have also been repeated. Now again, the guiding principles are under sub judice. Batch better related to its marketing exclusivity and infrastructure exclusivity is also under sub judice being debated in the court.
So we don't want to comment on it. Maybe after the court decision. Until the time court decides, there is a stay order on both these things for any cohesive actions to be taken against us. So we think our interests are protected until the time judicial decision comes.
The next question is from the line of Rajesh Aynor from Athena Investments.
Hello. Am I audible?
Yes. Yes.
Sir, can you please shed some more light on the volume growth, which you have given us in last 2 quarters? Because the trajectory seems to be moving upwards. What exactly has been the reason and are these reasons sort of sustainable? I'm asking you because despite this [indiscernible] guiding for around 5% to 6% kind of a growth for the future years. So something -- some more color on that will be helpful.
Look, the volume growth, look at the last 2 quarters, it has primarily been drawn by CNG. In fact, we look at the domestic household, BPM numbers or I&C numbers actually decreased slightly. So on an overall basis, we are not changing our outlook. And again, it's not 5% to 6%. It's more than 6% is what we have been saying, 6%, 7% at least. So -- and again, quarter-on-quarter, commenting on exactly why some volume went up 4% higher, why something went down 1%. This is very difficult, to quantify a retail business. We don't have the information at that level of granularity.
So yes, vehicle additions have been strong. More commercial vehicles have been adding. Push [indiscernible] capital contribution is higher. And all that we can say is there are more vehicles on the road, more CNG vehicles on roads across now. And they must be running either how much or they used to run or slightly more for this volume contribution.
The next question is from the line of Kirtan Mehta from BOB Capital Markets.
I just wanted to check on the volume guidance that we are keeping in 6% to 7% while we are running at 12% to 13%. And we have a good visibility on the industry sort of being a double-digit growth over 2 years. So which is the area where we expect the normalization to come through? Or which is running at a higher than the sort of the rates, which may not sustain? Any thoughts or any color on this?
I mean if you look at Q4 versus Q1, CNG increases almost 4%, which is a very large number. Now if you annualize that, the number was much higher. We don't think that will -- that is sustainable for a long time so that may moderate a bit. Industrial and commercial, we repeat that we will -- most probably, we're getting double-digit growth in industrial and commercial segments this year also. And domestic continues its slow and steady contribution because the base is very high. And whatever, 1, 2 lakhs, we keep adding every year, that will contribute to slow steady growth. But the C&I number this quarter was -- yes, slightly maybe higher than usual.
Maybe we are underestimating ourself. The point is that CNG volume is the main driver for growth, around 70% volume comes from CNG. But it can vary quarter-on-quarter. So this year -- this quarter has been much better as compared to Q4 of last year. Going forward, there can be some reduction. So overall, we expect that more than 7% growth, at least, we will hit year-on-year.
Right. The second question is on the cost side. So what sort of the gas transportation cost on an average? How much it is for us? How much of the gas we receive from Zone 1 and Zone 2? Is there [indiscernible] ?
Most of our gas is in the Zone 1. Except HPHT what we buy, comes from.
Reliance.
Reliance.
That is Zone 3 -- Zone 2.
Zone 2. Most of our gases, APM, other things are coming at Zone 1. Some gas, which we are taking from, let us say, KG Basin of Reliance, plus maybe some from -- that will be coming under Zone 2.
Right. And is it possible to share the delivered cost for EPA of HPHT in different buckets?
HPHT is around $9.9 per MMBtu and [indiscernible] transportation, you're saying?
No, basically delivered in terms of the rupee per SCM number, is it possible to sort of differentiate within the different buckets, how the costs vary?
I think if you add Zone 1 maximum, at least 80%, 90% quantity, you will be able to arrive at because 6.5 is -- APM HPHT is around $10.
The next question is from the line of Gagan Dixit from Elara Securities.
Sir, my question is regarding [indiscernible]. In the past, typically MGL was adding 20 to 25 CNG outlets. Now you are targeting almost 50 CNG outlets per annum. So what is the change actually that you see here? I mean, how -- what are the easiness you find to add, to double this something [indiscernible] outlet rate per annum, I think. If you give some color over that.
Several steps have been taken in the last few years. We have, I mean, taken steps in trying to promote different schemes for getting the land. Also, we have been very aggressively following up with different authorities. And we have rationalized more in the process of issuing LOI. And execution also, we are trying to promote simplifying the processes and several other things which we have taken maybe...
The last few years, traditionally, we used to have just a couple of models of CNG channels to almost one was marketing company -- one was . There were very few Now a few years back, we widened that number and we now have almost 4 or 5 different types of offerings for partners who are willing to do business with other open CNG stations. We now have the ability to -- in any case, we really need a CNG station somewhere and land is available.
Yes, we are willing to pay close to market price for it, if that's what it takes to get a strategically important CNG station, which -- so in the marketplace, what we are observing is, if any entrepreneur of person wants to open a few retail stations, they are preferably coming to MGL compared to other few alternative operators like OMCs or even the private fuel retailing companies.
That is contributing to the increase in numbers. Also, of course, as MD said, we are facing very aggressively with government and other government authorities to get more and more land parcels from them. So in the last 1 or 2 years, we have an unprecedently large number of [indiscernible] lots.
Yes. But we are also planning to see that we maintain a good potential to increase both stations, wherever it is possible.
So I can simply assume that this potential will continue for few years. So I mean, this...
Problems in the limitations that after a while, the land availability in certain pockets will be difficult. But we are keeping some margins, and we are trying to get new opportunities, new models, new way of execution. Permissions, too, are also being expedited and so on and so forth. So that, at least, some pipeline is clear that how much we can add in the next few years exist.
And sir, my second question is, I think if I'm following since FY '19 actually that MGL is proactively, I think, have arranged the gas supply procurement. I think you have done, I think. I think you have a few of the companies who have contacted Reliance PG gas also, I think, 8%, 8.5% rate, that's my initial. So this -- how much is that you had the overall gas supply contracts? I mean, over and above also something that actual demand that -- I mean, whatever the overall supply, you have the midterm, long-term contract [indiscernible] sir?
We have already signed almost term contracts. As you already said, Reliance was there [indiscernible] point 1. Apart from that, we have signed abling contracts. Already, we had up to quarter in around 0.76, okay? And after that, also, we are picking up 1 or 2 contracts. HPHT already around 0.5 million. And we propose to take a little more again in the times to come.
So as and when our volumes are stabilizing and we are sure that we will be able to maintain the volumes, we are going and tying up with the term contracts. All these term contracts in the range of 5 to 6 years, except 1 or 2 where it could be 3 years.
So they are over and above, sir, whatever your demand is? You have some cushion of -- if your demand increase, do you have the ability of the...
If you look at the signed contract, over and about is demand, but there is a threshold of minimum pay, some contracts, 60, some at 80, some at 90. So whenever I ramp down, it can meet and whenever I want to go a little more and if there's a demand...
No, we have not over-contracted. Some shortfall and balancing is done through exchange also. So I mean, we are at almost at par with what the gas is being consumed and the contracts which have been made. So see, as was being explained, around 69% is APM. Balance shortfall in this being led to HPHT. And for industrial and commercial, we are importing LNG. I mean, taking LNG from different aggregators and suppliers. So there's a mix portfolio, plus we have got exchange where we do the balancing part whenever demand goes up or down and contract flexibility is also there to balance it.
Just to add, short-term marginal growth, we can do on spot also. And once the spot level increases and stabilizes, and we take a time shot of that and move it to terms, so spot again comes down.
The next question is from the line of Lokesh Manik from Vallum Capital.
If you can just share details on this 4% Q-o-Q growth in CNG geography-wise? The geography was the main driver for this growth would be great.
See, geography, it is -- I mean, floating population, GA-1 and 2 vehicles are moving here and there.
I think percentage-wise, GA-3 will be higher [indiscernible] double digit, but the base is smaller there. GA-1, GA-2, we are not actually -- we really put us in a very, very nice edge kind of this is GA-1, this GA-2 because vehicles move across the border fill from anywhere. People say Mumbai, travel to Thane and vice versa.
And it's just -- it's 1 expense of the metropolitan region. It's said that from the maybe the core city of Mumbai or in growth are not that high. BST is stagnant, for example. In fact, last maybe 1 year, we might have lost a few percentage points on state transport undertaking volume, which now is reversing because of MSRTC and marginally, BST.
Simply, if you take on station situated in each geography, then we have some number, but that is of not much relevance. So if you see GA-1 and GA-2, wherever the stations are and I call it, maybe it is almost equal GA-1, GA-2 or a little more GA-1 because of the traditional volume than and all that.
So incrementally, GA-2 and Unison would have driven the volume, is that a correct perception?
GA-3 also. These are the new volume drivers in a way. I'm saying the higher growth percentage.
GA-1 is saturated. I mean, it's matured market.
Even the stations are being added up in GA-2 and GA-3 primarily. G1, the addition of stations is slightly limited.
Okay. And these commercial vehicles coming in the CNG format, these are more in Mumbai region or they are outside Mumbai? Are they equally distributed?
They are distributed across our geographies. We typically run on highways and they are also involved in last-mile delivery for e-commerce and things like that.
The next question is from the line of [ Sager Kapadia ] from Prabhudas Lilladher.
Sir, in the last quarter conference call, you had mentioned that in quarter 4 -- quarter 3 FY '24, 67 and quarter 4 FY '24, 97. These were the medium and heavy commercial vehicle addition you are referring to, right?
So 67 numbers were actually trucks.
Yes, trucks. These are the medium and heavy trucks you are referring to, correct?
97 was in Q4 trucks, yes. Number of trucks.
Yes, trucks. Yes, these are the medium and heavy commercial vehicles. So this quarter, how much will be the number quarter 1 FY '25?
This quarter is 163.
163. So this is an improvement, no, sir?
Yes, yes.
Can we continue for this year, at least, around 150 trucks can be added every quarter?
We are hoping so. But one thing we have to realize, a slight change taking place in this market. With the availability of factory-fitted medium and heavy vehicles, quite a few people, transporters are shifting from the small commercial vehicle to the medium commercial vehicles. So the small commercial vehicles actually have dropped from over 1,400 to over 1,250. And the delta has not picked up in the medium and heavy ranges. That will improve our overall sales volumes because medium and heavy take more per capita than CNG compared to light. But then the overall number is remaining roughly that same, 20,000, 21,000 kind of range.
I understand, I understand. So they are shifting for the bigger trucks only. So that will be beneficial to them also. And for volume front, it will be beneficial to us, although numbers it will not be so?
Yes, yes.
Sir, another thing I wanted to ask you, you always refer to the CNG vehicle additions, 20,000. So these are all conversions, this 20,000 you are referring to? Or the new vehicles added?
These are predominantly factory-fitted OE vehicles.
Okay, factory-fitted OE vehicles.
Retro fitment number is hardly about 900 or so out of this 20,000, 21,000.
Okay. But you include in that also no, in that 20,000 numbers you retrofit also, you include it every time?
Yes, roughly 20,000 factory-fitted and 1,000 retro-fitted. That's 21,000 or 20,900.
Okay, I got it. And sir, another one important thing. In MSRTC buses, you always say around last quarter, you had said 300 cumulative buses. Even this quarter, they have added. So in our geographical area, what is the total scope of this MSRTC buses, which we can finally, over a period of time, they can keep converting?
We are expecting another about 200-odd to come on, maybe in the next 2 quarters or so. After that, again, we are pursuing continuously with MSRTC to bring up more and more depots on CNG and convert more buses. So let's see how it goes.
Okay. So any range which you have worked out? Like what is the total MSRTC buses [ playing ] in our GA area, which has the scope of conversion?
Okay. MSRTC, we got a total fleet of about 17,000 buses, which probably about 6,000-odd would be touching our GAs.
Okay. So that's a big number?
Yes, that's a big number, and these buses run a lot of kilometers a day. So per capita consumption is almost 80, 90, 90-plus kgs per day. They run a few lakh kilometers. I think they replace the buses in 4 or 5 years. That's how hard they drive them. Of course, the road condition was around else.
This can compensate us for our dropping volume from the BST, right?
Yes, but if you have noticed BST almost slightly slowly creeping back, added 59 buses in this quarter, net additions. We are pursuing them also to adopt more CNG.
Because in media often, we hear that they are going to shift to electric, they're going to shift to electric. So then that makes the sentiment towards the stock a bit negative for the BST.
Despite whatever has been happening with BST, we are still growing at a good rate overall. And 90-plus percent of that is basically now if you look at overall on-ground numbers, BST currently only has the 500, 600-odd electric vehicles. And maybe in the last 1 quarter or so, they've managed to add some 70, 80 more. But for a very long time, maybe 2, 3 years, that number is stagnant and about 500-odd range.
Okay. From last 2 to 3 years only, this 600 is the stated number of the EVs?
Yes.
Okay. So we still have a scope in BST also slowly keep on increasing the CNG vehicles?
Yes, definitely.
The next question is from the line of [ Samaya Vih ] from Avendus Stock.
You did mention 0.16 mmscmd of volumes. So where do we see in the next couple of years, in terms of [indiscernible] volumes please?
Please repeat your question.
We could not get your -- I mean, not clear.
I was looking for Unison, in terms of next couple of years for this year. FY '25 and '26, what is your expectation in terms of volume growth?
Volume, when we started was 0.13 mmscmd. Currently, we are around 0.15 mmscmd -- 0.17 mmscmd. So we think it will grow pretty fast in, at least, quarter-on-quarter and year-on-year because a number of stations are getting increased in these areas. And we think our guidance was that 6, 7 years, you've been crossed 1 mmscmd, maybe 1.3 mmscmd.
So this 6% to 7% kind of volume growth that we are expecting, so I mean, I just want to understand how much Unison would be contributing and how much Raigarh would be contributing to?
Excluding stand-alone MGL, 6% to 7%, which we have been guiding and MGL alone, excluding [indiscernible] there's a separate number, which will get added.
Overall, volume-wise, like in case of MGL, we are having around 3.9 mmscmd. The volumes of Unison is currently 0.17 mmscmd. And then going forward, it will be another 6, 7 years, it can be crossing 1 mmscmd. So maybe 1.3 mmscmd.
Got it, sir. Sir, also you mentioned in terms of profitability for Unison, you said it's more or less in line with company level numbers. So is it because your realizations are higher in the GA when compared to in Mumbai? That's the reason? Because I guess in terms of operating leverage, it will be lower when compared to your [indiscernible]?
Currently, prices in all the GAs of Unison are higher than MGL, okay? And maybe that is because some cost is also there, maybe in terms of gas transportation as well as [indiscernible] transportation because their stations are mostly [indiscernible] booster. As and when we lay further lines, this operating cost will come down, okay? So their price to the customer is also higher and their realized gas costs and other operating costs are also higher. But at EBITDA level, more or less, they are making equal margins as MGL.
Got it, sir. And also you did mention about the 2-wheeler potential. Any rough thoughts currently how you're thinking at it the opportunity set? And in terms of any incremental volumes currently you're penciling in your outlook?
2-wheeler is just launched so it will take some time for pickup in terms of availability of these 2-wheelers on road, adoptability, the experience, the customer experience. And then we will be adding up our -- we are near taking up internally that how we will address this issue of an additional business segment. So as of now, we think wherever the space is available, we can allocate 1 dedicated dispenser for filling up these 2-wheelers.
But going forward, as and when the increase, we will take necessary steps to make sure that they are addressed properly. The volume pickup will take some time because the per sale is very low, maybe around 2 cases of cylinder size. So we will be filing around 1.5 kg per pill. So the numbers to add up [ are ] overall of our vectors will take some time to make some significant impact.
And just to supplement [indiscernible] this Bajaj motorcycle, I think over 130 motorcycles have been delivered in our geographical areas. And when we are speaking to Bajaj, their projections are maybe 700-odd would add every month or so. So when you look at the overall CNG vehicle number of 10 lakh-plus and all that, we should be able to accommodate this. But as MD said, our material growth, yes, it will take a long time. But this is a slow, steady, and we're expecting this market to contribute to that this was never a market segment, which was there in our traditional mix.
Is a very welcome thing, which we appreciate the effort taken by Bajaj and other OEs to design and then launch it successfully, this type of applications of CNG, which is a very welcome thing for the industry.
And since then, there have been media reports of 1 or 2 other major 2-wheeler manufacturers who are talking of now introducing something similar.
The next question is from the line of Anuj Sharma from M3 Investments.
My question is, you touched upon it a while ago. See, the economics of the coming transport with respect to electricity and CNG. Earlier, the data would have been scarce, but how do you perceive the economics of electric BST bus or MSRTC bus versus a CNG bus? How is it evolving also? That will be helpful.
There are certain subsidiaries available in EVs. Secondly, we have done some back-of-the-envelope calculations on the total cost of ownership of a CNG vehicle and electric vehicle bus particularly because let us say, CNG bus is costing around INR 45 lakh per bus. The electric bus costs somewhere around...
INR 1.5 crores, INR 1.6 crores. We have [indiscernible] which show that the total cost of ownership or TCO for CNG was actually lower. But there are all kinds of optics around electric bus, zero [indiscernible], nothing somehow it's making more news, making more news and noise.
Total cost of ownership of a CNG is around much less, maybe 1.5 [indiscernible]
Especially given the very, very poor financial situation of BEST, they are that totally dependent on the municipal corporation or the state government to fund them for these buses. So we are expecting that there will be some limitations there also on how they can grow CV. So they will have to look at CNG and our .
Sure, that's helpful. And you touched upon a few numbers, but if you could just quantify, you said the cost of a bus -- electric bus subsidy would be approximately 1.5 versus the CNG price of INR 40, INR 45.
[indiscernible] INR 1.8 crores per bus electric vehicle.
Without subsidy or with subsidy?
With subsidy.
With subsidy, okay. And when you elongate this on a TCO, what is the difference in a 10- and 15-year period?
EVs, typically 1.4 to 1.5x higher than the CNG, total cost of financial basis. For buses we are saying, right?
Yes, sure. Buses, yes, yes. All right, that's helpful. And this economics, as the subsidy weans off or maybe comes off, this economics will become more and more lucrative towards CNG. Is that a fair assumption? And you already highlighted that...
As I can see, the numbers which we gave you were also dependent on the fuel price CNG prices, electricity. I mean, the time -- not time, the cost required for sourcing the electricity and charging it. So there are certain assumptions in what we have done. So it depends. Going forward, if electricity tariff comes down or if CNG prices come down or go up, then the economics get slightly different.
The subsidy element going forward, I think what we read from media, the government is targeting Tier 2 and Tier 3 cities now, whatever metro, there is a...
But the bigger issue with electric vehicles is that the supply is not available, especially in the buses. The booking -- like earlier, the question was being asked around 2,000 buses were ordered by BST and only maybe 400, 500 are available as on date, despite 2 years have lapsed. So there is a question mark on the availability of buses as well.
Plus again, Chinese buses versus getting imported or some of the batteries. Components are getting imported from China. There also, there are certain restrictions on imports. So going forward, we see that there are several factors, which can impact overall profitability or economics as such. Can't say with confidence, but if you look at the current union budget, the same subsidy allocation has been reduced compared to the past, okay? So probably if that is some indication that maybe will be slowly left to the market forces. We don't know, but that is what the number shows in the union budget. This is despite the fact that GST on electric vehicles is 5% as compared to CNG vehicles, which is attracting 28% GST.
Ladies and gentlemen, that was the last question for today. I now hand the conference over to the management for closing comments.
Thank you so much to our investors to pose and get confident on Mahanagar Gas, and we value that. Thank you so much for joining in today.
Thank you. Thanks.
On behalf of PhillipCapital (India) Private Limited, that concludes the conference call. Thank you for joining us, and you may now disconnect your lines.