Q1 2027 Mahanagar Gas Ltd Earnings Call Transcript
Key Points
- Overall sales volume increased 7.01% year-over-year to 4.766 mmscmd, driven by strong CNG growth of 9.74% and domestic PNG growth of 9.09%.
- Record DPNG conversions of 97,461 in Q1 FY27, supported by the PNG Drive 2.0 initiative, with cumulative connections reaching 2.17 million.
- EBITDA from operations rose 31.75% quarter-over-quarter to INR343 crores, and net profit after tax increased 46.83% to INR194 crores.
- Industrial and commercial realizations improved significantly, with price increases of INR27-32 per cubic meter, driven by higher Brent-linked alternate fuel prices.
- The company maintains a strong balance sheet with zero debt and plans to increase CapEx to INR1,500-1,800 crores for FY27, funded through internal accruals and debt if needed, while maintaining dividend payouts.
- Successful transition to SAP S/4HANA marks a key digital transformation milestone, enhancing operational efficiency.
- Ongoing geopolitical conflict in West Asia has triggered a global energy crisis, causing volatility in LNG prices and supply uncertainty, with spot LNG prices touching nearly $20 per MMBtu.
- Industrial and commercial sales volume decreased 7.15% year-over-year and 9.87% quarter-over-quarter due to a 20% gas supply cut as per government directive.
- Gas supplies to industrial and commercial customers are partly curtailed, and the company has had to rely on expensive spot LNG purchases due to force majeure on contracted Henry Hub volumes.
- The pooled gas mechanism was discontinued in July 2026, and the company has not received full contracted Henry Hub volumes, leading to higher gas costs and margin pressure expected for at least 1-2 months.
- CNG margins were under pressure in Q1 due to higher gas costs, and the company may need to increase CNG prices, which could impact volume growth if the discount to diesel narrows.
- Non-CGD initiatives, including EV and battery ventures, are still in early stages and not yet profitable, with the battery project on hold and EV operations facing challenges.
Ladies and gentlemen, good day, and welcome to Mahanagar Gas Q1 FY27 earnings conference call hosted by Prabhudas Lilladher India Limited. (Operator Instructions) Please note that this conference is being recorded.
I now hand the conference over to Mr. Indrakumar Gupta from Prabhudas Lilladher India Private Limited. Thank you, and over to you, sir.
Thank you, Nisha. On behalf of PL Capital, we would like to welcome all the participants. So from the management, we have Mr. Praveer Kumar Srivastava, Managing Director; Mr. Ajay Sinha, Deputy Managing Director; and Mr. Rajesh Patel, Chief Financial Officer.
Before we begin, I would like to mention that some of the statements made in today's discussion may be forward-looking in the nature, and we believe that expectations contained in the statement are reasonable. However, these statements involve a number of risks and uncertainties that may lead to different results. We urge you to consider that quarterly numbers are not a
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