Release Date: July 26, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- CNG sales volume increased by 5% year-on-year, despite a decrease in sales to DTC buses.
- PNG sales volume rose by 7% year-on-year, with a notable 16% increase in the domestic segment.
- Revenue for Q1 FY25 was INR3,877 crores, up by almost 4% from the previous year.
- The company is witnessing a promising development in the two-wheeler market, with new CNG-powered bikes being introduced.
- Indraprastha Gas Ltd (BOM:532514, Financial) is targeting a 10% to 12% growth rate for FY26, driven by new LNG stations and increased CNG vehicle adoption.
Negative Points
- EBITDA for Q1 FY25 was INR582 crores, down by 9% from the previous year due to a reduction in CNG sales prices.
- Profit after tax (PAT) for Q1 FY25 was INR401 crores, compared to INR438 crores in the previous year.
- There was a 1% decrease in sales in sequential quarters, attributed to seasonal factors like school vacations and reduced household demand.
- The company faces uncertainty in LNG prices, which could impact future earnings.
- DTC CNG sales volumes have significantly decreased and are expected to continue declining over the next two to three years.
Q & A Highlights
Q: You mentioned targeting 9.5 MMSCMD of volume by the end of this year. Is this the exit rate or the average volume expected by Q4?
A: We are targeting to exit Q4 at 9.5 MMSCMD. Last year, we closed at around 8.73 MMSCMD, and Q1 this year is at 8.64 MMSCMD. The fourth quarter is typically the highest due to winter and the number of stations planned to be commissioned by then.
Q: How will moderation in LNG prices impact your volume targets, given the decreasing allocation of priority gas?
A: We have factored in this uncertainty. Our EBITDA per SCM guidance is 7 to 8.5 levels, and we are currently at 7.6. We recently passed on an INR1 increase to customers, which should help us stay above 8 in the next quarter, providing some cushion against LNG price fluctuations.
Q: Can you provide the volume breakup for UP, Haryana, and Rajasthan out of the 8.6 MMSCMD this quarter?
A: Delhi accounts for 70%, UP is at 2.14 MMSCMD, Haryana at 0.66 MMSCMD, and Rajasthan at 0.1 MMSCMD.
Q: What growth rate can we expect for FY26, given the exit rate of 9.5 MMSCMD?
A: We are targeting a 10% to 12% growth. Our LNG business has started contributing, and we plan to set up more LNG stations. We expect these volumes to offset any threats from EVs, maintaining a 10% to 12% growth over the next five to six years.
Q: Can you share the volume breakup based on vehicles, cabs, autos, and buses?
A: Roughly, 40% is passenger vehicles, 40% is commercial vehicles, and 20% is buses. Specifically, buses are at 18%, private cars at 42%, taxis at 13%, autos at 10%, and light-goods vehicles at 18%.
Q: What is the impact of DTC buses on this quarter's volume, and what should we expect for the rest of the year?
A: DTC volumes have reduced from 3.1 lakh kg per day last year to 1.5 lakh kg per day this quarter. We expect these volumes to gradually go away over the next two to three years as per the Delhi government's policy.
Q: Despite a cut in CNG prices, your net realization per unit has remained stable. Is this due to a change in geography-wise CNG mix?
A: The net impact of the price cut was around INR1.77 per kg. However, operational efficiencies and improved gas sourcing have helped maintain stable net realizations.
Q: What are the capital expenditures for Q1 and the guidance for FY25?
A: Our CapEx for FY25 is INR1,700 to INR1,800 crores. For Q1, it was INR297 crores, up from INR202 crores in the previous year.
Q: What are the margins on the LNG business compared to CNG?
A: Margins on LNG are better than CNG because there is no excise duty on LNG, and the selling price is almost the same.
Q: What is the current APM mix for Q1 FY25?
A: The APM mix is 62%, and RLNG is 38%.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
