Release Date: November 07, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Gujarat Gas Ltd (BOM:539336, Financial) reported a 12% year-over-year increase in CNG sales within Gujarat and a 25% increase outside Gujarat, indicating strong growth in the CNG segment.
- The company has successfully added nine new CNG stations, enhancing accessibility and supporting future growth.
- Gujarat Gas Ltd (BOM:539336) has maintained a high digital collection rate, with over 98% of collections coming through digital modes.
- The company reported a profit after tax increase of approximately 3% compared to the corresponding quarter of the previous year.
- Gujarat Gas Ltd (BOM:539336) is actively expanding its infrastructure, with significant investments in pipeline networks and CNG stations, which is expected to drive future volume growth.
Negative Points
- The industrial segment experienced a decline in sales volume from 5.86 MMSCMD in the previous year to 4.91 MMSCMD, attributed to geopolitical factors and increased LNG prices.
- The company faced a significant increase in LNG prices, impacting industrial pricing and margins.
- There is a noted shortfall in APM gas allocation, which has been partially compensated by more expensive new well gas.
- Sequential decline in CNG volumes was reported, attributed to the monsoon season and a CNG price hike in August.
- The company is facing challenges in maintaining growth in the industrial customer base outside of Morbi, with slower than expected expansion in new industrial areas.
Q & A Highlights
Q: Can you provide a breakdown of CNG volume growth in Gujarat versus outside Gujarat?
A: 87% of the CNG volume comes from Gujarat, while 13% is from outside Gujarat.
Q: Are there any plans to increase CNG prices due to the increased cost of gas procurement?
A: Yes, we are evaluating options to increase CNG prices in the near future to offset the increased cost of gas procurement.
Q: What is the current status of the LNG supply contract with British Gas, and are there plans to renew it?
A: The LNG contract with British Gas will expire in mid-2025, and we are currently in discussions for a new LNG contract to replace those volumes.
Q: How do you plan to manage the reduction in APM gas allocation for CNG and domestic segments?
A: The shortfall in APM gas is being compensated by procuring new well gas, which is priced at a premium without the $65 cap.
Q: What is the outlook for EBITDA margins given the recent changes in gas sourcing and pricing?
A: EBITDA margins are expected to be in the range of 5 to 6 going forward, supported by a higher share of CNG in the mix and strategic gas sourcing.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
