Mahanagar Gas reported a 31 percent sequential decline in Q3FY20 profit at Rs 186 crore on revenue of Rs 744 crore that dropped 5 percent compared to September quarter.
At operating level, earnings before interest, tax, depreciation and amortisation (EBITDA) fell 5 percent QoQ to Rs 258 crore and margin contracted 20bps to 34.7 percent in quarter ended December 2019, missing the CNBC-TV18 poll estimates of Rs 271 crore and 35.4 percent respectively.
EBITDA per unit was lower than expectations at Rs 9.2, against the average of estimates of analysts polled by CNBC-TV18 which pegged at Rs 9.6 per unit.
Here are the highlights of Mahanagar Gas’ earnings conference call as compiled by Narnolia Financial Advisors:
Management participants: Sanjib Datta – MD, Deepak Sawant – Deputy MD, SM Ranade – CFO, Rajesh Wagle – Senior VP (Marketing)
The company added 31,006 domestic PNG households connections, and added 74 Industrial & commercial customers. As on 31 Dec 2019, there are total of 3997 industrial & commercial customers.
As on Q3FY20, there are 248 CNG station supplying 7.42 lakh vehicles. The aggregate of steel and PE pipeline network stood at 5513 kilometers.
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In Raigarh GA – the company added 6,000 PNG connections and 13 CNG station is currently operational in this area. CNG sales in Raigarh are at 32 kg per day and are expected to go up as more stations become operational in this area.
The sales volumes have grown by 3 percent YoY. The CNG sales volume grew by 2.4 percent YoY, while PNG (domestic) & PNG (Industrial/ commercial) grew by 6.6 percent and 3 percent respectively. The total PNG volumes grew by 4.8 percent YoY.
The gross margin stood at 56.7 percent in Q3FY20 compared to 49.1 percent in Q3FY19 mainly on account of higher volumes in CNG and PNG connections, better realization and lower cost of spot gas used for industrial & commercial sectors.
The CAPEX for 9MFY20 stood at Rs 300 crore, for the full year- CAPEX is expected to be Rs 450-500 crore. The CAPEX spent on Raigarh is so far Rs 100 crore. The majority of CAPEX is being spent on GA-1 and GA-2.
The volume growth is expected to be slightly higher than this quarter going ahead. The peak volumes expected in Raigarh in the next 3-5 yrs time-frame to be 0.6 MMSCMD.
In the recent Union budget – the government announced to expand the gas grid to 27,000 km from 16,000 km and plans to facilitate transparency in price discovery is likely to strengthen natural gas market in India and support further expansion of CGD.
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