Ladies and gentlemen, good day and welcome to the Adani Total Gas Limited Q2 FY 2025 earnings conference call. As a reminder, all participant lines will be in the listen-only mode, and there will be an opportunity for you to ask questions after the presentation concludes. Should you need assistance during the call, please signal an operator by pressing star then zero on your phone. Please note that this call is being recorded. I now hand the conference over to Mr. Suresh Mangalani, MD and CEO, Adani Total Gas. Thank you, and over to you, sir.
Thank you. Good afternoon, everyone. Let me extend a hearty welcome to all our investors, analysts, funds for taking out their time and participating in today's call on Q2 FY twenty-five results of Adani Total Gas. At the outset, on behalf of entire team, Adani Total Gas, let me wish you all, our shareholders and consumers, a very happy and prosperous Diwali and festive season. I'm pleased to share the operational and financial results of Adani Total Gas for the quarter ending September thirtieth, two thousand and twenty-four. During the quarter, our overall volume rose 15% when compared on year-on-year basis. The double-digit visit increase, which we have delivered, is on account of network expansion, coupled with increase in consumption of PNG by commercial and industrial consumers, due to the stabilization of the gas prices.
In line with our focus of expanding infrastructure network across our geographical area, our steel pipe pipeline infrastructure now stands at one, two, five, one, six, inch -kilometer. Twelve thousand, five hundred and sixteen inch- kilometers. We have been stating this, that this for us is the backbone CGD infrastructure, because this helps us to reach to the large masses to cater PNG to homes, industrial, commercial, and CNG to the transport consumers. We also, during this quarter, added one more LCNG, LNG plant, where the pipelines have been remotely available. This we did it in Lunawada, which is in the Kheda district of Gujarat. Now, with this commissioning, we have three LCNG, LNG plants, in addition to our large number of inch -kilometers of steel pipeline.
This is kind of a virtual infrastructure which we have developed to ensure that we do cater to the PNG and CNG consumers. Our CNG network now has increased to 577, five hundred and seventy-seven stations. Of this, as you have been always noticing, that we have been focusing on developing company-owned, dealer-operated, and dealer-owned, dealer-operated formats, along with our co-located format with our marketing companies. So out of 577, 113, one hundred and thirteen, are in the format of CODO and DODO. Our focus certainly remains to expand both co-located as well as the CODO DODO format, all three format CNG. But if I add the CNG stations of our JV partner, IndianOil-Adani Gas Private Limited, IOAGPL, we are now closer to 1,000 CNG stations in the country.
On the home CNG front, we are now supplying piped natural gas to 8.93 lakh homes, which is almost touching to the 9 lakh homes now, across various geographical area. During this quarter, we added roughly 350 to 400 consumers per day of new homes during this current quarter. If I add home, which has been done by our JV partner, now we are close to 1.06 million homes. On the industrial and commercial consumer side, we have now reached 8,746 consumers of industrial and commercial, which are diversified in various sectors. If I add our JV partners numbers, this is coming closer to 10,000 numbers now. As you all are aware, that we also have two subsidiaries, one on e-mobility side business, another is the biomass business.
On EV charging network, you all will be very happy to note that now we have increased our EV charging points to 1,486, which are open to the public. 1,486, which is across 21 states, 213 cities. Just to bring to your notice that this is way beyond our geographical area. This business is independent of the CGD geographical areas. We are not restricted to that. It is all on merit basis. It could be in our GS, it could be outside our GS, because the EV charging stations are open for anybody to set up across the country, and that is what we are taking full benefit of, that ecosystem. We are progressing well on the plan, and our plan is that in the near future, we want to touch 3,000 charging points soon in the future.
Our focus, as all of you are aware, that we are focusing, identify, and set up an early stage on all strategic locations, like airports, all busy highways, tourist spots, religious spots, and several key places across major cities. This is what is our focus and strategy for EV sector. We have commissioned, you know, we are into the CGD business. We are now on e-mobility side, CGD side, compressed biogas side, Dasna plant, and we have supported development of another plant. Now we are entering into another adjacent business called LNG for transport and mining. So we have commissioned our first LNG station in Tiruppur, which is in Tamil Nadu, and as I'm speaking to you, many LNG stations are at various stages of construction and commission. Let me also give you highlights of our financial numbers.
Our revenue from operations stood at INR 1,315 crore, one thousand three hundred and fifteen crore in this quarter. Our EBITDA stood at INR 313 crore, three hundred and thirteen crore, and our profit after tax stood at INR 178 crore, hundred and seventy-eight crore. You know, besides developing and accelerating infrastructure for our all four businesses, CGD, e-mobility, biomass, and L- LTM, I call it, LNG for transport and mining. This is acronym which it Adani Group has given. It, Adani LNG, company has given to this new business, LTM, L-LNG for transport and mining. Our focus also is to prepare ourself to make sure that we take full benefit of technology, machine learning, and artificial intelligence.
We call it a digital delight, and you'll be very happy to note that 98%, more than 98% I would say, our consumers collection and engagement is coming through now through our homegrown developed application called My Adani Gas App. This is again integrated with our homegrown digital business platform. We have given the name SOUL, S-O-U-L. This is our own name, our own platform, which we got it developed. This is to move Adani Total Gas from various application to one digital platform. You'll be happy, in the short period of time, now 93% of our CNG sale is IoT connected. Internet of Things, we are managing through IoT base in the SOUL platform. It's a digital platform, but IoT connected. Large number of our stations, our DRSS, CNG infrastructure, is also IoT connected now in the SOUL platform.
During the quarter, we'll be very happy, and our CFO is with me, Mr. Parag Parikh, and he'll be happy to respond to any queries. We secured the largest global financing for a CGD distribution company. It's the first time for a CGD company in India by raising $375 million from multiple lenders. And during the course of this call, Parag will give you more detail about this. We plan to utilize this fund to accelerate our network infrastructure development program, which is what has been committed by us to all our consumers, that we will reach on a faster basis to provide them the benefit of PNG and CNG across the country. We have now 34 geographic areas, which includes the Jalandhar recently acquired geographic area.
As you would be aware that, effective sixteenth October, there is a development of reduction in the APM gas allocation, which we receive for CNG, the transport sector, and PNG for home. We call it a PNG-D and CNG-T. There's a 16% less allocation we are currently receiving from sixteenth of October. While we are very closely engaged and monitoring this development, our approach would be that since we have a good diversified gas sourcing portfolio, this has been a part of our strategy for a very long time, that we have been continuously developing our sourcing portfolio, being a intermediary and CGD company catering to the large masses.
We will ensure to remain as a responsible and prudent utility of Adani Group and TotalEnergies, and we'll make sure that we calibrate the price in a manner that balances the interest of the large consumers. In closing, I would like to say that we remain fully committed to playing a leading role in India's energy transition journey by providing affordable and reliable low carbon energy for homes, transportation, industrial and commercial users. I would like to acknowledge and be thankful to all our shareholders, analysts, fund houses, consumers, dealers, media, suppliers, business partners, and all our employees for their interest and continued support. In summary, I just wanted to bring to your notice that Adani Total Gas now is into main CGD business and three adjacent businesses. It supplies CNG to transport sector.
It supplies Piped Natural Gas to homes, commercial and industrial consumers. It is serving the EV charging for EV vehicles of various types, whether two-wheeler or four-wheeler or three-wheelers. Then CGD, which is non-fossil fuel being supplied in large parts of our country. We also sell organic fertilizer, which is being produced at our CGD plant. Our retail brand, we have given Amrit, Harit Amrit is our brand, which we have registered now, and we'll soon start the retailing of the organic fertilizer as well from our CGD plant. And we do LNG for transport, which is basically to cater long-haul trucks, buses. And also, we believe that we will be able to do decarbonization at the mining port ports, which are the mining, which they use lot of diesel.
We are able to cater to the LNG through mobile units. That will also bring this significant contribution in the climate change. Thank you very much for listening me patiently. Thank you.
Thank you very much. We will now begin the question and answer session. Anyone who wishes to ask questions, may press star and one on your touch-tone phone. If you wish to remove yourself from the question queue, then press star and two. Participants are requested to use handsets when asking questions. Ladies and gentlemen, we will wait for a moment while the question queue settles. To ask questions, please press star and one. First question is from Yogesh Patel from Dolat Capital. Please go ahead.
Thanks for taking my question, sir. So my question is related to recent development of APM allocation, which has been cut below 50% to the CNG segment. And it was expected that the CNG price hike in the range of INR 3-INR 5 per kg, but still no price hike. And historically, we have seen a prompt price hike or price cut, if there is any move on the APM side. So whole industry has not taken any price hikes, that's one thing. Any particular reason? That's one question. One more question related to the policy shift. So is there any change in APM gas allocation priority for the sectors? And in long run, over the period of five to seven years, how much APM gas allocation do you expect for the CNG? This is the first question.
I mean, you can raise the second question. Yogesh, first of all, I think I must thank you that you have been, generally, I would say, the first participant raising question, very pertinent, following the sector extremely well. And that benefits a lot of other participants who then drop questions from yourself, because you cover most of their anxieties and questions. So thank you very much. Yes, I think there is, as I said in my opening remarks as well, that there is a reduction of 16% for us, for many it could be different, the companies. A reduction in the CNG. On the home CNG side, government is continuously supporting up to 105% allocation.
For home CNG, to take care of a quarter in between quarter growth as well, so that home consumers are continuously grown as well as supplied with the piped natural gas. On the CNG side, yes, you are right that, we have not increased the price yet, for three reasons. One is, as I said, we believe that there is a responsibility cast upon us to do a little more deep dive, to see what we could do, our self-improvements in our... It pushes us certainly, to now see what layer of OpEx we could optimize, which is what as a management team, we are doing, or what we could absorb and what we could pass on.
So I think it's very important for us to remain as a responsible utility of combined promoters to make sure that we take care of interest of our end consumers. And also in our own interest to make sure that the growth uptaking of the volume which we saw 15% was our last quarter and this quarter also is reasonably a good growth. We'd like to see this growth happening. We don't want to see that our price rise pushes the volume or the growth coming down. All the enthusiasm of OEMs like Maruti, Bajaj and many more should not come down. So we are working on it. You will see the calibrated approach from our side.
Some of the CNGs have already done some increase, maybe it has not been felt, but there has been some increase in the CNG prices by some entities. We are yet to affect it. We are working on it, and we would make sure that we calibrate our approach. The good part is that, as I said, our gas sourcing team, not knowing that this will come down, but certainly they have been working to make sure that we have a balanced and good gas sourcing portfolio. I think that is also helping us to some extent, I would say. But you will see it. When, I couldn't say now, but certainly we are working to calibrate the pricing. So that is what I would currently be able to give you the response.
The second part you said, is there any policy shifting? See, from a priority perspective, you would also know, we would also know through same notification, but today it is a first and the highest priority for CNG and the PNG home, and that continues to remain. I think the fact that it's a very old ONGC nominated field, which is depleting, ONGC is putting a lot of efforts to enhance the recovery through various means, including the new investment. That's the reason, government has started now, new volume, which is coming, they call it intervention volume or the new wells, gas volume. And that pricing, if you know, since you have been following, in the Kirit Parikh also, it was permitted to be 20% premium. So I think government is still giving priority on HPHT, on the CNG and CNG home, the CN price.
Government would give large extent priority on new wells gas also. So I think we are seeing, as I said in my opening remarks, we are closely monitoring this development and how. You know, as much as we, I want to keep the interest of the consumer. I think government is bigger stakeholder. They are always concerned about the last customer who's buying from us.
We are very hopeful that, our engagement, industry's engagement, not our engagement, industry engagement with government and government concern for end consumer, will certainly bring some developments, which should continue to help us to calibrate the pricing, make sure growth continues, interest of consumers is plays a larger role than our, any other things. That is where I don't see any shift in the policy, where reduction is happening because of these factors of depletion of fuel risk.
Well-
I hope I have responded to you.
Yeah, yeah, yeah. Sir, some follow-up question on the same topic. So as you mentioned, that new well gas will be supplied to the CNG. I just wanted to understand the pricing terms of that gas, because someone is saying that a 20% premium to $6.5 per MMBTU, and someone is saying the 20% premium to the calculated APM gas price based upon the average crude basket price for the particular month. So, and already you have started taking that gas into your overall crude basket. So what kind of a pricing you are paying in last eight, 10 days? I just wanted to understand. So is it a 20% premium to $6.5 per MMBTU, or is it a 20% premium to the $7.48 per MMBTU?
No, the good part is you are, your understanding is actually many of us, ourselves, actually. Your understanding and the pulse in the market, actually. But yes, currently, what new well gas we are purchasing through the process which GAIL is running, we are buying at 20% of the basket average price, which is earlier used to be 10%, now it's twelve percent. They are not applying the ceiling currently. Ceiling is not being applied. So 6.5 into 1.2 is not there. It is, instead of a 10%, it's 12%. And whatever price comes, you know, the prices of the basket, the basket is changing, that is the 12% price basket. So that is the price we are receiving.
So, sir, in a hypothetical case, suppose because of any political reason or any reason, the crude goes beyond $100 per barrel or $120 per barrel. In that scenario, for a certain period of one month, one and a half month, two months kind of a period, will you be able to pay like a $15-$20 per MMBTU kind of a price, based upon that average crude price for that particular month? That's one question. And secondly, what we have seen every domestic gas price is capped somewhere, with the help of a different formula that we all of us are aware. So is there any talk going on that there will be a cap on these new well gas pricing?
So, Yog esh bhai, as I told you, you know, like, we are concerned for end consumer as an entity. I think government is much bigger stakeholder, which is concerned or which takes care of the end consumer on pan-India basis. For all the CGD, all our marketing companies, the government has this paramount priority on the top of their mind. So I think hypothetically, we cannot look at it, but, you have seen whenever the situation has arisen, on anything of this nature, I think we have seen the intervention. We saw that Kirit Parikh was one of the intervention which we saw to protect the interest of end consumer. So I think we leave it there. I think, as I said, today, our gas sourcing portfolio is supported to some extent.
Our OpEx, we will see how much we are able to optimize and how much we pass on to the end consumer. We will, we will make sure, and you have seen our track record, even today's result is also in front of you, being a listed entity. Everything of ours is in front of you. I think we are hopefully working that we calibrate in a manner that it takes care of interest of all. So I think we should leave it there. Beyond that, it is difficult that we hypothetically make assumptions of $120, and even if it happens, we have to presume that there will be, you know, there will be some way that we will work out, because end consumer is end consumer. He is the person whose stake, interest has to be taken care of.
One last question from my side. Some news folks are predicting that the CGD and CBG are in a negotiation with the ministry, so some talks are going on the excise duty part. If you could throw some light on this, and any-
See, it is not because of the reduction. I think as, you know, today you have a listening government, listening regulator in the country. That's the reason you see so much reforms happening, so much amendments coming, which is positive for the sectors, for the... Of course, not only for CGD, infrastructure growth. Why it is happening? Because government listens continuously, engages the industry. So this is a continuous dialogue. Industry always keep continuing its, you know, issues, which is, which can work well for the industrial growth, business growth. So all that which you stated, and many more things, which are always part of a larger engagement by the industry with various stakeholders. So it's not necessary that it has arisen because of this, you know, lesser allocation of a gas. This is another thing which has developed.
But, industry CGD has arisen, but again, you have seen so many things happening for us. Lot of positive things holistically, if you see upstream, midstream, downstream, a lot of positive things are also happening.
Thank you, sir, and wish you a happy Diwali.
Thank you, Yogesh bhai. Thank you.
Thank you. Before we take the next question, a reminder to participants, you may press star and one to join the question queue. The next question is from Sabri Hazarika from Emkay Global. Please go ahead.
Yeah, good evening, sir, and congratulations for the resilient performance. So I have a few questions. The first one is, with respect to this, this new well intervention gas, which you are getting. So right now, the allocation is happening just on the flow rate of the whole APM or is there some sort of like... I mean, how the government is deciding, how much gas to give whom?
Okay, so is this the only question, or you want one by one?
No, no, then, second question would be, overall, I mean, the overall outlook over a medium term. So somewhere down the line, I think, we are all moving to a $10 sort of gas regime for the CGD sector also. So under which scenario, I think, the economics, especially versus diesel, for CNG would like, become almost like, it almost become zero. So, what is your thought process over the medium to long-term outlook of CNG versus diesel? And the third one is a bookkeeping question: What would be the share of new CNG in the volume mix of you?
I think you are testing our memory as well, so no problem. I think I will definitely take the output part. But let me hand over to Sir Rahul Bhatia, who is our Head of Business Development Gas Sourcing. He will give you a little more insight about your questions on new wells gas. New wells gas, the way it is being provided to us, is it okay now? I think, Rahul, why don't you comment?
Yeah. Good afternoon, Rahul Bhatia this side. Regarding the new well intervention gas, GAIL has been in discussions and in formal written communication with all the CGD companies right from the, you know, maybe the third week of September, understanding what is the requirement of the CGD entities with regard, with regards to priority segments. And those information has been provided, and based on that requirement of CGD companies, the new well gas has been allocated to the CGD entities with effect of sixteenth of October. Have I been able to answer your question?
Yeah. So there is no definite formula for this. So this is based on the overall negotiation between the companies. So this could keep changing. I mean, how much you'll be getting for this gas, right? If you compare it to, say, spot LNG, it is still cheaper. It could be like $9 right now versus $13-$14 for spot LNG.
Definitely. I wouldn't call it a negotiation. The allocation has been done for a six-month period till the thirty-first of March, 2025. So they've actually looked at what is the requirement, and I think they've aggregated and coordinated the CGD requirement versus the new well intervention volumes which are available, and may have been certified by the DGH till March 2025. Based on that, it's been allocated. So I wouldn't call it a negotiation, but it's an aggregation of the demand of the CGD entities, their deficit requirements, and based on that, the aggregation of the total volumes available.
So 15% that you have sacrificed, you have got back entirely 15% or you got lesser or more than that?
We got almost that amount we got.
That amount you got. Okay, okay. And just to ask you this, this will be like the Indian price for September, and that will be like multiplied by 12%, and that will be the price for October. That way we go, right?
That's correct. That's correct.
Okay, thank you so much for this. Yeah, yeah. Yeah, Suresh, it's for-
Yeah, yeah, yeah. Definitely. I think you also asked the bookkeeping question, Rahul, why don't you... Are you able to respond?
Probably, I think in terms of volume composition, two-thirds is CNG, one-third is PNG for the quarter. Within that one-third of PNG, your answer on what is domestic comprising of the PNG component, it's about 23%.
23%, right? Yeah. Okay, thank you.
Let me now give you the outlook on a medium-term basis. I think as you see, the focus of whether it is a government or whether the regulator is to grow CGD. You also see the OEMs after OEMs focusing on CGD. In fact, the new-- as we are tracking this sector, I'm sure you are tracking also OEM producing the CNG vehicles. We understand and we are seeing the numbers. CNG's vehicle sales are crossing out petrol or diesel sales. I think from our standpoint of view, it is now up to the CGD entities as well to look at its own gas sourcing mechanism, work with the government on continuously having a first priority, which we are sure government will continue to maintain, and at the earliest, as we see the newer gas coming, will give more higher priority to us.
So we still see that reason we are seeing, we went to the ECB, we've arranged the funds, we have our own internal approvals. I think our focus continues to remain on growing infrastructure at accelerated pace, and that gives you confidence that we see CGD. You build a CGD business for a generation. You don't build for two years, five years, ten years and we are seeing, we have today CGD, which are operating for thirty, forty years now, and profitably they are operating, so it's up to perspective and outlook of the investors, and from our perspective, we are looking at is a business which is part of a nation building. It is a business which is for generation, and these hiccups, kind of a small indications here and there, I think it pushes us to do now our own homework as well.
It's why we balance the interest of the consumer, and then we, our industry is engaged with the government. So we still are very optimistic and positive on the, on the mid, on the CGD growth. Anything you want to add?
Okay. Just last one small follow-up. So after this whole thing, all the episode, and you have said that you will continue with your CapEx plans and you are continue to remain bullish on the sector. So if you could give us some margin guidance on an EBITDA or SCM basis after this allocation part and over the next two, three years?
So, Sabri, I think if you noticed while you know there have been times over the last two three years that we have seen price volatility maybe in terms of APM allocations to at times as far as global prices are concerned. I think our purpose is to always you know marry the margin realization and the volume towards what we can see as a consolidated picture of a good outlook. So there are times where we believe a lower margins are still better because it helps us in you know building a solid volume. While there are times where we believe that we may not necessarily see the immediate realization of volume but for that matter the margin per ton allows us to you know maintain our EBITDA.
So that's the calibrated approach that we are referring to, that we've always maintained. If you actually look at in terms of our current margins, our current EBITDA for SCM for this half year is closer towards INR 13. And while, you know, certainly so, as APM allocation has gone down, it will have its own impact as far as EBITDA realization for SCM is concerned. We will continue to keep a calibrated approach. As we said, we have so far not, you know, done any price rise or price pass on to the end consumer. It will remain as a combined between, you know, what we do as far as price pass on is concerned.
At the same time, you know, we are moving into a winter season, one of the better seasons as far as volume offtake concerned, and that's the calibrated approach we'll continue to play. Longer term, if you were to look at in terms of margin realization, largely, CNG has been a contributor in the, of almost close to 65% of the current volumes, which effectively means faster turnaround and a larger contribution. As we proceed, we also see gradually industrial volumes, becoming a significant contributor in the longer run, which would again mean that, there will be a lower margin for SCM, while there will be a larger volume. That's how we should look at it in terms of a picture.
We certainly aim to, you know, remain around the same range of margins that we try to maintain, but it will always remain an approach, balance between volume versus margin.
Got it, sir. Thank you so much for this detailed explanation. Wish you all the best and happy Diwali. Thank you.
Thank you. Thank you. Thank you.
Thank you. Participants who wish to ask questions, please press star and one. Next question is from Kirtan Mehta from BOB Capital Markets. Please go ahead.
Thank you first for this opportunity. Continuing with some similar question, did the sort of the lower allocation or probably the gas basket price from the primary sector has increased up to the stage there or so? And what is the differential that we like to maintain between the diesel and natural gas or in the case of petrol and the natural gas, which will not deter demand, in your view? Would you be able to share some color around it? This is the first question. The second question was, you were referring to sort of doing some homework to see where we can reduce the cost. So could you also give us some more color in terms of the areas where you think the cost savings are possible, based on gas purchase cost as well as OpEx spend?
Good, Kirtan bhai, I think as I was telling Yogesh also, I think you also become part of extended investor and its families. Thank you. I think you have been taking interest in sector as well as for ATGL. Keep continuously keep pushing us to prepare more and more better way for your questions. I think coming to the your first question, the color, what should be the spread which we should leave for the customer to opt for a CNG? I think that's the responsibility on us to maintain, and we are able to do it. We leave reasonably a reasonably spread. It may not be a one generic number which we could give you. Rahul could put some more light on into specifically, but I think we always see both MS as well as diesel.
Sometimes we are depending upon the pricing of a state, being the VAT, et cetera, what do we get from the diesel versus MS. Some states are very closely knit on petrol, diesel price, some there is a good difference. So depending upon the difference, some places we could be closer to diesel, but largely petrol, I think we provide a good difference between CNG and the petrol price. It is reasonably a spread, so that customer continues to, you know, operate. It also will depend, Kirtan bhai, that it's not necessarily the larger spread. It is a combination of a spread which we leave, and the customer's usage of a vehicle. Now, if it's a travel agency, even a smaller spread may give him a good saving.
If I'm an individual as a user car for 30, 40 kilometer, then larger spread may not be giving me good saving. So it depends upon which or how customer behavior is there on utilization, which geography we are in. For example, NCR, perhaps CNG is the way people are using for, you know, climate change and environmental, climate, air quality point of view. So, as I said in my opening remarks, while everybody, you all felt that we should have increased the prices, we still are holding on to make sure that we calibrate in a manner which you all do feel that, yes, we have conducted ourselves more responsive and prudently. Same would be being responsive and prudent by leaving some saving on the table for people to continue to buy CNG vehicle, convert their own vehicle to CNG.
We also do the studies of customer behaviors, the area we are operating, travel agency, how many... Gurgaon, for example, is full of travel agencies. We work with them. We see that there is a convergence. We understand this market. We have been a very old operator in this market, and we have been growing. Our track records suggest that our CNG growth is happening. Even some places we are left little lesser spread, and we may not see that high growth, even if the spread is bit higher in some places. It all depends upon the customers which we are targeting in audience, you know. The second part was the, your part, of course, I will certainly get so that you get much better answer from the person who actually dealing day in and day out on this part.
I gave you a bit more of a generic response, I know, but you'll get more better response from Rahul. On the color on the OpEx, again, I think, we all always believe that there is a scope for improvement in every head of OpEx. We always believe that what we are doing good work on gas sourcing, there is a still scope for doing better work. I think that's the philosophy or that's the management vision that is carrying forward. We could have said there is nothing on OpEx, but we believe once we start laying more deeper hands, there would be, because we've grown significantly in all the geographical areas. So now we have started working, and anyway, we would be working on continuous and improving the OpEx, but this has pushed us more.
We'll be doing more deep dive, and we are hopeful that we'll be able to balance on our saving, gas sourcing, doing much better way, as well as our operational excellence. Digitalization, as you saw, it actually saves the cost. Digitalization certainly helps us to do a lot of OpEx saving and operations and maintenance part and many other areas, billing, collection, recovery. These are the costs for the utility, but we optimize it. Today, I may be taking a little longer. There is not even a single paper bill across the one million and nine lakh customers. Whether CNG station, commercial, industrial, or homes, everybody gets a WhatsApp bill. That's the saving. We don't print the bill, send it by post, or we don't do that, and 98% paying digitally saves the cost.
So, I think this is what we keep working. So by you, I think every component of OpEx, whether it's a logistic, operations, maintenance, any other head, I think it is important for us to make sure that we continually improve and bring excellence for the customer, for whom we're working day and night. Continuously working for our customers who come and widen our base. I think Rahul and Parag may add something. Oh, do you get to do something, add?
I'd just like to add a little some couple of data points, which might give a little bit of comfort, so to actually mention upon the spark spread and the benefit, for example, if you look at Ahmedabad, which is one of our main cities, where the current, you know, CNG price provides a OpEx benefit, daily OpEx benefit of 40% versus petrol, which is a very, very significant amount, and just to also share with you, because we've been over the last 15-20 minutes talking about you know the increased cost because of APM reduction. Even an INR 3 increase in price, INR 3 per kg increase in price of CNG, will actually reduce the benefit from 40% to about 37%, which is still continuing to be extremely attractive for CNG users.
So these are some data points which I want to share with you. Second thing I wanted to mention is that we were looking at the number of, you know, CNG vehicles which have been registered, in India, in Gujarat, which is one of our main areas, in some of our newer areas in, for example, Rajasthan, where we are there in Udaipur and Baroda. So to give you a flavor, the increase in YTD, in the six months of FY 2025, in Gujarat, for example, has been 21% higher than what they were in FY 2024. So while every month in Gujarat, you know, in the last financial year, the number of CNG vehicles which were registered were roughly around 60,000.
We're about ninety-thousand seven hundred per month in Gujarat alone, in these days, as an average for these months. So, you know, pretty much you can see that customers are expecting and are finding continuing to find CNG as very attractive as they move forward.
To add to, I think, on your question on OpEx, then, I think number of initiatives are being done, and the digitalization, moving towards specific tools, is enabling us to continue to improve our OpEx preventive predictive maintenance. At the same time, they're all, you know, enabling us to reduce in terms of O&M, transport, logistics, et cetera. If you actually go by our current numbers, we are at actually about INR 6 per SCM in terms of our OpEx, which, if you see in the first half of this year, we've actually brought it down from INR 8. So those are the types of improvements that we're doing as far as OpEx per SCM is concerned.
Thank you, gentlemen. I hope we have been able to respond to you.
Thank you, sir, for the detailed color and answer. One or two more follow-up, basically. In terms of gas sourcing, would your preference for the oil link contractual entry, looking sort of the oil market is poised for sort of a probably a price reduction from here over the sort of the typical current preference for the US gas-based contract or-
Just again, can you repeat your question, please? Your audio is not that clear, so can't.
Yeah. Is this better now?
Yeah, yeah, yeah, better.
I was asking whether with this change or lower APM allocation, would our preference towards oil-linked contract will increase when we go for gas sourcing or LNG sourcing?
Okay. So I think, I don't think so this one factor will decide which side we move. I think, again, as you said, this is a complex, you know, issue for any gas distribution company, which is intermediately, how to remain relevant in the market all the time for end consumer. I think we may do what we want to do it, but our responsibility is to remain relevant. If I, if I do oil link only, tomorrow, something happens to oil, will I be relevant for the market? Will I expose my balance sheet? I think this is bit of a complex issue, whether allocation was prior one or now, our responsibility is to examine all index risks, all tenures, and also see domestic production, several ceiling prices, gas, and come out with a mix in such a manner that as we have been doing.
As I said, you all have to see the track record that we keep presenting you all, with our gas sourcing costs is always there in the system. We want to remain relevant, so it's not necessary this factor will drive us to suddenly move to the oil linkage. We'll continue to have our focus to see which linkages, which focus of linkages, which tenure of linkages will continue to maintain us as the company which provides customer more affordability in the CNG.
Sure. And one more question was, you referred to the usage of the vehicle. Would you be able to sort of divide vehicles into two classes, where a proportion of the vehicles which are actually in the 40, 50 kilometer range per the usage versus the higher usage?
Rahul, you want to respond? That is more specific for you.
Could you just repeat the question, please?
I was asking in terms of the, out of our total CNG vehicle pool, how many vehicles would be sort of in the lower usage class of 30-40 km per day?
Yeah.
Yeah. You know, we've got actually a mix of GAs. There are certain GAs where there are customers, which are captive customers, and they move within the city, which is something around 40 kilometers per day. And then we have got our newer GAs, where volumes are now increasing and where there is a lot of transit and floating traffic. So if you look at today, you know, maybe we've got about 60%-70% of the total volume may be captive. But as we are moving forward, we are finding that the floating traffic is actually increasing very significantly. Have I been able to answer your question?
Yes, sir. Thank you. Thanks for the support.
Thank you.
Thank you very much. Thank you.
Happy Diwali!
Happy Diwali to you as well. Yeah.
Thank you. Participants who wish to ask questions, please press star and one. Ladies and gentlemen, to ask questions, you may press star and one. The next question is from Ravi, from Avendus Spark. Please go ahead.
Thanks for the opportunity, sir. So my question is on gas sourcing. Could you just help us with the CNG, so your volumes around month-end last quarter? So what was the sourcing mix, APM and other source of gas?
Okay, okay. So I think, as Rahul, I think he's saying, what's the mix of gas? Overall, why don't you on APM, non-APM, something to say? I could not understand because your audio is not that clear.
Sorry, you are asking for the breakup of our APM portfolio, right?
APM to monitoring. Yeah, within the CNG basket, just looking for the sourcing split.
Within the CNG basket. Is it CNG or CBG, you said?
CNG, CNG.
CNG basket, APM, and non-APM, which you bought in. How much is we are getting APM, and rest is non-APM. That's what I think you must be seeing. How much you produce domestic, how much you produce by LNG.
Okay. So, you know, we have hardly any LNG. The proportion that we got is, you know, 50% of our overall volume that we got are about APMs, about 48%. Let me give you an overall perspective. First, out of the overall, about 48% is APM, and now it's sort of very recently gone down by a few percent. And we've got HPHT gas, which is to the tune of almost about 30%. The balance is about, is R-LNG. So in the overall, we've got about 75%-80% is going to be domestic gas. Right?
Understood, sir. But also, on the R-LNG part, so this is, I mean, if you can further break this up into Brent or Henry Hub or spot, so what would be the mix there?
Okay. So we've got majority of that 20% of R-LNG, about 80% of that would be Henry Hub linked. These stable contracts, which are Henry Hub contract, and about, you know, 5% would be Brent linked.
Understood, sir. So now, based on the current, after this current reduction, so the entire shortfall has been replaced with the new well intervention gas. The entire 15.60% shortfall in APM has been replaced with a new well intervention.
Yes, correct. Yes.
Yes, sir. So also going forward, do we see this 30% HPHT that we are taking currently, the overall HPHT could there be a decline in terms of what is available at the country level and would that impact the 30% mix, or how do we see HPHT continuing for us?
We actually see HPHT going up, or the availability going up for us specifically, and there are two reasons for that. Number one, there are a lot of contracts which other entities have signed up with the RIL-BP combined, and they were for four to five years. Those contracts are actually coming to an end in January 2025. So those molecules will actually come up for auction in January 2025, and will be available. And secondly, ONGC is also going to market its its HPHT gas come January or February 2025. So therefore, we are very closely tracking that and hope to be able to contract and take on board more HPHT than we have right now, as per our requirement.
Understood, sir. So in terms of maybe the APM allocation may continue to go down, possibly the rate at which again it was going down earlier. If this continues, what would be our you know approach for you know any shortfall? So it will be more of HPHT, that's how we look at it, or we will increase also slightly our LNG sourcing.
You would be aware that, you know, after about two years, from 2026, 2027 onwards, the liquefaction capacities globally are increasing by about 40%. At that point of time, very attractively priced molecules of LNG are going to be available globally. Therefore, as we see today, the cheapest gas is APM, then new well intervention, and then HPHT. Depending on the decline of APM, we would try to replace it, first of all, by new well intervention and then by HPHT. Then as we move forward, we are very hopeful that the LNG that would be available for 2027 onwards would also be very competitive and could be very near HPHT type levels.
Therefore, we are closely scanning the market and looking at what sort of contracts we could possibly get into, at that point of time, which would be very, you know, competitive and near to our domestic portfolio as we speak.
Understood, sir. Very good. Thank you.
Thank you. Thank you so much.
Thank you. The next question is from Ranita Sethi from Morgan Stanley. Please go ahead.
Hi, sir, Mayank here from Morgan Stanley. Just a bit more long-term questions here, considering I think the gas allocation is one part of the story that you talked about. But in terms of now capital allocation and considering you're building all these new GAs, how are you thinking about a shift in capital allocation under the new gas regime? Which I suppose happened in twenty-twenty-two itself, but like, is there a shift in your capital allocation perspective in ramping up GAs as well as how you're thinking about kind of growing the volumes and sales?
Sure, Mayank, so I think, while, you know, we are seeing this APM reduction on 16th October, and I think as you may have heard, A, you know, we are, of course, hopeful of seeing what happens next as far as the lower allocation is concerned. B, how do we ensure the calibration on price pass on to the consumers? As far as our newer geographies are concerned, a lot of CapEx is yet to be incurred, and our recent sort of financing actually enables us to look at CapEx of over the next 24 months, so I think from a pure capital allocation perspective, at this juncture, we would continue to do so as being planned for the newer geographies of the 7th Round, more so, and continuing where we are at the 9th and 10th Round.
So no change as far as, the CGD capital allocation is concerned. I think what you would only see along with the CGD allocation is, an allocation towards some of the newer businesses that are, you know, becoming. So whether it is on LNG for transport, EV, Bio, so you'll gradually start seeing some capital allocation also there as an add-on. So purely from a CGD perspective, wise we'll do. From a ATGL basket perspective, you will see some portion of that also getting allocated, in its own independence to these three new businesses.
Got it, sir. And sir, I was just sort of thinking from just not the CNG perspective, but from the industrial side as well. How are you kind of thinking about, like, getting at-- on the industrial side, in terms of what you said around 2026, 2027 on LNG prices that you are thinking, how are you thinking in terms of ramp-up there? Could it be faster, slower, or are you saying that it will be pretty much what you had planned for in the last few years?
Yeah, Rahul, Rahul, why don't you...? Yeah.
Sir, what ramp-up are you saying?
I'll just add it, and then Rahul will add it. I think as far as, as far as CapEx is concerned, the base infra network will continue to be set up. So I think to that extent, it does not change as far as the base infra network of CapEx is concerned.
As far as LNG is concerned, I think, to the question on, you know, how we are seeing the C&I side of the network, I think this will continue to build over a period of time. Certainly, so, as you have heard from Rahul, that post 2027, we are expecting global prices to be more attractive, and in a manner that would balance out today, otherwise, what is being procured as HPHT contract for some of the C&I segments. Rahul, would you like to add?
As we feel that the volumes that would be available to us moving forward in terms of the global liquefaction capacities being increased, based on that, the volumes that would be available to us to contract would be very attractive for the C&I customers. Therefore, we feel confident that, you know, we will be able to garner a lot of C&I customers in our newer GA as we move forward.
I think one thing that will happen, Mayank, you know, from a longer term perspective, today, when you look at C&I as a basket from a pure CGD standpoint of view, all said and done, these are relatively shorter contracts. Over increasingly with time, we see a scenario possibly emerging, where on one hand, you have longer term contracts, as far as LNG is concerned, as well as, you know, efforts similarly are being made to tie into the C&I customers on a slightly a longer tenure.
Okay, that's clear. Thank you.
Thank you. Next question is from Harsh Maru from Emkay Global. Please go ahead.
Yeah, thank you. So, sir, my question pertains to the EV station. So right now we have one station and two more in the pipeline. So could you throw some light on the unit economics and the kind of volume traction that you are seeing at this station currently?
Harsh, you referred EV station or LCNG plant? Because that is where... Or LNG station, you said. LNG is one, and we are building up more. Which one you referred to, Harsh?
LNG, LNG.
LNG, sorry, I thought EV. So we have actually, see, what you have seen us, that we try to be bit of an early mover on the opportunities which we see are emerging, whether it was a CNG, EV, and now LTM, which I call it, LNG for Transport and Mining. We see, as we have seen the other parts of the world, and government commitment on climate change, is that they now, they are looking forward, how do we reduce or minimize the use of a diesel for transport? A longer term may, the vision is for hydrogen, of course. But what we see is that one of the immediate solution for this is the LNG for the heavy trucks or the long-haul trucks and buses. So we are seeing traction in policy formulation.
We are seeing, you know, kind of demand kicking now, you know, there is a traction. A couple of things, we are also seeing Indian carbon market this time is also getting developed, plus the European Union having restrictions which are coming on the border adjustment tax, which is coming up from 2026 onwards. That is also pushing pressure on, because European regulations are end-to-end emission, whereas Indian carbon market today is talking about the only the plant-based emissions. It's still, it's not gone on to the end-to-end, but eventually that will happen. So these developments and combined assessment by us is that the LNG for transport and mining could be another big opportunity for us to seize. And in that process, we have set up the first station.
We believe this will deliver a good outcome, whether it is the physical side or the financial side. Today, it's too early for us to look at. It's just we've come in the first station to look at unit profitability. But how the policy formulation takes place, we would certainly see that then it will start providing whether Indian carbon market makes more mandatory, whether European market comes, or how Rahul and team has said, they are also seeking to procure the LNG part. How do we de-risk ourselves when we want to give customer maybe HSD-linked prices or HSD-reference prices?
So we are still developing these entire modules from our side, but we want to just showcase that there is a good opportunity for us, and we want to set up some of the few stations initially to bring the customers to our side, large corporates, large transporters, and we are seeing interest around it. All depends upon what kind of a pricing traction they want to see, stability and pricing they want to see. So we are working on it. We are providing those kind of solutions to the transporters or the corporates who are using heavy trucks and vehicles. So it's too early, but from our assessment, appears to be a good emerging opportunity.
Sir, thank you so much.
Thank you, Harsh.
Thank you very much. That was the last question in queue. I would now like to turn the conference back to the management team for closing comments.
Yeah, thank you. Thank you all the participants for attending the conference call. In case you have any further questions, queries, please do write to us. Thank you very much. Thank you. Have a happy Diwali.
Thank you for this.
Thank you. Thank you to the entire management of ATGL. Thank you, everyone.
Thank you very much. On behalf of Adani Total Gas Limited, that concludes the conference. Thank you for joining us, ladies and gentlemen. You may now disconnect the lines.