Ladies and gentlemen, good day and welcome to the Gujarat Gas Limited's Q1 FY 2026 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 this conference call, please signal an operator by pressing star then zero on your touch-tone phone. Please note that this conference is being recorded. I now hand the conference over to the Company Secretary and Head of Corporate Communication of Gujarat Gas Limited, Mr. Sandeep Dave. Thank you and over to you, Mr. Dave.
Thank you. Good afternoon, everyone. A very warm welcome to the Q1 earnings call of Gujarat Gas Limited. I am Sandeep Dave, Company Secretary and Head of Corporate Communication at GGL. Just to give you an update on our scheme of arrangement, the scheme of arrangement was approved by GSPC Group of Companies on 30th August 2024. The proposed scheme will alleviate the layered structure of GSPC Group, promote business synergies, and unlock value for its stakeholders. The scheme is subject to various statutory and regulatory approvals. We have filed the scheme with BSE and NSE. We also received no objection from BSE and NSE. We also filed the scheme with the Ministry of Corporate Affairs in February 2025. We have requested and we are in continuous touch with MCA to expedite the process.
The matter is under active consideration of the Ministry of Corporate Affairs, and we are expecting approval of the scheme in Q3. Considering the longer than expected time taken in completing the MCA process, we have also simultaneously initiated the process for obtaining approval from other regulatory authorities. Coming back to GGL, to give you a brief background about GGL, GGL is the largest city gas distribution company in India. GGL is operating in 27 geographical areas, spread across six states and one union territory. We have a good mix of mature and emerging CGD areas. We have developed a pipeline network of more than 43,300 km which provides natural gas to approximately 23.02 lakh households, more than 4,425 industrial customers, and approximately 15,700 commercial customers. We also operate 830 CNG stations, serving approximately four lakh vehicles per day.
We are aggressively setting up CNG infrastructure as well as upgrading CNG infrastructure to promote the use of clean and green fuel. We also started injecting biogas into the GGL system. At Gujarat Gas, with the commitment of providing complete energy solution that empowers communities, business, and industries, and with an aim to become a total energy solution provider, the Board of Directors of GGL at its meeting held on 5th August has approved to undertake sourcing and sale of propane, oil, FMOFS, LNG, and LPG to industry customers. This reiterates our commitment towards a customer-centric approach. GGL aims to deliver affordable, reliable, and cleaner energy by operating responsibly and performing with excellence while considering environmental, social, and governance factors. As part of our commitment to ESG initiatives, we have taken various measures, which include hydrogen blending pilot project, which we have completed with 8% blending.
Now we have initiated action for increasing blending level to 50%. We have embarked on a major digitization drive across various business operations and processes. Our major contribution to the environment is by virtue of promoting the use of gas for industry customers. In Q1, we have reduced the burning of approximately 11,242 metric tons of coal per day by providing green fuel. Further, through our CNG sale on various outlets, we have reduced the combustion of approximately 3,290 km s of petrol per day during the current quarter. At Gujarat Gas, we adhere to higher standards of safety and a strong culture of safety. GGL is an ISO certified organization for integrated quality, occupational health, safety, and environment management systems. We build, operate, and maintain a safe and reliable gas network in our areas of operation. With this brief background on GGL, I now request Mr. Dipen Chauhan to share business updates. Over to you, Dipen.
Thank you, Sandeep. Good afternoon, everyone. Let me first update on the domestic and commercial segment. We are seeing a positive growth in the domestic segment. GGL's customer base is now more than 22.85 lakh domestic customers. GGL has added 36,000 commissioned customers in Q1 FY 2026 and registered 39,000 customers in Q1 FY 2026. Importantly, GGL has signed a gas sales agreement with Bhatinda Military Station for the supply of PNG to over 11,300 refrigerated shell quarters and 230 flasks. The commercial segment is showing steady growth in connection numbers. We expect the numbers in the domestic and commercial segment to increase over the period of time as the new areas mature. GGL at present has a customer base of 15,700 commissioned commercial customers. Now, let me update on the industrial segment.
In the industrial segment, sales volume was 4.71 MMSCMD for quarter ended 30th June 2025, whereas the sales volume during the previous quarter was 5.03 MMSCMD. The overall decrease yielded 6%. As anticipated during the last earnings call, the reduction was mainly in MRV volumes where customers opted to shift to propane from natural gas due to higher price differential. The average MRV volume was 2.51 MMSCMD and non-MRV volume was 2.20 MMSCMD. The MRV volume reduced from 2.87 MMSCMD in Q4 FY25 to 2.51 MMSCMD in Q1 FY25. The non-MRV volume of 2.20 MMSCMD for quarter ended 30th June 2025 has grown from 2.16 MMSCMD during the previous quarter. That is an increase of approximately 2%. The non-MRV volume has grown by approximately 8% in the same period in the previous financial year.
The reduction in spot RLNG prices and crude prices during the quarter enabled GGL to reduce the prices in the industrial segment. The reduction also enabled GGL to maintain the price differential to propane, that is, natural gas premium by INR 3.50 per SCM. The natural gas demand in MRV is likely to remain low on account of the upcoming Janmashtami festival in this quarter. In addition, persistent uncertainties related to tariffs and geopolitical dynamics continue to cloud the overall business outlook. We continue to monitor the various aspects affecting the volumes, namely price movements of spot RLNG and alternate fuels and consumer goods demand across all our operating areas and shall adjust to such market dynamics so as to maintain balance between margins and volumes. Now, let me update on the CNG segment.
GGL reported a strong performance in Q1 FY 2026, driven by robust growth in CNG volumes and expanding infrastructure. CNG sales rose by 12% year- over- year, with Gujarat recording a 10% increase and areas outside Gujarat delivering a notable 27% growth, underscoring GGL's success in deepening its presence across geographies. As of June 2025, the CNG vehicle delays across GGL's network reached approximately 1.565 million compared to 1.36`3 million a year earlier, reflecting a solid 15% growth. CNG continues to operate with a compelling economic advantage, being approximately 45% cheaper than petrol and 23% cheaper than diesel, further reinforcing its attractiveness amid volatile fuel prices. During the quarter, GGL commissioned three new CNG stations, supporting its commitment to expanding reach and improving accessibility. CNG sales volume touched a record high of 3.72 million CMD, highlighting sustained demand momentum.
Looking ahead, GGL is well-positioned to capitalize on the increasing shift towards cleaner energy. With ongoing infrastructure development, a growing CNG vehicle base, and strong customer adoption, the company remains confident in maintaining its growth trajectory and strengthening its leadership segment. Finally, I'm happy to update that during Q1, we marked a significant milestone in our company's digital transformation journey also. With a soft focus on innovation and operational excellence, we go forward merger. We have planned to strategically expand our enterprise resource planning ecosystem to incorporate additional key business functions and achieve the benefit of seamless integration across verticals. Along with this, the planned technology transformation of ERP will help to leverage advancements in AI-powered analytics and enhance decision-making and risk management capabilities. On the operations front, we have drawn a blueprint for implementing a robust and secure SCADA system to enable centralized monitoring and control across all geographies.
This scalable, agile infrastructure is designed to support our evolving business dynamics and ensure responsiveness in a rapidly shifting global era. Thank you very much. Now I'll request our CFO, Rajesh Sivadasan, to take over.
Thank you, Dipen. Good evening ladies and gentlemen, I welcome you to the earnings call for the first quarter of the financial year 2025-2026. I'd like you all to thank you all for attending the call today. I trust you would have gone through the financial results for the quarter ended 30th June, along with the presentations which we have uploaded on the website and the stock exchange. During the quarter, the company connected close to 35,000 new domestic connections, making the total PNG domestic connections more than 2.3 million. During this quarter, the company also invested close to INR 1.21 crore billion into the gas infrastructure.
The company is also planning to incur an annual CapEx in the range of INR 800 crore- INR 1,000 crore in this financial year. In terms of revenue of the company, which has registered, the revenue from operations stood at INR 4,615 crore during this first quarter, against INR 4,065 crore in the corresponding quarter of the previous year. The company registered an EBITDA of INR 574 crore in the first quarter, against INR 574 crore in the corresponding quarter of the previous year. The profit after tax stood at INR 327 crore in the first quarter compared to INR 330 crore in the corresponding quarter of the previous year. The company's Rupee-per-SCM EBITDA margin for this quarter stood at INR 7.17 crore against INR 5.75 crore in the previous quarter.
The company's estimated EBITDA margin will be in the range of INR 4.5 crore- INR 5.5 crore for this current financial year. During the first quarter, the company has received around 100% allocation towards the domestic segment and 41% allocation to the CNG segment. Thus, we have an overall allocation of 51% to the priority segment of the government. The EPM shortfall was met by the New Well Gas, the HPHT Gas, the long-term and the spot volumes. Gujarat Gas Limited continues to have a credit rating of AAA stable and a short-term rating of A1+ from CRISIL and India Ratings. Further, as requested by the investors, we have also uploaded the 12-monthly results of GSPC on GSPC's website. We now open the floor for Q&A session.
Thank you very much. We will now begin the question- and- answer session. Anyone who wishes to ask a question may press star and one on their touchstone telephone. If you wish to remove yourself from the question queue, you may press star and two. Participants are requested to use hands up while asking a question. Ladies and gentlemen, we will wait for a moment while the question queue assembles. The first question is from the line of Probal Sen from ICICI Securities. Please go ahead.
Thank you for the opportunity, sir. I have three questions. Firstly, you just mentioned about the sourcing, Rajesh, that 51% of your priority sector sales was met by APM. Can we get an overall percentage breakup in terms of sourcing of 8.88 MMSCMD that we have done? Overall, how much gas is being sourced from, you know, which sourcing percentage terms are in volume terms of whatever is available? That was my first question.
Coming to your question, the gas from short-term contracts is basically 34%. Long-term contracts is 38%, and the rest is all domestic gas. The majority of them are coming from PNG and New Well Gas.
How much of HPHT gas did we get in this quarter? Hello, am I audible?
Yeah, yeah, yeah.
Yes, sir, you are.
Close to 0.7 MMSCMD.
HPHT.
Right.
HPHT, yes.
Correct.
Right. So the 51% shortfall that you mentioned, sir, would have been HPHT 0.7, 51% from APM, and the balance would be from New Well Gas. Is that okay for me to look at it? Hello?
Can you repeat?
You said that, sir, on a blended basis, 51% of priority gas was from PNG, and you just mentioned HPHT was about 0.7. The balance would have been from the New Well Gas. Is that a fair way to look at it?
Yeah, New World and spot also.
Got it. Fair enough. The second question was, sir, about this new business initiative, the propane sourcing and sale that we are looking to do. I just wanted to understand, sir, how will this business model work and what sort of commercials are we looking at in terms of, you know, what is the advantage that we are bringing in when other players are also already there that are selling and sourcing propane, particularly in the Morbi region? If you can just throw some more light on this.
the current consumption in the MRV region is close to gas equivalent, if you see, is close to 7, 7.5 million, out of which 1/3 is gas and 2/3 is propane. The total propane market, if you see, is close to around 1,167,000 metric tons per month. We are basically targeting close to 25% of this market. What we intend to do is basically we want to become an integrated energy supplier for all their energy needs, so they don't have to shift from one supplier to the other. The advantage that we think we can bring is basically we can help them reduce their working capital requirement since they already have some financial security already provided to us, which we can use if they are selling propane to them. They don't have to, you know, basically rush to other suppliers with the advanced money and all those stuff.
We are targeting.
Sorry to interrupt. The market that we are trying to.
Yeah.
Sorry, please go ahead.
No, sir. You go ahead, sir. I'll come back. I mean, please finish your answer. Sorry.
Basically, we are targeting a market close to 2`5% of the total market for the initial few months, maybe this financial year ending. Depending on what our experience is, we can then scale it up further.
Where you will need some of this propane from, sir, will you be basically contracting with the overseas or importing it directly? How will it work, sir?
We'll be importing it directly from the international markets.
Okay. Our pricing will therefore be competitive with any other supplier in the market?
That's our strength. Basically, we have been sourcing `LNG since long, good years this year, obviously. That's our strength, and we hope to get propane from the international market at a lower price, which we can use to compete in the markets.
Right. Last question, if I may squeeze in one more. You mentioned about the uncertain demand environment overall at Morbi itself. Given that that continues to be there, any guidance you would like to give on volumes specifically for Morbi going forward for the next few quarters? An overall exit rate if you want to tell us for FY 2026 for the company?
I think we are reviewing the market. We continue to look at the market, but I think it's difficult to guess as to what the number would be. We continue to look at it. That's how as of now we can put it this way.
No problem, sir. Thank you so much for the detailed answers. Very, very helpful. I'll come back on the end of it. Thank you.
Thank you. Our next question is from the line of Yogesh Patil from Dolat Capital. Please go ahead.
Thanks for taking my question, sir. Sir, as you mentioned, the current volumes of the Morbi region on the propane side are the 5 M`MSCMD. What we are targeting as Gujarat Gas is 25% of that. 1.2 MMSCMD , 1.3 MMSCMD is the right volume to assume for the remaining period of FY 2026. Is that a correct understanding?
For propane?
Yeah.
Yes.
All right. Sir, if possible, what would be the margins on the propane distribution? That's one. Are you planning to do some CapEx in building this propane or LPG supply chain?
There is no CapEx involved in this entire exercise that we are planning, except booking for some capacities in the terminals. There is no CapEx involved.
Okay. Any guidance or any ballpark number if you could give us on the margin side, what kind of margins you will make on the distribution of propane?
is difficult to guess since we are entering this business for the first time. Difficult to give any numbers right now.
Will it be better than PNG Industrial? Will it be lower than PNG Industrial?
It would be difficult to comment on margin at this juncture. I think we will see. It will evolve over a period of time. Probably it will be better to comment on margin once we get a good grasp of the market.
Sir, your PNG industrial business has marketing and infrastructure exclusivity.
That's correct.
You are entering into the propane distribution business where more than five players are already there. Apart from the working capital, is there any strategy where you can play and really gain the market share inside the Morbi region?
I think it's not only the Morbi region we are looking at. I think propane is being consumed by not only the Morbi region, other areas also. Let's think unfold into the future. We'll get back to you in the next quarter. By that time we'll be trying to sell the gas, sell propane in the market, or we'll be having better clarity in terms of the margins, etc. I think that would be the right time to tell you what strategy we are adopting.
Okay. Last one, sir. Have you applied for the propane distribution license towards the regulator? Any updates on that side?
We have to get a credit rating from the agency which we have bought.
Okay. Thanks, sir. Thanks.
Thank you. Our next question is from the line of Maulik Patel from HSBC Securities. Please go ahead.
Thanks for the opportunity. A couple of questions. Can you just touch on the GSPC performance in Q1 FY 2026? What kind of volume did on the trading side and trading profit or the PAT at the GSPC?
Malik, we are yet to go to the board with respect to that. Mostly, it will be end of this month. Once that is there, it will be available in the website once we have the board approves it.
Got it. The second question is on this long-term volume we have from the Ras Gas and BG. I understand that there is significant delivery that happened in one of the contracts, and the pricing in one of the contracts has come down. Also, you recently reduced the price in Morbi by almost INR 33.3 crore per FTM. Will this both offset each other? The reduction in the Niji contract and the price reduction in Morbi, will this offset each other?
I think both are not related as such, but the reduction in selling prices is more on account of reduction in crude prices as well. Obviously, we have to link our selling price to the alternate fuel, which is propane in this case. I think, yeah, that's my answer to your question right now.
Okay. In a way, currently the propane for this September month is significantly lower at about $520 per ton compared to $580 and $590 it used to be for the month of August. The next two months, there is going to be likely a volume pressure in the Morbi region. You did around 2.5 MMSCMD in Q1, right? Q2 is likely to be lower than that. I presume you and the propane will see a significant sharp correction. Plus, the seasonality is also there because in this August-September month, there will be generally some kind of a production shutdown because of the festival. Q2 volume will be lower than Q1, right?
Q2 volumes would be, yes, lower too because of the March fee and then the slowdown because of festivals and all.
Okay. What's your view on the non-Morbi volume? I think it has been steady around 2.2 MMSCMD kind of a number, right? It's been moving up well. Do you see any kind of incremental growth in non-Morbi volume?
Yes, I think we are seeing a good uptick in non-Morb volumes. We are in touch with various bigger kind of consumers, bigger kind of consumers whom we are now targeting them with some fixed-term contracts rather than having contracts which had termination provisions. We are going for long-term contracts in non-Morbi region, like Vapi, Balchad, and other places. We are in touch with certain bulk consumers, and I think we can see a strong growth in non-Morbi region.
Got it. Got it. Just two last questions on the CNG side. What's the progress on that scheme? I think I understand that it was some 60 CNG or 70 CNG stations come under this POU scheme, right? If I say that over this quarter and in Q1, only two additional stations have been set up, right? At the same time, the volume growth, or probably if I look at YoY, it's again around 20 CNG , 30 CNG stations have been added. If I look at the growth, it has been very strong. It's almost around 11% kind of under the CNG volume growth. Is it more that the efficiency is coming into the picture in terms of a higher throughput at the CNG stations, which is driving this growth?
Yes, please. The most important thing is increasing the number of CNG vehicles in the state. I think almost nearly 200,000 vehicles have been added in the last few months, or I can say one year. In the same way, we are adding more and more CNG infrastructure also. There's good asset utilization in existing stations, and with these new CNG stations that are coming up, we are expecting that vehicle growth will be better than even whatever happened in the last year.
You mean to say that last year we did around 11% kind of CNG growth? The FY 2026 CNG growth can be higher than that?
That is possible because we are planning to add under the FDOTO scheme. We have 70-odd stations that are almost in the process of construction. I think before this December, we'll be able to add at least double-digit CNG stations under this scheme.
Got it. Okay. Thank you.
Thank you. Our next question is from the line of Amit Murarka from Axis Capital. Please go ahead.
Hi, Ayat. Thanks for the opportunity. Just to be very clear, MRV you said would be lower in Q2 than Q1. What would be generally the expected run rate?
Can you get back? I cannot get the point.
You said Q2 Morbi volume is lower than Q1. Q1 was 2.51 MMSCMD, as you said. Could you just give guidance as to what is the number that we can expect on Q1 and Q2 based on the current run rate that you see?
It would be in the range of 2.3 MMSCMD- 2.5 MMSCMD.
Sure. Also, like industrial price, I think has been cut by about 3.5%. What is the price right now after this cut?
43.330 MMSCMD.
Essentially, like because I was just wondering that basically pre-cut you were at 46.8 MMSCMD, which is more or less flat as Q1 was flat at Q4. Even CNG and domestic CNG were flat in Q1 to Q4. I was wondering, like the realization had a bit of a drop on a Q2 basis. What would that be on account of then?
I think realization was more in this quarter.
I don't know because if I do kind of revenue divide, I assume I get a lower realization.
I don't think so.
Okay. Fine. Sure. Just lastly, on GSPC Group, could you get FY 2025 financials?
It’s already in the website.
Sure, I'll just take a look. Thank you so much.
Thank you. Our next question is from the line of S. Ramesh from Nirmal Bang Equities. Please go ahead.
Good evening, and thank you very much for the call. If you are looking at the LPG propane distribution business, have you got the line of sight in terms of sourcing and the customers who are actually willing to give you a contract? How is that progressing?
Basically, we are in touch with various international suppliers for sourcing propane. As far as customer base is concerned, those are our existing customers, and we are very confident that if we are sourcing propane.
Okay. If you look at your slide 12 and 14, I have some questions there. The slide 12 gives the details of the spread of the geographic areas. Can you tell us in terms of the potential for ramp-up in volumes in the next two years, which are the GAs or areas where you see growth potential and which are the areas where you see, I think, ramp-up to EBITDA, breakeven, and cost share contribution to earnings? Hello?
Yes, sir. Ladies and gentlemen, the line for the management has been disconnected. Please stay connected until we reconnect them. Ladies and gentlemen, the line for the management has been reconnected. Ramesh, sir, please go ahead. You can continue. The management line is connected now.
Yeah, I think the call got disconnected when we were discussing the LPG and propane sourcing. We can get back there. I had a couple of questions on slide 12 and 14. In slide 12, you have given the breakup of the GAs across the 27 GAs and the different cities. Can you give us a sense in terms of where you expect a quick ramp-up in terms of, you know, volumes or peak volumes, what is the number, and which are the areas where you see profitable operations in the next one or two years? The second question is on slide 14 where you have given data on the DODO franchisee stations. In the past, whatever franchisee stations you have had, how much of CNG volume is coming from these franchisee stations and what is the distribution cost for the existing franchisee stations? These are the two thoughts I would like to have from you.
Will you please repeat the last question?
Yeah. The first question was on slide 12 across the different GAs. The second question was on slide 14 where you have given the breakup of the different types of CNG outlets. It includes the franchisee outlet, which I presume will be similar to your DODO outlet. If you can share the current performance of these franchisee outlets in terms of the share of the CNG volume and what are the kind of distribution costs you have for these franchisee outlets, it will be useful to assess how the ramp-up in the DODO stations will help you in terms of volume growth and the cost of that business. There is a.
I'll just share the distribution of the station. If you see that.
Beyond the distribution of the CNG, what I'm asking is in these franchisee stations of 95 say in 2024 and 104 in 2025, what is the per kg CNG volume or the overall aggregate volume we're doing? What are the distribution costs for these specific stations compared to your overall distribution cost? That will help us get some idea about the cost of the DODO station, how we can generate some earnings and cash flows from that, right? Just to understand the economics of the current franchisee model.
I think the current franchisee model runs on a commission basis on the sale of CNG, which happens over there. The pricing is in the range of INR 3 crore- INR 4 crore per kg. That's what commission we are giving to the franchisee. For the OMC, also the model is the commission is the same. In the DODO scheme, where CapEx and OPEX are both by the franchisee, we are giving INR 8 per kg for the online station and nearly INR 10 crore for the DODO Booster station.
Okay. These existing franchisee stations, what will be the CNG volume per day or aggregate volume for the quarter? Can you just share that with us for the existing franchisee stations?
We don't have the exact specified for the franchisee, but on an overall basis, we average around 3,000 kg per day.
Will it be similar to that in terms of the location?
For the new FDOTO people coming in, they have looked at it in those range only. That's from INR 2,000 crore- INR 3,000 crore was the starting for them, and then going forward, increasing based on the traffic which is there.
If you go back to that slide 12 question, you can give us some thought in terms of where do you expect the biggest bang for the buck on the growth in CNG and PNG across these 27 GAs? In terms of over the next two years, where is the visibility and what is the kind of ramp-up in terms of EBITDA, breakeven, and progressively, you know, profitable operations? Where do you see that happening across the GAs?
You are asking too many things in one thing, but I will just try to summarize that. Basically, the growth is practically happening in the Amdod rural area, the Thane area, and the Dahej and the Surat areas, wherein the CNG practically we are getting a much bigger growth than more than 10- 15% growth is happening over there. With respect to the margins, yes, we'll be having the, you know, the margins which we are running on the CNG. That margins will be protecting those margins going forward. Yes, the APM gas allocation will definitely affect the EBITDA margins going forward.
Sorry, please go ahead.
No, if you tell me.
If you look at the current CapEx and the commercialization of the GAs and the increase in depreciation, when do you think you'll be able to generate EBITDA to cover the depreciation and generate positive ROC double digits across all the 27 GAs? What is the timeline one should expect?
No, I think we have, with respect to the CNG stations, we cover it between three to four years. We cover the, or that the part for the cocoa stations. I see in the franchising model, the rest of the things are ours. In the OMC model, that's that. The different models and different models have different ROEs and the payback periods.
No, I'm not asking for the model. I'm asking for the new GAs. Are you committing a lot of CapEx? Because your depreciation will go up right once they are commercialized. From the time you commercialize, what is the timeline when do you expect to get the double-digit ROC?
I think it will take four to five years because these are all, for example, in the Punjab area and we are new developing areas. We expect that three to four, three to five years is the time period wherein we will be able to recover the things.
Thank you very much. We'll share all the questions.
Thanks.
Thank you. Our next question is from the line of Achal Shah from Ambit Capital. Please go ahead.
Sorry, am I audible?
Yes, sir, you're audible.
I just wanted to know that since currently propane is favorable, but if RLNG is favorable in the long run, what could be the industrial volumes? Where could the industrial volumes reach a ballpark figure in MMCMD?
If the LNG is favorable, which we hope it to be very soon, I think we can easily do 6 million in Morbi and close to 2.5 million in non-Morbi.
Got it. Sir, like shifting would take some time. When RLNG becomes attractive, how much time would it take if it continues to remain attractive for six months, one year, or two years? That volumes will start increasing from next month onwards, or it would take some time?
I think in the short term, there could be some issues, but I think we expect a lot of new LNG supplies coming into the market from countries like Qatar, U.S., and Mozambique, and other countries. That will increase the supply and basically put downward pressure on the prices. We are hopeful. I think in the shorter term, there are some issues, but I think we are hopeful that very soon we will be reaching new, I mean, we will be basically able to sell more in Morbi and non-Morbi regions.
Got it. Sir, just a second, and then last question, is this press release by PNGRB where they have reduced three zones to two zones. What will be the impact, if positive or negative, for Gujarat Gas on margin?
Based on the present tariff you are talking?
Currently, there are three zones for tariffs for transportation that will, after a few months, move to two zones. After that, what will be the impact on our margins since some volumes will go to zone one and zone one rates will increase, which will be expensive in zone two? Have you done any of such analysis?
No, see, for us, based on the present tariffs which are there, there will be a positive impact for us.
Sir, I'm assuming a majority of our volumes are currently in zone two, is it?
Yeah, it is in zone two. Right.
Eventually, that will go to the new zone one, which will have a lower tariff than the current zone two.
Yeah, after this has changed, 42% will be in zone one and 46% will be in zone two.
Currently, what is the breakup?
It's 14, 53, and 21.
Okay. Got it, sir. Thanks, sir. Thanks.
Thank you. The next question is from the line of Varatharajan Sivasankaran from Antique Limited. Please go ahead.
Thanks for the opportunity. Sir, if you see the last few quarters, the addition in terms of outlets has driven significantly. You have been talking about th and other models and 200 outlets being currently open or three and so on and so forth. We are not seeing the momentum pickup in terms of outlet addition. If you can give some visibility on that.
Actually, CNG station equipment and infrastructure is a bit, if you see the number of permissions and everything is required. When most of th franchisees are doing it for the first time and the company is providing all the support to put the application in, that's the reason it's why going through. Right now, out of 70 odd documents, which we have already signed, 52 applications already submitted and 43 approvals we have already received means those franchisees. I think, as I mentioned earlier in this conversation, that we will see double-digit addition in the CNG station under this scheme before December.
My second question was actually I see the top pointed out as well, answering this question. That you are confident about the global gas crisis, LNG crisis coming up. Why even consider this option of getting into LPG or propane product? Because then it will be more expensive than the LNG. There is no market in that respect. That's how also you mentioned that in Morbi, if things fall in place, we'll be able to produce some of our CNG. Why even consider this as an option?
In the short term, I also mentioned that in the short term, there are some issues. We see some of our customers go to other suppliers for propane. We want to be a single supplier, a single energy supplier for our customers. If there is some money to be made there, why not? I mean, we could be, you know, that money is there lying on the table. We should be able to grab it. Maybe it is for the short term, but we should be there to grab that opportunity.
Right. Right.
Thank you. Next question is from the line of Mayank Maheshwari from Morgan Stanley. Please go ahead.
Sir, thank you for the call. I think the question was more related on the strategy on LPG. I get your point around the single energy supplier. I think, if I look at historically, you have been a bit more wary about signing long-term supply contracts even on LNG. For LPG, do you think you will be buying spot or you will be even trying to get those one-year contracts which are currently there in the market if you buy from Saudi Aramco, etc.? I think we are basically right now looking at spot only because pricing, if you see in the propane market, is basically previous month, how did you see? We are basically looking at spot only as of now. On the gas side, we are looking at definitely signing.
Pardon?
Go ahead. On the gas side, definitely we are looking at signing long-term contracts for a major share of the market.
Is there a number in your mind that you think over the next five years you want to kind of have in terms of long-term LNG contracts?
As I said, I think we should be covering almost 2/3 of the market with the long-term contracts.
Okay. Sir, on the LPG point, you said that you'll be buying spots. In terms of getting LPG even from the Middle East, I think you need tankers and all that stuff. You will be doing that also spot fixing, or you are kind of trying to get at least the logistics side on a more long-term basis?
There are contracts which are available on the gas basis delivered to Indian ports. Once we get the gas supplies, I think the rest of the infrastructure is already there.
Got it. Sir, the last question was on CNG. If you look at it in terms of CNG margins as well implied in your numbers, I think there is some pressure there. Is that largely because of the DODO coming in, or is there something else that we should be worried about?
No, the margin is basically affected because we have increased the commission, okay, of the OMC. That's the only reason. Otherwise, the CNG business, we are quite bullish about it.
On a night-to-night basis, you have not seen any compression in CNG margins?
Not yet.
That's only what we're talking about.
No, the APM, see, ultimately, the APM shortfall is being met through the spot and the other sources of gas. Automatically, that margin will be affected.
Okay. That's what I wanted to check. Quarter on quarter, I thought the APM numbers are reasonably similar, not very different.
No, it is reduced. We only have a 48% allocation. Yeah, yeah.
Yeah, okay. Got it. Thank you.
Thank you. Next question is from the line of Hardik Solanki from ICICI Securities. Please go ahead.
Thanks for the opportunity, sir. Two questions. One is, what was the GSPC volume for FY 2025? What was the cash and cash equivalent as on March 2025?
We achieved a volume of close to 12.450 MMSCMD for the previous year, 2024/2025.
Cash and cash equivalent?
It would be close to INR 2,300 crore per something.
Approximately similar to the last year, right?
Yeah. Yeah.
What was the propane-to-industrial gas price discount in Q1? What is it currently after the price cut?
I think it has remained almost the same because the propane prices have also come down.
What is the discount at the moment?
Yeah, it's close to INR 4 crore. After the price cut, it's close to INR 4 crore.
Okay. Okay. That's really helpful. Thank you.
Thank you. Our next follow-up question is from the line of Yogesh Patil from Dolat Capital. Please go ahead.
Thanks for an opportunity again, sir. Sir, if you could give us some gas sourcing details in MMSCMD unit terms. Now, what we know, HPHT of 0.7 MMSCMD, DG volume, which is crude LNG contracted 2.5 MMSCMD , and Qatar is closer to 1 MMSCMD. Apart from that, if you could give us APM volume and WG volume and any spot which you have purchased during the quarter, that would be helpful.
I think Dipen Chauhan mentioned about the same percentage earlier of the 8.8% breakup he has already told you, told the consumers.
Our long-term gas sourcing contracts for the DG are due for renewal in this calendar year. When can we get any update on this side?
As of now, we have extended the contracts, basically till March 2026. After that, we'll be renewing the contracts again.
Yeah, please go ahead.
After signing.
Thank you. Our next question is from the line of Nitin Tiwari from PhillipCapital India . Please go ahead.
Hi, sir. Thanks for the opportunity. I basically couldn't tell the margin that we spoke about, the extreme margin or the dealer margin that we offer in CNG. That's where that adjusted. Is it still in our cost or in the top line?
Which margin are you talking about?
The dealer margin, sir. The INR 3 crore- INR 4 crore margin that you indicated, the INR 4 crore per kg, part of operational cost. That is part of operational cost. That's not in the slide. It's the top line.
Yeah.
Okay. In this, sir, basically, the price discount that you said about between propane and natural gas in the Morbi region, can you give that to us in previously relevant terms? What is our pricing in, say, INR per unit we choose in Morbi versus with propane? What is the price discount?
Okay. What we told was in SCM, rupees per SCM.
Right.
Yeah, basically, the gas prices are close to INR 44 crore today against the propane energy equivalent price of INR 40 crore per SCM.
Its price is INR 4.00 crore. Oh, that's INR 3.00 crore per SCM. I was actually looking for that data in MMBTU terms. If you can help us with that in terms of what is the price in INR per MMBTU for propane and natural gas engines, what is the gap? I suppose you're billing with the INR per MMBTU, right?
Yes. Yeah.
What is the price in rupees per MMBTU for natural gas and for propane?
Just give us a minute.
I know INR 44 crore.
In the meantime, I'll just let you know a few things. This is about the realization on overall basis that I mean, if you look at your revenue sort of divided by the volume that we have in this quarter. If we, I suppose, account for other price points, which is your industrial and the price point that you are charging in the Morbi region, and then try and have an understanding of how much our CNG realization would be in this quarter, that's actually lower than the headline price. That's why I was asking whether our dealer margins are adjusted against the headline price or is it adjusted against the operating cost. That is what I'm just going to.
Yeah, it was included as a part of the operating cost. It is not the top line we changed.
Top line is charged if your, suppose if your CNG price is high, INR 17 crore-INR 79 crore. You're going to charge your, I mean, your top line mostly, basically, if you count it at INR 79 crore and more.
Yeah, yeah.
All right.
You need to write that.
Yeah, we can check the price to give you just an update.
Sorry, INR 13,232.7 crore per MMBTU would be the gas price. INR 1,207 crore would be the propane price.
Sorry, 1,207 crore?
07.
These are the current prices you just gave us.
Yeah, right.
Okay.
Thank you.
Thank you. Our next question is from the line of Somaiah V from Avendus Park. Please go ahead.
Thanks for the opportunity. I've got a question on the margin. On the opening margin, you mentioned there are outlook in terms of 4.5- 5.5% at this year.
Sorry to interrupt, Somay sir. Your voice is sounding very muffled.
Yeah, it's better now.
Yes, sir, now it's better. Please go ahead.
Thank you. My first question is on the margin. In the opening remarks, we said in terms of this year, we are looking at INR 4.5 crore-INR 5.5 crore for this year. We've had a good start in Q1. I just wanted to understand what are we looking for the next nine months? I mean, why at INR 4.5 crore-INR 5.5 crore? I just wanted to share your thoughts.
No, I think there's an uncertainty with receipt. Q2 is always difficult with respect to the festivals coming in. The propane prices, the differential is also moving. That's the reason to hold the market. We have reduced the prices. I think the correction in the guidance will come by Q3. Let's see how Q2 goes. Subsequently, we'll take a view on that.
This was just one clarification here. This does not include any impact of the propane marketing that we want to undertake, right? I mean.
Nothing to do.
Got it, sir. Second question, in terms of the existing propane supply in the region, is the industry currently being domestically sourced propane, or is there also kind of imported propane?
It is actually a mix of domestic and import, but generally, it is more on the import side.
All right, sir. I'm just trying to go back to earlier point. One, working capital is one advantage that you were mentioning. Anything else? It is going to be more on the import side. I think from a logistics angle, I don't see an advantage. Is there anything else that we can have as an advantage where we can try and get back to this 25% of the market share in propane?
I think the difference would be who does the sourcing better. That would be basically the advantage would lie with them.
Okay, sir. Last question. In terms of existing infrastructure in Morbi for propane, of the total units, I mean, to what extent you know the propane infrastructure will be there? Or say we put it the other way, how many units of total use in overall units, which is still only dependent on gas and don't have propane infrastructure?
Almost 1- 1.5 million equivalent gas consumers are only on gas. Basically, 370 units are only on gas, and 530 units have these dual systems. They can use gas. They can use propane as well.
Understood, sir. Thank you, sir. Sir, one small clarification here. You did mention 1.5 MMSCMD. We have ended up selling 2.6 MMSCMD , now this extra 1 MMSCMD, though they have an option to switch to propane, the reason for being with gas, is it because they're being tied with some contracts with us and they have to kind of continue to use it? The stickiness of this extra 1 MMSCMD, just want to understand that.
It's not because of the contracts. It's because many of these are export-oriented units. With gas, they achieve certain kind of clarity or whatever you call in terms of quality. They basically want to use gas instead of any other fuel.
Understood, sir. Thank you.
Thank you. Our next question is from the line of Kirtan Mehta from Baroda BNP Paribas Mutual Fund. Please go ahead.
Thank you, sir, for the opportunity. I had a question on the GSPC 12.5 SCM volume that we've done. Could you give us a bit more color in terms of how much was sold to Gujarat Gas and how much was to the external consumers? Also, from the sourcing perspective, how much was sourced on the long-term contract and what was the spot volume there?
Yeah, I think what we can tell is around 50% is sold to Gujarat Gas Limited. In respect to the sourcing thing, we can say that close to 65% was on the LNG imported, and the rest 35% we sourced from the domestic and RLNG.
Was everything on long-term contracts, or is it a mix of long-term and medium-term contracts?
Mix of long-term and short-term, sir.
Is it possible to relate it to the breakup as well in terms of long-term and short-term?
No, no.
What is the average margin that we make on this volume? Is it close to INR 2 crore per SCM?
No, it depends on who we are selling to and all. With respect to Gujarat Gas, we have to maintain the arm's length. That arm's length is always maintained with respect to related party transactions. For the rest, it's basically bid out mostly. We participate in the bids and we get the bids from the, essentially, the fertilizer and the other sectors.
Right, sir. Second question was about you also mentioned that for the LPG, you'll be tying up the terminal capacity. Would it be the Aegis Vopak terminal which would be the key which would be looked at, or are other terminals more economical for us?
Aegis is obviously one of the terminals we are looking at. There are other terminals also closer to the Morbi region. We are looking at all the options.
What could be our in-line logistics cost basically from the terminal to this in terms of a rupee per SCM or rupee per kg? Hello.
We are still in discussions with various partners. Maybe in the next meeting, we'll be able to communicate to you with better accuracy.
Sure, sir. Thank you for this clarification.
Thank you. Our next question is from the line of S. Ramesh from Nirmal Bang Equities. Please go ahead.
Yeah, thank you for the follow-up. If you look at the potential in Morbi, what is happening exactly in terms of the tile industry? There is a lot of concern in terms of export slowdown and the tariff issue, especially in terms of the exposure to U.S. exports. How is the on-ground utilization there, and how long do you think it will take for the tile industry to get back to the normal consumption and reach a full potential of 7- 9 million cu m a day?
I think, as of now, we are not seeing anything which is leading to non-introduction because even today, out of the total potential of close to 9 CMD, they are still consuming close to, I think, 7.5 CMD, which is more than 75% capacity utilization. As of now, we don't see any issue as far as utilizing our production is concerned at these ceramic units. Exports are already in excess of INR 1,000 crore per month and going at a reasonable rate. As we speak, I don't think there's any issue as of now.
If you look at the LNG sourcing, given that there's a lot of equipment and capacity coming online, is there any line of sight you have in terms of the, A, the tie-up of supplies through direct negotiations or with GSPC? What is the kind of reduction in price you may expect? Are discussions on? It is well known that the LNG prices are going to possibly decline. What is the progress you are making in terms of negotiation there in terms of tying up long-term contracts?
We are in touch with various, I mean, through GSPC, we are in touch with various suppliers. We see good linkages available in terms of, you know, price. Price in terms of linkages to brand are at a very reasonable level, in view of the increase in pre-conception capacity and supplies going on stream in the near future. I think the gas prices will be reasonable as compared to what we are seeing right now. Much more reasonable, I think.
In terms of the housekeeping question, you have a 7% or 8% stake in GSPC LNG, and that's a loss-making entity. Where are you adjusting the back-to-market losses in your results, FY 2025 monthly or FY 2026? When is it likely to turn profitable?
We are not consolidating on an underlying basis.
Yeah, you still have to provide mark-to-market for an 8% stake in GSPC LNG, right? Where is that accounted for?
No, they have given a valuation to that. The valuation has not gone below INR 10 crore. That's the price that we have acquired it.
Okay. Basically, there's no mark-to-market requirement. Okay, fair. Thanks a lot, and wish you well.
Thank you. Ladies and gentlemen, as there are no further questions, I would now like to hand the conference over to Mr. Sandeep Dave, Company Secretary, for closing comments. Thank you, and over to you, sir.
All right. Thank you, everyone, for sparing your valuable time for attending the investor call. Festive season is approaching, and best wishes on behalf of GGL Management to all our investors who participated on the call. We look forward to interacting with you during the next call.
Thank you. On behalf of Gujarat Gas Limited, that concludes this conference. Thank you for joining us, and you may now disconnect your line.
Thank you.