Ladies and gentlemen, good day and welcome to the Gujarat Gas Limited Q4 and FY 2025 and financial year ended on 31st March 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 this conference call, please signal an operator by pressing star, then zero on your touchstone phone. Please note that this conference is being recorded. I now hand the conference over to the Company Secretary of Gujarat Gas, Mr. Sandeep Dave. Thank you, and over to you, Mr. Dave.
Good afternoon, everyone. A very warm welcome to Q4 and annual result earnings call of Gujarat Gas Limited. I'm Sandeep Dhawe, Company Secretary and Head of Corporate Communication at GGL. Just to give you an update, since our last earnings call on composite scheme of arrangement, on 30th August 2024, we have announced a scheme of arrangement among GSPC Group of Companies. The proposed scheme will eliminate 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 and received no objection from BSE and NSE. We have filed the scheme with MCA in February 2025. The matter is under active consideration of MCA, and we are expecting the first hearing of the matter soon.
Coming back to GGL, to give a brief background on GGL, GGL is the largest city-based 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 areas. We have developed a pipeline network of more than 42,600 km, which provides natural gas to approximately 22.67 lakh households, 4,430 industrial customers, and 15,680 commercial customers. We also operate 828 CNG stations, serving approximately 4 lakh vehicles per day. We are aggressively setting up CNG infrastructure as well as building infrastructure. We have also started injecting biogas into GGL system. Consistent with our strategy to focus on increasing volumes, we have achieved an overall volume of 9.62 MMS CMD in the financial year 2024-2025, which is an increase of close to 3% over the previous financial year.
Limited aims to deliver affordable, reliable, and cleaner energy by operating responsibly and performing with excellence while considering environment, social, and governance factors. As part of our commitment to ESG initiative, we have taken various measures, which include the hydrogen blending pilot project, which we have completed with 8% blending. Please note that there is an inadvertent error in the presentation. Please read the percentage as 8% instead of 5% on slide number 31. Now, we have initiated action for increasing blending level to 15%. 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 industrial customers. In the current financial year, we have reduced burning of approximately 13,462 metric tons of coal per day.
Further, through our CNG sale on various outlets, we have reduced combustion of approximately 3,020 km of petrol per day during the financial year. At Gujarat Gas, we are the two highest standards of safety and a strong culture of safety. GGL is an ISO-certified organization for integrated quality, occupational health, safety, and environment management system. We build, operate, and maintain a safe and reliable gas network in our area of operation. With this brief background on GGL, I now request Mr. Dipe n Chauhan to share business updates. Over to you, Dipen.
Good afternoon, everyone. Thank you, Sandeep. First, I'll 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 2.26 million domestic customers. Gujarat Gas Limited has added 38,000 commissioned customers in Q4 FY 2025 and registered more than 50,000 customers in Q4 FY 2025. While in the year FY 2024-2025, we have added 151,000 commissioned domestic customers. The commercial segment is showing a steady growth in connection numbers. We expect the numbers in the domestic and commercial segment to increase over a period of time as the new areas are matured. GGL at present, has a customer base of 15,600 commissioned commercial customers. Now, let me update on the industrial segment.
In the industrial segment, sales volume was 5.03 MMS CMD for the quarter ended 31 st March 2025, whereas the sales volume during the previous quarter was 5.45 MMS CMD, an overall decrease of approximately 7%. As anticipated during the last earnings call, the reduction was mainly in Morbi volumes, where customers opted to shift to propane from natural gas due to higher price differential. The average Morbi volume during the quarter was 2.87 MMS CMD, and the known Morbi volume was 2.16 MMS CMD. The Morbi volume reduced from 3.35 MMS CMD in Q3 FY 2025 to 2.87 MMS CMD in Q4 FY 2025. The known Morbi volume of 2.16 MMS CMD for the quarter ended 31st March 2025 has grown from 2.10 MMS CMD during the previous quarter. That is an increase of approximately 3%.
The known Morbi volume has grown by approximately 9% as compared to the same period in the previous financial year. The spot RLNG prices, as expected, remained high due to winter months, whereas the propane prices during the quarter were relatively similar to propane prices of the previous quarter. The continuation of high spot RLNG prices kept the PNG prices higher compared to alternate fuel during the quarter. The recent events, that is, trade war and geopolitical dynamics, shall have a direct impact on the demand. We continue to monitor various aspects affecting the volume, that is, price movements of 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 volume. Now, let me update on the CNG segment.
In Q4 FY 2025, CNG sales in Gujarat recorded an 8% year-on-year growth, while sales outside Gujarat witnessed a robust 28% increase. Overall, CNG sales across all regions rose by 12% annually. CNG continues to offer significant cost advantage, approximately 45% cheaper than petrol and 24% cheaper than diesel. Across GGL areas, CNG vehicles as of March 2025 stand around 15,040,000 as compared to 13,008,000 as of March 2024. That is 18% growth. We are expecting the CNG vehicle growth momentum to continue. During the quarter, we commissioned three new PNG stations, further accelerating our infrastructure expansion and improving accessibility. We are also pleased to report that the strong growth momentum continued, with CNG sales reaching an all-time high of 3.56 MMS CMD in the quarter. This performance underscores a strong investment outlook supported by rising customer adoption and ongoing strategic infrastructure development, further solidifying CNG's position in the energy market.
Finally, I'm happy to update you that the company has taken a major initiative of digital transformation across all functions and geographies. Digital transformation in the CGD business enhances operational efficiency, customer experience, and regulatory compliance. By integrating technologies like SCADA, ERP, and GIS, it enables real-time monitoring, predictive maintenance, and data-driven decisions. It reduces cost, improves safety, and supports scalability through automation and innovation, positioning the company for sustainable growth and competitive advantage. Thank you very much for your attention. Now, I would like to hand it over to our CFO, Mr. Rajesh Sivadasan. Rajesh.
Thanks, Dipen. Good evening, ladies and gentlemen. I'm Rajesh Sivadasan, CFO of Gujarat Gas and Head of Investor Relations. I welcome you all to the earnings call for the fourth quarter of the financial year 2024-2025. I would like to thank you all for attending the call today. I trust you would have gone through our financial results for the quarter ended 31st March 2025 and also for the annual year 2024-2025. We have also uploaded the investor presentation on our website and the stock exchange. During the quarter, the company has invested close to INR 193 crore in the gas infrastructure, aggregating to INR 742 crore for the entire year. The company is presently having more than 42,600 km of PE and the steel pipeline, which is the key driver for our business.
In terms of revenues, the company has registered a revenue from operations of INR 4,289 crore during the fourth quarter of the financial year 2025, against INR 4,294 crore for the corresponding quarter in the previous year. The company has reported an EBITDA of INR 524 crore for the fourth quarter of the financial year 2025 compared to INR 622 crore for the corresponding quarter of the previous year. The profit after tax is INR 287 crore during the fourth quarter and for the entire financial year, as compared to INR 410 crore in the corresponding quarter of the previous year. The company's rupee per SCM EBITDA margin stands at 6.25 for the quarter, as compared to 7.06 in the corresponding quarter of the previous year. For the entire financial year, the EBITDA margin stands at 5.95, sorry, 5.95 per SCM.
As the investors are aware, this year, the financial year has been challenging for the CGD companies due to the sudden reduction in the APM allocation. However, on an annual basis, the company has been able to maintain the EBITDA of INR 2,090 crore for the financial year 2025, as compared to INR 1,984 crore for the financial year 2024. The PAT stands at INR 1,146 crore, as compared to INR 1,143 crore for the previous year. I'm happy to announce that the Board of Directors has recommended a dividend of INR 5.82 per share, that is 291% of the face value, for a total amount of dividend outgo of INR 400.64 crore. We'd also like to inform you that the Board has also approved the business development policy. The policy will provide a structured framework for identifying, evaluating, and pursuing growth opportunities, which is aligned with the company's strategic goals.
This includes organic and inorganic expansions towards the market expansion, partnerships, innovations, and investment in sustainable energy solutions and other promising opportunities. The Board has also formed a committee of directors who will evaluate the business opportunities. Gujarat Gas continues to have the credit rating of AAA stable and short-term for A1+ from Crisil Ratings and India Ratings. Further, we have requested investors to upload the nine-month requested to further, as requested by the investor, we have also uploaded the nine-month results of GSPC on GSPC's website. Now, I would like to hand over to Devendra Agarwal, who is looking after our gas sourcing.
Yeah, good afternoon. My name is Devendra Agarwal. I'll talk about gas sourcing. During the fourth quarter, APM gas output was to the extent of 44%, which was sourced mainly through New Well Gas, HPHT, and IGX, and part of it through Spot. APM allocation, as such, has remained flat over Q3 and Q4. In spite of the lower allocation of APM gas in the last quarter, the company has, because of the effective sourcing strategy, been able to improve the margins as compared to the last quarter. As you are aware, Spot LNG prices have corrected a bit. Oil prices have also come down, which has obviously helped Gujarat Gas , lowering the overall gas cost in the portfolio. As far as long-term contracts are concerned, we are negotiating with GSPC for extension of the existing contracts, which are due to expire soon. The discussions are progressing well.
We hope to extend this contract on better terms. That's all from my side. I will now hand it over back to Mr. Sandeep.
We can start Q&A session now.
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 handsets 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. Good afternoon. Just to extend the last point that was made about the sourcing, can we get a little bit of a detailed sourcing mix on the overall volumes? How much is coming via terminal energy? How much is basically from, let's say, HPHT and renewable pricing? And how much is from Spot, if not for the quarter than at least for the full year on an average? That was my first question.
You are asking for the breakup of the sourcing of the gas, which we have done?
Yes, sir.
Okay. Basically, 25% of the gas has come in from the APM.
25%, you said, sir?
I'm talking from the total. Just hold on.
Yes, sir. Yes, sir.
Yeah. We had 2.3 MMS CMD coming from the APM sources. The long-term contracts contributed to close to 35% of the 9.38 MMS CMD. The short-term contracts, which is IGX, the HPHT gas, and the Spot gas, that was close to 40%.
Understood, sir. That's very helpful. Second question was with respect to the pricing. In terms of the average LNG prices, you mentioned that they were slightly higher due to winter. Can you get a sense of what was the average sort of short-term prices that you saw in the business in Q4 and what are they right now in Q1? How much of a decline do you see?
In the last quarter, the pricing was close to $13.5-$14, which has now come down by almost $0.80 or so in the last quarter.
Down about $0.80. Okay. All right. Understood. Understood. Sir, just to extend that, would that mean, I mean, if I look at the way that LNG prices are projected and our mix going forward, is it fair to say that it seems to stay this competitive versus petrol and diesel? We can see a little bit of margin expansion in the sense that would we like to revise our EBITDA margin assumptions or guidance? I believe earlier you had mentioned about 4.5-5.5. If I now look, this is the second consecutive year where we have been at the upper end of that guidance.
Yeah, but guidance is for the entire year. We see cyclical changes which happen during the winter. That is the reason we are still maintaining the same guidance going forward.
So similar 4.5-5.5 is what we are maintaining, right?
Yeah, yeah. We maintain that, yes.
Okay. One last question, sir. Is it possible to split the volumes—you did split the industrial between Morbi and non-Morbi? Because my question was a bit broader. If I look at the 9.3 MMS CMD that we have done in this quarter, how much would have come from, let's say, the newer areas in the sense that the non-legacy areas that one sees, other than your Surat, Haldi, Hazira, Bharuch, Ankleshwar, Navsari, Valsad, which were already there? Other than that, what would be roughly the volume range today from all of the other new districts and new zones that we have been developing?
No, I think Thane is the area where we are getting a contribution from. We are talking of industrial volumes or all volumes put together?
Whichever is available, whichever you want to share, sir. I mean, any color would be appreciated.
Yeah, I think for industrial volumes, we are seeing an uptick from Amritsar rural area, the Thane area, and the Dadra and Nagar Haveli area. With respect to CNG volumes also, we are seeing an uptick from the Thane area, Dadra and Nagar Haveli area, same, and Amritsar area also. Domestic also, we are expanding in Thane and Amritsar, so that is also expanding now.
Okay. Okay. All right, sir. I have more questions. I'll come back in the queue. Thank you so much for the details.
Thanks.
Thank you. The next question is from the line of Yash Nandwani from IIFL Capital. Please go ahead.
Thanks for the opportunity, sir. Am I audible, sir?
Yeah, you're audible.
Sir, personally, regarding the outlook on Morbi, one of the leading players in ceramics, has for the first time in the last probably three or four years not provided any guidance on the volume growth and continues to see the overall ceramic market as muted. How do you expect this scenario to translate for us, and what is your outlook on Gujarat Gas volumes in Morbi for specifically FY 2026, and how they are trending in the first quarter of FY 2026?
Yeah. Let's see. 2.8, 2.5. Currently, we are going close to 2.6, 2.7 MMS CMD in Morbi. Can you hear me?
Yes, sir.
Yeah. Okay. So currently, we are doing 2.6, 2.7 in Morbi. Generally, we see the, I mean, spot prices have actually come down as compared to last year. I mean, we also see propane prices coming down because crude has also come down. I think volumes would be more or less same in the current quarter. We do not see any major uptick in Morbi volumes right now.
Awesome. Secondly, sir, we have observed consistent impressive growth in CNG over the last few quarters, I mean, double-digit growth consistency. How long do you anticipate that this double-digit CNG volume growth will continue, and if you could provide the volume growth guidance for CNG, specifically for FY 2026?
I think we'll go by the same guidance for the growth, which I think we are maintaining a growth of 12%. That growth will still continue in this financial year also.
Awesome. Thank you so much.
Thank you. The next question is from the line of Amit Murarka from Axis Capital. Please go ahead.
Yeah, yeah. Good afternoon. On the gas sourcing, you mentioned that you sourced 9.38 MMS CMD. Instead of percentage split, is it possible to give the numbers? Like how APM you mentioned was 2.3. Similarly, what were the numbers for other buckets of gas sourced?
You're talking about split in terms of volumes?
Yeah, gas sourcing, I mean. The volume sourcing, 9.38 was the sourcing for that. The split for that, I mean.
Yeah, the APM is close to 2.3. The long-term contract has contributed to 3.31. The short-term contract, which includes the Spot LNG, the IGX, the Henry Hub, sorry, the HPHT, contributes to 3.77.
Okay. Okay. In terms of the contracts, there are some contracts which are expiring. What is the replacement for those? Have you entered into new contracts, or is there any ongoing contract?
We are right now discussing. I think we are going to finalize very soon. The terms would be better than what they are currently.
Okay. So this is what Henry Hub linked contract that you'll be looking at?
This is a mix of Brent and Henry Hub.
Okay. We'll wait for more clarity there. Also, in terms of the pricing, what would be the prevailing propane pricing and the prevailing PNG pricing?
Yeah, the prevailing propane price is close to INR 43, the landed price per SCM. And our gas price is close to INR 46.55. So the difference is close to 3.5-3.7.
Got it. Just the last question is on GSPC, if you could provide the performance for GSPC for either FY25 or Q4.
Q4, the board meeting is scheduled by the end of this month. After that, we'll be uploading the numbers in the website.
Sure. Sure. That's all from my side. That's it.
Yeah.
Thank you. The next question is from the line of Yogesh Patil from Dollop Capital. Please go ahead.
Thanks for taking my question, sir. Sir, as you mentioned, 3.77 MMS CMD gas sourcing from HPHT, IGX, and Spot. If possible, can you split it into HPHT, Spot, IGX, and NWG? If possible.
I think, sir, we take everything together, so there is no split which is there. There is a split which is there, but that is because we are also supplying to industrial, some volume is going into the CNG segment. We cannot practically give that breakup.
Okay. What was the Spot absolute volume in the quarter four FY 2025?
Spot was close to $2.3.
Okay. Sir, my next question is a scheme of arrangement in which the amalgamation of GSPC, GSPL, and GL will come into the Gujarat Gas. Can you give us a broader timeline when this scheme of arrangement completion will happen? What is the current status of approvals which are necessary for this scheme completion?
Scheme was approved by board in August, at the end of August. Thereafter, we have moved BSE NSE, got cleared from BSE NSE. We will file the scheme as per complete requirement to Ministry of Corporate Affairs in the month of February. It is under active consideration of MCA, and we are expecting the first hearing soon. The current timeline which we are envisaging for completing the entire scheme and get a final MCA order is somewhere around September-October 2025.
Okay. Okay. Fair enough. Sir, last question. Sir, other operating expenses have jumped sharply. Any particular reason why such an increase?
Okay. We have provided for certain provisions have been done, close to INR 30 crore, especially for the inventory which was there. We have non-moving inventories for which around INR 6 crore of provisions were made. We have also done the physical verification of assets for around INR 3 or 3.5 crore has been done. Certain DCS has been converted into online, so certain write-offs with respect to those assets have taken place. We also provide for the security deposits which are there. That is also the total of INR 30 crore of additional cost. Also, the CSR has affected in this last quarter, INR 35 crore. That put together has increased the other expenses.
Okay. Lastly, sir, your cost of gas on a per unit basis has declined sequentially. Is it because of APM gas restoration in January month and a lower Spot LNG requirement during the quarter, or any other reason if you could explain it?
I think we are able to source it in the right prices. I think the APM has only reduced from the Q2. You look at Q3 and Q4. Basically, we have been able to source the domestic gas in a much better price.
Okay. Lastly, NWG compared to the quarter four, how much quantum or the quantity you are receiving in the quarter one FY 2026? Any ballpark number if you could share? NWG, new well gas.
Almost same, I suppose.
Okay. Thanks. Thanks a lot, sir. I'll come back in the queue if more questions.
Yeah.
Thank you. The next question is from the line of Sabri Hazarika from Emkay Global. Please go ahead.
Yeah. Sir, first clarification, when you mentioned 2.3 MMS CMD of APM, this includes NWG also, right? You have club APM plus NWG is 2.3, right?
No, it is not there. That NWG is part of the short-term contract, yeah.
Okay. This 3.77 part of that, right?
Yeah. Yeah.
Okay. Okay.
2.3 clearly with respect to the allocation with respect to the gas from GAIL with respect to CNG and PNG only. NWG is not included there.
Okay. Fine. I am just wondering that if you are having—okay. Got it. Got it. Fine. Second is on this CNG vehicle addition. Right now, you have got a universe of 1.58 million vehicles. Is that right?
Yes. Yes, please. Yeah, you are right.
Four lakh vehicles were added in FY25?
2 lakhs. Almost 2 lakhs.
Almost 200,000 were added in FY2025. Okay. Fair enough. You mentioned that Gujarat and outside Gujarat volume growth of 8%, 28%. This was for the quarter, right? Not for the full year.
Yeah. Yeah. Yeah, for the full year.
Okay. Secondly, just wanted to let you know that, I mean, somehow the GSPC website has disappeared. I think we have tried to get the numbers for Q3, but we do a Google search and all, it is not there. Is there any issue there? Can you give us the Q3 numbers of EBITDA, PAT for GSPC?
Q3 is already uploaded. I think it's the GSPC Group website which is there. From there, the link comes in.
Yeah. That website is not working. There is some problem there. I was not able to get it. I mean, even a Google search, it is not coming. Previously, it used to come. If you have it handy, then otherwise it is fine. If you have it handy for Q3, can you give us the number?
You can share the concern over email to us. We'll connect you with the relevant officer of GSPC.
Yeah. Sure. Fair enough. Just last question, you have no volume guidance as of now for FY 2026, right? Apart from, say, CNG and domestic PNG. For industrial, it is still a wait and watch. Is that right?
Yeah. You are right.
Okay. Thank you so much and all the best.
Thank you. The next question is from the line of Hardik from ICICI Securities. Please go ahead.
Yeah. Thanks for the opportunity. I just want to check, during the quarter, the other financial asset has increased from INR 13 crore to INR 1,300 crore. What was the specific thing in this which has made this such a large jump?
You are talking of which line item? The balance sheet?
Current asset, other financial assets.
Current other financial assets. Yeah. Basically, we have reclassified the GSFS funds which we deposit. We are depositing it for more than three months. And it's more than one year also, we are depositing it. So basically, there's a reclassification from the cash and cash equivalents to other financial assets.
Okay. And sir, what was the CapEx for what is the CapEx guidance for FY 2025 and going forward?
Yeah. We will be doing CapEx close to INR 1,000 crore. That's the approximate guidance.
Okay. Okay. Just want to check. I went to the GSPC result. So just want to know what was the volume for the nine-month period?
We are unable to hear you. Not audible.
Hello? Am I audible?
Hello.
Hello. Hello.
Hello.
Hello.
We are not able to hear him.
Hello. Am I audible now?
He is audible. Just a second. Mr. Hardik, may I request you to rejoin the question queue?
Okay. Thanks.
Yes, sir.
Can hear you now.
Hello, sir. Are you there?
Yeah. I am.
Okay, sir. So.
Should I ask the question?
Yeah. Mr. Hardik?
Yes.
Sir, what was the nine-month volume for GSPC?
Nine months?
Volume for GSPC?
It's around close to 13 MMS CMD.
Okay, sir. Thank you. I'll come back in queue. Thanks.
Thank you. The next question is from the line of S. Ramesh from Nirmal Bang Equities. Please go ahead.
Thank you and good evening. Can you repeat the numbers for the total number of CNG vehicles for FY 2025 and 2024? I heard that 1,380,000 for March 2024. What are the numbers for year-end March 2025?
15,040,000.
1,540,000. Okay. 1,380,000-1,540,000. Okay. Now, if you're looking at.
13,000. Excuse me. 13,008,000-15,040,000.
Okay. 13,008,000- 15,040,000, right? Four zero?
Yes. Yes.
Okay.
Yes.
Okay. Okay. Now, if you're looking at the expected synergy between Gujarat Gas and GSPC post-merger, are you already looking at some benefits based on the expertise they have in gas sourcing? Is that flowing through into your numbers? Or once the actual merger happens, you will see this benefit coming into your numbers?
I think that benefit is already there today also.
Okay. So in terms of the tax accounting, once the merger is done, you will obviously have to provide tax in the quarters prior to the formal announcement of the merger. In terms of the full year basis, is it still reasonable to assume that you will get the tax breaks for FY 2026, or should we expect it only from FY 2027?
No. I think, see, the scheme is effective from 1st April 2024. So all the returns, etc., will be, we need to refile the returns, etc. So we'll get that benefit.
Okay. Okay. Fair enough. One last thought. In terms of the growth, you are talking about 12% CNG. You're doing about 2 kg per vehicle based on the numbers you've given, right? Do you expect the same kind of growth in CNG vehicles, and thereby are you expecting the growth in CNG, or would you also see the consumption per vehicle going up? How would you see the CNG growth materializing in the future?
In both the ways. I think, see, in the area which we are dominating as Gujarat, I do not think the EV has created that impact. We have seen a growth in CNG vehicles. That is evident from the numbers which Dipen had told you. With respect to that, only we are expanding ourselves with respect to the growth also. The FTODO, etc., the CNG stations which are going to come in, and the online conversions which are going to happen, that is only going to add on to the volumes which are already there.
Okay. When you're talking about this volume growth, you are saying that you will see more number of vehicles converting to CNG. Do you also plan to capture some of the highway traffic because this is another theme we hear from other companies? Is there a floating vehicle population that is helping you in your CNG growth?
We have a very good presence in most of the highways in Gujarat, and same way, we are continuing to the new areas also.
Okay. Thank you very much, sir.
Thank you. The next question is from the line of Vartharajan from Antique Limited. Please go ahead.
Thank you for the opportunity, sir. On the outlet front, what has been the addition in FY25, and what is it that we should expect in the next two years, year- on- year?
Can you repeat the question? Sorry.
The outlet addition, CNG outlets?
Okay. CNG outlets. I think we have, in this last quarter, we have added three outlets. Apart from that, we are majorly focusing on the upgradation of our existing CNG stations. When I say upgradation, it's something like whether to add one more compressor or to convert daughter booster into online stations. That is in the range of, I think, 40. That's what the upgrade we have gone through.
If I were to look at FY 2026 and 2027, any guidance?
If you remember, last year, we have launched our FTODO scheme. As per our latest information, there are at least 60 stations which are under construction or under process of getting permissions from various authorities. I think there are 10 more yet to sign. Approximately 70 CNG stations will add under this scheme in this next financial year.
Fair enough. The second question was on the possibility that once the spot prices fall sharply, and we expect that to happen over the next 12- 16 months, will there be an LNG kind of a challenge? Just the way we had propane challenging us, will there be an LNG kind of a challenge as well? Is there a possibility at Morbi?
As of now, in transportation, that's what you are talking about?
Not Morbi. Do you see LNG becoming a challenge in the next year or two if LNG prices were to fall sharply from the current levels?
I think we are looking at it as an opportunity rather than a challenge.
How so?
Yeah. We can still put up the LNG stations over there. We have the CGD areas. We have the CNG stations. One more additional LNG station would add to our bottom line itself.
I'm not talking about LNG stations for trucks or for vehicle end use. Specifically, I'm talking to the Morbi.
Yeah. I'm talking of the same thing.
Okay. Fair enough. Thank you.
Thank you.
Thank you. The next question is from the line of Mayank Maheshwari from Morgan Stanley. Please go ahead.
Sir, the first question was in terms of gas sourcing. Some of your peers have started to move to a lot more long-term sourcing of LNG as well as gas. You are still at nearly about 50% odd, if I'm correct, on spot. Is there a thinking process of what that number could look like for you over the next two to three years of where you want to kind of get to?
We are looking. We are also actually, we are in a very good position. We are only 40% on term contract basis. Basically, there is a lot of opportunity for us to source gas on a long-term basis and that too on a competitive basis to the major fuel which is propane. Right now, the contracts that are being done in the market is around mid-12% of oil. If we get those kind of contracts, we will be able to compete with propane in a much better way. In fact, 12.5% of Brent represents a very good price. Basically, what we think is that we are in a very good position to get into long-term sourcing maybe in the next 18 months or so.
Okay. So do you think that 50% number could look like 70 or 80, or is there a number you have in your mind you want to get to?
Absolutely. In fact, we can even this number, which is like 5 million in industry segment, that can also increase substantially.
Okay. Sir, just a follow-up in terms of how you're pricing your gas as well, correct? You had earlier in previous calls highlighted about using propane benchmark and kind of using that to kind of incentivize consumption. Are those things still in place, or you are kind of considering what's going on with the spread with LNG? Those things have kind of unwinded right now.
We are still looking at sourcing gas with basically pricing linked to propane. However, I mean, that is also already there, but we are also looking at sourcing Brent-based contracts. That basically gives us a natural protection against propane prices because both propane also moves with oil. If our contracts are linked to oil, so basically, they will both move in tandem.
Got it. Okay. Okay. Just the final question was in terms of LNG for trucking as a diversification in terms of your consumption thing. Have we seen any major progress there, or we're still in very, very early days for you?
Actually, we have already five LCNG stations. It's just a matter of time we'll put LNG dispensers there. We are just waiting for the ecosystem to be developed, and we'll be there in the game.
Okay. All right. Thank you, sir.
Thank you. The next question comes from the line of Pratyush Kamal from Incred Equities. Please go ahead.
Hello, sir. Am I audible?
Yeah, you're audible.
Yeah. My question is related to the long-term contracts which you have. We just wanted to get a bifurcation of the type of contracts, be it the Brent or the Henry Europe. Can you just give the bifurcation of those contracts? How many volumes are there linked to the Henry Europe, and how many volumes are linked to the Brent?
There is no Henry Europe as of late.
Okay. Are you planning to include a bit more of Henry Europe into your portfolio? Looking at the Henry Europe prices being at the lower level currently, and we are expecting that the Henry Europe prices would be at the supper level for a longer period of time. What do you think on that?
Currently, if you see Henry Europe vis-à-vis oil, oil contracts are cheaper because oil is around $65 or so, whereas Henry Europe is around $4-$4.2. If you compare the delivered cost, Henry Europe would be on the higher side. However, these things do change over a period of time. We definitely have some share of Henry Europe gas in our long-term portfolio.
Understood, sir. It was really helpful. Just wanted to understand the slope of the Brent contracts which you currently have. What is the kind of slope which you usually have in those kind of Brent contracts?
I think the industry tells you it's close to 13%-14% is the slope which is. Currently, it's around.
Understood.
Yeah.
Yeah. Is there any fixed cost also, let's say, $1.5 or $1 of fixed cost over and above that 13% of the slope?
Yeah. I think when the long-term contract is there, you have the slope component, the fixed component, etc. So that is there.
Understood, sir. The last question is regarding the volume uncertainty as far as the industrial and, politically, the more we are concerned. Because the largest competitor, the biggest competitor for using that industrial gas would be propane. Eventually, if the production of natural gas would get increased globally, it would ultimately lead to the worse supply in the propane market also. What do you think in the next two to three years, are the spreads going to get reversed from the 3.5 rupees per kg to, let's say, - 1 or- 2? Technically, I wanted to ask, is it the case you are seeing that the LNG would get cheaper and more people would start consuming LNG compared to propane, which they are currently doing in Morbi? What do you think on that, sir?
If you are following the Indian market, most of the many Indian companies have signed long-term contracts. The oil contract has been renewed at mid-12% of oil. At those levels, you can easily compete with propane.
Understood, sir. At the same time, propane prices are also falling down. Any comment on that? Ultimately, the spread is something which matters the most rather than the absolute prices.
Propane prices, if you follow on a yearly basis, during summer, it is like 14% of oil, and during the rest of the season, it is like 17% -18% of oil. Whereas if you are getting gas at around 12% and up to 13%, you can easily compete.
Understood. No issues, sir. Thank you, sir.
Thank you. The next question is from the line of Deepak Malhotra from CapGrow Capital Advisors LLP. Please go ahead.
Hello. Am I audible?
Yeah, you're audible.
Hello. Am I audible?
Yes. Yes, you are audible. Please go ahead.
Okay.
We can hear you. Please go ahead.
Yeah. Yeah. Thank you. My first question is basically on the pricing of your inputs, basically. You have explained that how you wish to increase the long-term contract going forward. I think a bigger question looms in terms of the industry policy which the government seems to be veering forward to, where the APM allocation may actually come to not, say, going forward. How do you foresee that in terms of impacting the overall profitability of the business?
I think, see, I think the Pari Committee people were very clear with respect to the end date of that APM gas allocation. I think as the GSPC and Gujarat Gas is a merger, we are in a better place to basically source this gas to compensate for the APM not coming in. Yes, there is definitely there would be an effect on the margins, but we'll be definitely in a position to increase the volumes, which practically will amount to a higher profitability.
Okay. Okay. My second question then is on the overall business growth. I think over the last five years, as you have demonstrated, that the growth has mainly come from the CGD business. And Morbi, anyway, as has been outlined over the last few years, we have seen there is a lot of variation. Now also, going forward, as you discussed even on the call, we are not really sure. Where is the future growth really to come from? I'm not looking at quarter to quarter. I'm looking at, say, next three to five years, please. Thank you.
I think you are right. Basically, that's the thing which the board has come up with a detailed framework of a business development policy which has come out. Basically, that intends to basically put a growth trajectory for Gujarat Gas going forward. That would include inorganic as well as inorganic. That is expanding in the gas business as well as in the other areas also. We are seriously looking at those expansion plans, and we'll definitely come back to the stakeholders in the graduating future.
Okay. One final question on the demerger, if I may ask. How is that really going to benefit you while you have already mentioned that you're already getting the benefit in terms of sourcing from GSPC in terms of getting the supplies? Is that really then going to make really a difference once the demerger happens and the whole process goes on?
Demerger is happening only for the transmission business. The GSPC is still.
Oh, I meant both merger and demerger. Yeah. Sorry, I meant both merger and demerger.
Yeah. It's definitely going to help GSPC. Gujarat Gas with respect to basically the entire city gas, the gas trading business will be part of Gujarat Gas. That's basically the going forward. Also, that's what we require also in Gujarat Gas. We need to have a strong sourcing team for the gas which is going to come. The demerger is only happening with respect to the transmission business. Anyway, it's a regulated business. We are practically consolidating, and basically, we are also removing the cross-holdings which are presently there. Automatically, that is eventually benefiting the stakeholders.
Okay. Will there be any cut also in terms of any manpower cost or anything which could also give further flip to the margins at all?
I think the businesses are being merged. There is no, I think they are into different business. GSPC is into a different business of sourcing E&P, etc. GSPL still remains as it is. The transmission business still remains as it is. I do not think there is any manpower reduction which is going to come.
Okay. Thank you.
Thank you. The next question comes from the line of Abhir Pandit from Old Bridge Mutual Fund. Please go ahead.
Hi, sir. Thanks for the opportunity. Sir, in regards to the new committee with respect to the BD opportunities that you have discussed, sir, could you just give us more color on this and which areas of which industries you are looking at, and what is the scale of investment you will be looking at for these new industries?
I think it would be the prerogative of the committee to finalize and come back to you. With respect to the scale of investments, you can estimate from the merged entities' balance sheet what is the scale of investment we can.
Okay. Sir, any other color? Specifically, will you look at, I mean, other GAs, or will it be totally out of the gas sector kind of thing?
It can be both.
Okay. Okay. Thank you, sir.
Thank you. The next question is from the line of Kirtan Mehta from Baroda BNP Paribas Mutual Fund. Please go ahead.
You are not audible, sir. Please come closer to your mic.
Is this better?
No, sir. There's still some disturbance in your background.
Hello. Am I audible now?
Yes, sir. That's better.
Yeah. Thanks for this opportunity. I wanted to check on the progress on the extradition scheme that we have been offering. We have mentioned that we have signed around 50 agreements. If I remember, we had around 100 agreements. Just this progression.
As I mentioned earlier also, there are 60 stations under process, whether some of them are under the construction or some of the stations are taking the permissions mode. If everything goes well, I think we will be managed to add around 70 stations this year. Hello?
Mr. Kirtan, are you there? Sir?
My line is a bit tricky. I think I'll drop back.
Okay, sir. Thank you. We move on to the next. The next question comes from the line of S. Ramesh from Nirmal Bang Equities. Please go ahead.
Thank you for the follow-up. If you see the current trend in cost, it looks like you can earn a higher margin than fourth quarter. Is there any scope for cutting prices? How do you see the run rate for EBITDA per SCM in the first half of the year in FY 2026?
I think we are going with the same guidance, Ramesh.
Yeah, I understand that. With the kind of softness in gas prices, it looks like you can earn at least INR 1 more. I am trying to get a sense in terms of how the margins are panning out as we speak.
I think there are two or three variables which are going along. One is the APM gas reduction which is coming in and the uncertainty in the propane prices which are there.
Okay. Secondly, on the new GAs, are you booking any loss in any of the new GAs, and when do you expect all these new GAs to break even and start generating positive EBITDA and PAT?
I think it will take a while. I think we have started investment last two years. I think, as an infrastructure company, it would take at least three to four years to basically come over because we are developing the entire ecosystem of gas over there. That has to be developed. I told you in the last call also. Maybe two years, maybe. Yeah.
Is there any loss you are booking at PBT level in any of these years?
No. No. It's at a business level which is there. See, you cannot look at it in isolation. Ultimately, you are promoting gas, and basically, you need to get there first. Infrastructure has to come first before the sales happen.
Okay. Thanks a lot. I wish you all the best.
Yeah. Thank you.
Thank you. The next question comes from the line of Saurabh Handa from Citigroup. Please go ahead.
Yeah. Thank you for the opportunity. Sir, just a clarification. So the APM allocation that you spoke about of 2.3 MMS CMD, was that for Q4, or is that the current allocation?
Yeah, it was for Q4 allocation.
Could you tell us what is the current allocation? Because I understand there were some changes that happened in April.
It's around two.
Okay. How much would the NWG be currently?
New well gas should be around 0.5-0.6.
Okay. So this hasn't increased because my understanding was it was around 0.5 even last couple of quarters. So this is largely stable.
Yeah. Yeah. It is largely stable.
All right. Sir, thank you so much.
Thank you. The next question comes from the line of Vartharajan from Antique Limited. Please go ahead.
Thanks again for the opportunity. As far as Morbi goes, how are you seeing the number of new units coming up? Are you seeing significant growth there?
New units coming. Will you please repeat the question?
At Morbi, are you seeing new units come up? Are we looking at a 6%-8% kind of volume growth?
Yes. There are big units coming up, in fact.
Okay. Any numbers you can provide? Number of units?
At least nine as far as we are knowing.
Okay. Secondly, I also wanted to, once again, understand a little more on this LNG opportunity you were talking about in my last question. First is about you obviously will have an opportunity to take back the propane work. Do other people also have that opportunity of bringing LNG into the Morbi area and compete?
Open Access PNGRB has come up with a guideline. They have come up with a regulation called Guiding Principle on Open Access. I think a good number of CGD entities, including Gujarat Gas, have challenged that in Delhi High Court. We have obtained a favorable entry model, saying that they cannot take any coercive action against it. As we speak, the matter has been finally heard in Delhi High Court, and they have reserved the matter for order. The matter will be finally decided by Delhi High Court's order sooner.
Pending the order, there is no new units which can come up there?
I mean, no one can supply LNG to Morbi as long as this order is there.
Order?
LNG, there was a specific separate order obtained by Gujarat Gas from Delhi High Court, which categorically stated that LNG is included within the exclusivity of CGD entity. Only the authorized CGD entity can supply LNG in a given geographical area. If somebody wants to supply LNG, say, in a Morbi area, only Gujarat Gas can do it. No one else can do it.
Very good, sir. That clarifies it. Thanks a lot.
Thank you. Ladies and gentlemen, as there are no further questions from the participants, I now hand the conference over to Mr. Sandeep Dave, Company Secretary, for closing comments.
On behalf of Gujarat Gas, I would like to thank all participants for sparing their valuable time. Thank you all.
Thank you. On behalf of Gujarat Gas Limited, that concludes this conference. Thank you for joining us, and you may now disconnect your lines.