Ladies and gentlemen, good evening and welcome to the Gujarat Gas Limited's Q3 FY2026 earnings conference call. As a reminder, all participant lines will be in the listen-only mode. 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 touchtone 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.
Thank you. Good day, everyone. A very warm welcome to Q3 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 the scheme of arrangement, since our last earnings call, the scheme in which we have filed the scheme of arrangement with the Ministry of Corporate Affairs, the Ministry of Corporate—we are expecting a date of final hearing from the Ministry of Corporate Affairs, which we are going to receive. There were certain queries from MCA which we have addressed, and we are expecting that final hearing of the matter should come up somewhere in the middle of February. That takes us to completion of the scheme by the end of April, including allotment of shares to GGL and GTL shareholders.
Coming back to GGL, just to give a brief background on GGL, GGL is the largest city gas distribution company in India. It 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 44,550 km, which provides natural gas to approximately 2.383 million households, 4,454 industrial customers, and 15,900 commercial customers. We also operate 833 CNG stations, serving approximately 400,000 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. GGL 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 the ESG initiative, we have signed eight new tripartite agreements with biogas producers and mid- scale for purchase of CBG. This takes us to a total tally of agreements signed for CBG to 27, including eight agreements signed during the quarter. We are 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. GGL, by virtue of its average Q3 PNG sales to industrial customers, reduces CO2 emissions by approximately 5.6 million kg per day due to PNG utilization by customers instead of coal. Through its CNG sales, we have reduced CO2 emissions by approximately 2.1 million kg per day due to natural gas utilized by customers instead of petrol and diesel.
We have been conferred with the Supply Chain Champion Award in the gas sector by the Institute of Supply Chain Management in the Supply Chain Ranking 2025. We are among the top 10 supply chain champions as per ISME data. We are pleased to announce that the company has engaged McKinsey & Company as a strategic consultant to evaluate growth opportunities within our existing businesses, as well as to advise on both organic and inorganic expansion initiatives. At Gujarat Gas, we have high 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, create, and maintain a safe and reliable gas network in our areas of operation. With this brief background of GGL, I now request Mr. Dipen Chauhan to share business updates. Over to you, Dipen.
Thank you, Sandeep. Good afternoon, everyone. 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 2.383 million domestic customers. GGL has added 38,000 commissioned customers in Q3 FY2026 and registered 40,000 customers in Q3 FY2026. 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 mature. GGL, at present, has a customer base of 15,897 commissioned commercial customers. Now, let me update on the industrial segment. In the industrial segment, sales volume was 3.93 MMSCMD for the quarter ended 31 December 2025, whereas the sales volume during the previous quarter was 4.35 MMSCMD, an overall decrease of approximately 10%.
The average Morbi volume during the quarter was 1.6 MMSCMD, and the normal Morbi volume was 2.25 MMSCMD. The Morbi volume reduced from 2.13 MMSCMD in Q2 FY26 to 1.68 MMSCMD in Q3 FY26. As anticipated, the propane prices remained considerably lower than GGL's natural gas prices, due to which Morbi volumes were lower during the quarter. The normal Morbi volume of 2.25 MMSCMD for the quarter ended 31st December 2025 has grown from 2.22 MMSCMD during the previous quarter. That is an increase of approximately 1%. The normal Morbi volumes have shown a steady growth despite the Diwali festival, where the majority of the normal Morbi markets have lower consumption. The normal Morbi volume has grown by approximately 7% as compared to the same period in the previous financial year.
The recent reduction in export RLNG prices and crude prices enabled GGL to reduce the prices in the Morbi ceramic segment by INR 4.50 per SCM, with effect from January 1, 2026. The reduction in natural gas prices, coupled with the increase in propane prices, has enabled GGL to reduce the price differential to propane. That is natural gas premium by INR 2.40 per SCM. The propane prices are expected to increase further during the month of February, which shall further reduce the premium of natural gas. We expect the Morbi volumes to increase from the current levels during this quarter. We continue to monitor the various aspects affecting the volumes. That is price movements of export RLNG and alternate fuels, and consumer demand across all our operating areas, and shall adjust to such market dynamics so as to maintain balance between margins and volumes.
Finally, let me update on the CNG segment. GGL reported a strong performance in Q3 FY2026, driven by robust growth in CNG volumes and expanding infrastructure. CNG sales rose by 11% year over year, with Gujarat recording a 9% increase, and areas outside Gujarat delivering a notable 22% growth, underscoring GGL's success in deepening presence across geography. As of December 2025, the CNG vehicle base across GGL's network reached approximately 1.694 million compared to 1.489 million a year earlier, reflecting a solid 14% growth. CNG continues to offer a compelling economic advantage, being approximately 45% cheaper than petrol and 23% cheaper than diesel, further reinforcing the attractiveness amid volatile fuel prices. Looking ahead, GGL is well-positioned to capitalize on 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 in the CNG segment. Finally, I'm happy to update that during FY 2026, we marked significant milestones in our company's digital transformation journey. With a soft focus on innovation and operational excellence as we go for merger, we have planned to strategically expand our enterprise resource planning ecosystem to incorporate additional key business functions and achieve the benefits 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 blueprints for implementing a robust and secure SCADA system to enable centralized monitoring and control across all geographies.
An advanced metering infrastructure is also planned to facilitate data collection from industrial and commercial customers through various meter types and transmit consumption-related data to the ERP system for billing and to the SCADA system for centralized monitoring and control. This scalable, agile infrastructure is designed to support our evolving business dynamics and ensure responsiveness in a rapidly shifting global environment. Furthermore, we have identified automation opportunities across multiple business processes that currently fall outside the scope of our ERP system. These initiatives are designed to strategically address operational challenges and enhance overall process efficiency through seamless integration and robust monitoring mechanisms. Thank you very much. Now, I'll hand over the mic to our CFO, Mr. Rajesh Sudarsan.
Good evening, ladies and gentlemen. I'm Rajesh Sudarsan, the Chief Financial Officer and the Head of Investor Relationship at Gujarat Gas Limited. I welcome you to the earnings call for the third quarter of the financial year, for 2025-2026. Thank you for joining us today. I trust you had the opportunity to review the financial results for the quarter ended 31 December, along with the accompanying press release and the investor presentation, which is uploaded on our website and the stock exchanges. During the quarter, the company added over 38,600 domestic connections, bringing a total domestic connections of more than 2.383 million. Our pipeline infrastructure now spans approximately 44,540 km of steel and steel networks, which continues to be our key driver for our growth.
During the nine months, we have invested approximately INR 408 crore in gas infrastructure, and for the full financial year, we plan to incur a capital expenditure in the range of INR 650-700 crore. With respect to the financial highlights for Q3, the revenue from operations stood at INR 4,865 crore compared to INR 4,333 crore in the corresponding quarter of the previous year. The EBITDA stood at INR 502 crore against INR 439 crore in Q3 of the previous year. During the nine months, the EBITDA is INR 1,602 crore compared to INR 1,566 crore during the nine months of the previous year. The profit after tax accounted to INR 266 crore compared to INR 222 crore in the previous last year. During the nine months, the PAT stood at INR 1,176 crore as compared to INR 1,159 crore in the nine months of the previous year.
The EBITDA margin per SCM stood at 6.52 against 5.04, corresponding to the previous year. For the entire financial year, we estimate the EBITDA margins to be in the range of 5.5-6.5 per SCM. With respect to the gas allocation, during the third quarter, we have received 100% allocation for the domestic segment. However, there was a 64% shortfall in the CNG segment, resulting in an overall shortfall of 51% to the priority segment, that is domestic and CNG. The APM shortfall was mitigated through allocations from new well gas, HPHT, and sourcing gas through spot and long-term volumes. The allocation of new well gas for Q3 for the financial year 2025-2026 was approximately 0.31 MMSCMD, down from 0.44 MMSCMD in Q2 of the current year.
Gujarat Gas continues to maintain a strong credit profile with a AAA stable rating and an A1 plus rating from CRISIL, CARE Ratings, and India Ratings and Research. As requested by investors, the financials of Gujarat State Petroleum Corporation for the half year for the financial year 2025-2026 have been uploaded on Gujarat State Petroleum Corporation's website. Now, I'll hand over to Devendra for the further updates on the gas sourcing.
Good afternoon. I am Devendra Agarwal, Executive Director, Commercial. I will highlight the key strategic commercial metrics, fuel sourcing updates, and the market challenges we faced during Q3 2026. Growth in the priority sector, which is basically CNG and domestic PNG, has been robust, and it continues to grow at 11% with our Q3 to 2025. On the sourcing side, APM gas allocation shortfall has increased from 45% to 51% of our total requirement. Shortfall in CNG is currently 64%, and the same is being met through spot as well as long-term contract that we have. The proportion has increased to 30% from 18% in the last quarter. As with regard to the revised trunk line tariffs, the zonal tariffs, we have analyzed the impact on our financials.
We believe that at the current operating volume level, which is like 8.4 MMSCMD, we are currently revenue neutral, and we'll continue to be so till at least 0.3-0.4 MMSCMD additional volume, which is like 8.7-8.8 MMSCMD level. On the Morbi side, the volumes have experienced a substantial contraction. Volumes decreased 50% from 3.35 MMSCMD in Q3 2025 to 1.68 MMSCMD now. This represents a 21% reduction from 2.1 MMSCMD in the immediate preceding quarter. The decline was because of high volatility in spot prices over the past one year. While spot prices saw a 19% reduction, the price of propane, a key alternative fuel for especially the Morbi consumers, has decreased by 25%, making it a much more attractive option for the industrial consumers. To counter this challenge, our parent company, Gujarat State Petroleum Corporation, has identified locations for storage and handling of propane.
We are currently in advanced talks to reserve unloading capacity, ensuring that we have access to physical infrastructure to basically capitalize on this opportunity. To manage competition, we'll be actively offering propane as an alternate fuel solution, ensuring that we retain our customers, maintain customer relationship, and market share in the industrial belt of Morbi and other industrial locations. On the LNG market side, the LNG market over the next two to three years is likely to experience a significant supply glut driven by a massive wave of liquefaction capacities coming in, particularly from the US and Qatar. This surplus is expected to put downward pressure on spot prices in Europe and Asia, although the long-term demand growth remains intact, especially in emerging economies like China and India. On some of the challenges, the ongoing geopolitical tension could have a negative impact.
It could disrupt the supply chain, impact shipping routes, and cause price volatility. Commissioning timelines for some of the projects, such as Golden Pass and North Field NFE of Qatar, they could be delayed. However, they're already delayed quite a lot. This we can highlight as a key challenge going forward. Thank you very much. I hand over the mic to our Company Secretary, Mr. Sandeep Dave.
Moderator, please start 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 touchscreen telephone. If you wish to remove yourself from the question queue, you may press star and two. Participants, you 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, very good afternoon. Firstly, a couple of questions on Morbi. You mentioned that you have taken a INR 4.5 reduction in industrial prices at Morbi, and the discount to propane has come down. Can we get a sense of what are the equivalent prices in INR for SCM terms right now for your industrial segment in Morbi and equivalent propane price?
Presently, the propane price is around INR 38.6. Against our gas prices of INR 41.
Sir, just a hypothetical question. At what price of propane does the industrial price and propane price sort of coincide? How much would LPG prices need to increase from here on in? Another $25-$30 a ton will do it, roughly?
$25-$30 per ton.
Okay. Got it, sir. Got it. The second question was, sir, with respect to the CNG, you mentioned the growth rates for Gujarat and non-Gujarat. Is it possible to get a sense of the volume split right now for CNG between Gujarat and non-Gujarat areas?
Yeah. Gujarat is close to 2.95, and outside Gujarat is 0.51.
Okay. Can we expect, or rather, is your sense that non-Gujarat will continue to grow at the kind of run rates you have been showing for the last, let's say, three, four quarters? Should we be building in that kind of 15%-20% growth in this particular part?
Yeah. I think the double-digit growth should go through in both the areas because outside Gujarat also, we are growing at a higher rate because these are new areas.
Right.
The base is lower, no? That's the reason.
Yes. Just a couple more housekeeping questions. One was the EBITDA guidance seems to have been increased in this quarter. If I heard you correctly, you mentioned about five and a half to six and a half being the expected rate for the full year. Can we build in a slightly higher run rate for 2027 and 2028 as well, given the dynamics of rising and the volumes?
I think you can take the same rates. I think we'll update you when we come up with the March results, wherein we will have the consolidated balance sheet, wherein we'll have a sense of the numbers which are there.
Okay. Okay. Sir, last question was Apex. You mentioned about INR 700 crore for this year. For the next couple of years also, is that the same run rate? I mean, for at least the standalone Gujarat Gas CGD business. I know the next year would be now a small picture. For Gujarat Gas's CGD business, INR 700 crore is the run rate we should be building in?
Yes. That's it.
Okay. All right, sir. Thanks. I'll come back if I'm needed. Sir, thank you so much for your time.
Thank you. The next question is from the line of Yogesh Patil from Dolat Capital. Please go ahead.
Thanks for taking my question, sir. Sir, question related to gas cost. Gas cost of Q3 FY 2026 versus Q2 FY 2026. Despite multiple favorable factors for the gas cost reductions on sequential basis, like lower fuel prices, lower APM prices, lower spot LNGs, our gas cost has reduced mere INR 0.20 per SCM on sequentially. In our calculation, it was indicating the gas cost reduction was a little bit higher. Can you correct us? Where we are missing anything?
This year, I think the spot prices, if you compare it with the—I mean, if you compare it vis-à-vis crude, is much higher than last year. Are you talking about the absolute numbers or the spot prices?
Sir, our gas cost per unit has come down by INR 0.20 per SCM on a sequential basis, Q1, Q. If we compare it on the crude levels, spot LNG levels, everything is down on the Q1, Q basis. That is why we wanted to understand a mere INR 0.20 per SCM reduction versus there was a huge expectation of a INR 1 per SCM kind of a gas cost reduction.
I think it depends on the sources of gas and where you are sourcing the gas. I think only APM is only 24% of the entire portfolio we are having. The rest of the portfolio is from the long-term and the short-term gas we are having.
Okay. Great. Sir, could you please share the gas sourcing details, APM, spot, IGX, in terms of the MMSCMD? That would be really helpful for us.
I'll tell you of the 8.5 MMSCMD which we have purchased, 24% is APM gas, new well gas is 4%, and long-term contracts are 39%, and short-term is 33%.
In short-term, IGX plus spot. Is that a correct understanding?
Yeah. Yeah. Right. Understanding is right.
Okay. Sir, recently, a cut in PNG industrial prices. What is the response from the Morbi consumers? The PNG industrial volume from the level of Q3, 1.66 MMSCMD, has really gone up. Any numbers, if you could share, for the January month? What is your expectation? Yeah. Sorry. Go ahead.
Yeah. Actually, if we had not reduced the prices, it would have further reduced. From 1.68, it has basically increased to 2.2 MMSCMD. We expect when the new Saudi CP would be announced for—already, it is already there. When it comes towards the end of January, probably we will see somewhere around close to 2.6-2.7 MMSCMD, at least.
Any idea about February and March month possible?
We are expecting close to 3-3.2 MMSCMD in Morbi, sorry, on gas.
Yeah. Yeah. The last question, sir, as you mentioned, the new gas transmission tariffs are revenue neutral as of now at the current volume. Even if the 0.3 MMSCMD volume growth from the current level increases, it will hardly impact. A small kind of understanding we want from your side. As the Morbi volume is going to increase, I mean, it will increase at least 1 MMSCMD as per your guidance in the next few months. How much will it impact our gross profit margin considering the new gas transmission tariffs?
Sorry to interrupt, sir. Your voice is not audible. Yeah.
Just one second. It's approximately INR 1 per SCM.
Okay. Is it fair to understand 1 MMSCMD jump in the PNG industrial volume will have a kind of an INR 1 per SCM kind of a negative impact on the gross profit margins? Is that a correct understanding?
Yes.
Okay. Thanks. Thanks a lot, sir, and all the best.
Thank you. The next question is from the line of Amit Murarka from Axis Capital. Please go ahead.
Yeah. Hi. Good afternoon. On Morbi, just wanted to clarify the data point that you mentioned. Did you say that Q4 volume is expected to be 3-3.2 MMSCMD? Or did you say the exit quarter volume will be that?
We said in February, the volumes would be close to 3-3.2 MMSCMD. And it could be the same for February as well. Sorry, March.
Okay. Okay. Currently, what would be the run rate?
Current run rate is 2.2.
Understood. Also, on the price revision at Morbi, the INR 4.5 cut or the INR 41 price, which is there currently. With the rupee kind of depreciation that is happening, and there has been some jump in the spot LNG pricing also in the last week or so, is there any risk to that price going up with the cost pressures that could happen in the next few months? How do you think about that?
I don't think, see, this sudden increase in spot price is a very—I think it is going to be a very short-term phenomenon. Basically, because of the severe winter that has hit Europe and the U.S., it has resulted in spot prices going up. We expect the prices to again come back to initially $9 kind of a level. Going forward, in the middle of 2026, we expect a lot of term contracts to start delivering volumes into India. We expect spot prices to be much more reasonable once the winter is over, which is probably two months from now.
Sure. Understood. Just lastly, on the scheme of arrangement, by when do you think that all of it will be completed and the GSPL relisting can be expected by when now?
We are expecting a final hearing from MCA somewhere in the month of February. That will be followed by once we receive a final order from MCA and complete other formalities. Expect that by the time we get onto the next earning call, I think all formalities will be completed.
As in including the relisting of GSPL?
Including relisting of GSPL. That is GTL.
Yeah. Okay. Sure. That's all from me. Thank you.
Thank you. The next question is from the line of Maulik Patel from Equirus Securities. Please go ahead.
Yeah. Hi. Thanks for the opportunity. A couple of things. What's the update on this FGDU scheme that 100 CNG systems were supposed to come up? You got some clarification with the government of Gujarat also. Will that increase? Because in the last couple of quarters, the CNG growth rate has been consistently around 11-12% kind of a rate. By what kind of a percentage increase will you expect post-commissioning of these stations?
First of all, today is a very good day for us. Today, we have commissioned our first FGDU online stations in Morbi. Before that, also, we have started one FGDU station in Dwarka also. We have signed total 77 agreements, 78 agreements for the FGDU. They are in the various stage of construction. The way things are going, we will connect more than 10 CNG stations in this financial year and balance in the next financial year.
What kind of increase one can expect in your assessment that CNG growth, can it go back to go to the 13% kind of a rate? Because you have been, see, in the last two years, what you have done is you have converted a lot of your water booster stations to the online stations, which supported this growth, right? Because the CNG stations per se have remained constant around a 30 kind of level for the last two, three years. Now, with this number, it's increased by around 70-80 stations over the next two, three quarters, three, four quarters. Will this increase the growth rate from 11% to 13%, 14%? Or will it remain around 11%?
No, no. We are quite hopeful because if you look at the way CNG vehicles are being sold in the market, apart from that, there is a huge 45% headroom for the CNG and petrol prices. The way new technologies are coming into CNG vehicles, we are expecting 13%, at least we would like to achieve.
What's your sense on non-Morbi? Because see, non-Morbi, after many, many quarters since the last three, four quarters, it has been growing at a high to high single-digit kind of a growth. Always, there has been an expectation that the growth will come from Ahmedabad, the rural Thane, and some of the other industrial areas. It has not materialized to the extent what one could have expected earlier. Have things changed for the better for the non-Morbi volume? Can we see a meaningful growth which can change the overall needle in overall volume? Has anything changed in non-Morbi that we can expect a significant growth in the next two to three years?
Yes. Definitely. If you see, means we have started connecting all our major markets, new major industrial markets. That is Ahmedabad, rural Dahej, Kutch, Thane, UDI in Madhya Pradesh, Valsad, and surrounding areas also we have started connecting. We are expecting good volume growth because infrastructure is in place. We are in the process of getting cheaper gas compared to whatever we are getting right now. Yeah, quite hopeful about that.
One of the challenges was always the setting of the initial infrastructure. Has this been resolved in most of the GAs which you mentioned that the initial infrastructure is already in place for all these GAs?
Yes. We have started. Just to update you, we have just almost commissioned a steel pipeline for Dholera region also. Same way, we are laying, we are connecting various business parks in Dahej and surrounding areas. Thane, of course, we have to connect Boisar and surrounding areas also. Slowly but steadily, we are connecting all the major potential markets through our steel pipeline.
Okay. Got it. Thanks.
Thank you. The next question is from the line of Varatharajan Sivasankaran from Antique Stock Broking. Please go ahead.
Thanks for the opportunity, sir. I want to once again look at this outlet addition. You gave some idea as to what is going to happen next year. Effectively, that 77 being commissioned. If I were to look at next maybe three-year time frame, what is the kind of a potential addition in outlets one would be looking at? I mean, I know not an exact number, but ballpark kind of a number what you can give as to the potential based on your assessment.
You are talking about CNG stations outlets? CNG stations?
That's correct.
Okay. Yeah. I think I won't be surprised if we'll enter into a four-digit number in coming two to three years. That is, we may cross 1,000 CNG stations.
Okay. You are going to be dependent entirely on FGDU model from here on? Or are we also looking at?
No, no. In fact, we are coming out with various options, whatever are available in the market and to us. FGDU is one of them.
Sure. My second question was on this case is pending in the Delhi High Court, which is up to regulations as well as business issues. Has there been any kind of a progress on that? Are we looking at any outcome? What is the ground reality today in terms of people putting up, let's say, even the LNG or any other infrastructure? How is that?
I'm referring to the litigation pending in Delhi High Court related to open access guidelines for CGD?
That's correct.
Right. PNGRB has initiated this regulatory process for open access since early 2021. Torrent Gas has gone ahead and obtained a stay order from Delhi High Court. This stay order was continuing till 2024, where PNGRB refiled the earlier regulation and came up with a new set of regulations. They again moved Delhi High Court and obtained no-courtly order. That is interim protection available to us. Subsequent to that, Delhi High Court has decided to hear this matter fully. In fact, they have concluded the hearing on open access guideline, final hearing since May 2025. Thereafter, they have reserved the order. It was also indicated in the open court that they are not going to pronounce this open guideline principal regulation only. They are also going to deal with the associated regulation like access code. There are some issues associated with exclusivity regulation as well.
They are hearing those regulatory matters. The hearing is still going on. Once they conclude hearing, then only they will give a final verdict on this. It will be difficult to predict a time frame. Not likely to happen at least in the very near future.
Fair enough. Pending that, there is no infrastructure creation in the GAs. Is there a stay in order as of now?
There is no stay in order. Infrastructure creation is going on. It's going on very well.
Okay. Fair enough. Thank you a lot.
Thank you.
Thank you. The next question is from the line of Sabri Hazarika from Emkay Global. Please go ahead.
Yes. Good afternoon. Two questions. Firstly, your CNG volume growth over the last two, three years has been quite strong. Although the addition of CNG stations has been not to that extent. Are you able to increase the throughput per outlet considerably? Is it that large format outlets are coming up? Is there any particular reason behind growth being much faster than infrastructure additions?
Yes. I think we have focused on upgradation of our CNG systems. We have converted so many rotor boosters to online stations. If you just see, that will increase our compression capacity, just like adding a few more CNG stations, but at a lesser cost or I can say operational hassles. We are focusing on getting our existing CNG network and CNG stations, and that's the result why we are getting this growth. Apart from that, whatever we have planned for coming two to three years, as I mentioned earlier, we are planning to cross 1,000 CNG stations in coming two to three years. This will further increase our growth.
Okay. Second question is, when you say big topper STM guidance, this includes the other income also, right?
Yeah. Yes.
I mean, if I were to compare it with this Q3, it's basically 6.5 is the number which is for Q3, right? Dividing INR 502 crore with 8.4 SCM. Is that right?
Yeah. Yeah. You're right.
Okay. Just last small question. Are you in a position to give a volume growth guidance for next year given that there is some stability in the industrial side? If the price cut that you have taken is for both Morbi as well as non-Morbi industrial, or is it just Morbi industrial?
I think the volume growth guidance depends on how the prices move in with respect to propane and gas. I think we'll be able to give you a better position guidance by March, April for the next year.
Okay. The price cut is for the entire industrial, or it's just Morbi?
It's only for Morbi.
Okay. For the other stuff?
The rest of the Morbi, the other is a little, there's a premium to that.
How much? Around INR 2 premium to Morbi?
It's around close to INR 3.
3 premium. Okay.
Yeah.
Fair enough. Thank you so much.
Thank you so much.
Thank you. The next question is from the line of Lokesh Manik from Vallum Capital. Please go ahead.
Yes. Hi. Good afternoon. Thank you for the opportunity. My question is a little more broad-based. If you can give us a sense of what is the volume potential of the Gujarat market for CNG and PNG and similarly for non-Gujarat market? That is one. Second is, when do you expect these GAs to mature? What is the time frame that you're thinking of? Three years, five years? Any guidance on that front would be very helpful.
I think you are talking of the entire potential of the CNG market in Gujarat?
Yes. Yes. Yeah.
Yeah. That's a little difficult to predict because the number of vehicles being added every quarter, it's surprising to us also.
But right.
There's a 10-11% growth rate or 12% is being followed by all the companies. You can guess it if you have numbers.
Understood. Understood. You are also seeing volume coming from commercial vehicles. Is that picking up for you for your GAs?
Most of the volume is coming from commercial vehicles in the new GAs at least.
Okay. Okay. Understood. That's it from my side. Thank you so much.
Thank you. The next question is from the line of Mayank Maheshwari from Morgan Stanley. Please go ahead.
Hi. Mayank here. One quick question was related to the long-term sourcing of gas. Is long-term sourcing of gas to a higher proportion versus the bigger exposure to spot that you already have right now?
Long-term sources of gas.
Basically, right now, our share of long-term gas is 39%, which obviously we want to increase it to a much higher level. Our parent company has signed a few contracts. Volumes of that will start getting delivered this year onwards partially. I think the objective is to have a stable price, less reliance on spot, and maybe on an overall basis have 60-70% volume tied up on long-term basis.
Got it. Do you think you will get to that 70% target or so in the next couple of years? Because we are growing our CNG volume so far and LNG is coming down. When do you see that kind of filtering in terms of your gas sourcing?
Maybe by end of 2027, we should be there, I guess.
Okay. This other question was in terms of the entire CNG market as well as industrial outside of Morbi. Can you give us in terms of the infrastructure that you have created or you'll be creating over the next two years outside of Morbi, what kind of CapEx you'll be spending on non-Morbi and some of these infrastructure you're creating in the industrial side and how much of that will be split into the CNG side?
I think the Morbi, I think we have the infrastructure is already laid. Most of the infrastructure presently is going in the outside Morbi itself.
The propane infrastructure, etc., you don't need much CapEx is what you're saying?
No. That is separate. That's a separate investment which we'll be looking at. That will come to you separately.
Okay.
Presently, we are not planning. We don't have any CapEx.
Propane?
Pardon?
Yeah. I was saying, okay, outside of Morbi, how much is the CapEx for industrial? And then obviously on the CNG side, what is the value of the 700 odd?
No, no. We don't differentiate between industrial and domestic because the steel pipelines are laid which are catered to both industrial as well as the domestic connection. From there, on the PE network starts.
Okay. Okay. Thank you, sir.
Yeah.
Thank you. The next question is from the line of Somaiah Valliyappan from Avendus Spark. Please go ahead.
Thanks for the opportunity, sir. Sir, my first question is on Morbi. You did mention in terms of pricing difference around 2, 2 and a half currently, whereas volumes maybe you're expecting around 3.2 odd. In case we need to get to, let's say, 4 or 5 CNG, what is the kind of price differential that needs to exist? What kind of, I mean, gas should be at a discount of what rate?
The differential should not be there if you want to achieve 5.
We should be cheaper by, I mean, if you are neutral, will we still be able to get to 5 or we have to be at a discount?
Yes. Yes. Yes.
At neutral, we can get to five CNG?
Yes.
Yeah. Yes.
Yes. Okay. Also, second question is on this INR 4.5 price cut. Is this an entire cost pass-through or is there also some bit of margin that we have slightly given off for this INR 4.5 cut?
Basically, the reduction in spot pricing is what we have passed on to the consumers.
There is no, it's a complete pass-through. There is no impact on margins for this, at least for this level of cut unless there's going to be a spot price increase from here.
Yes.
Okay. Sir, also in terms of propane, I mean, what is the thought process there in terms of selling propane or in terms of progress here if you could give some clarity? You did mention in the opening remark in terms of the parent coming up with infrastructure for storage. In terms of work that has been done here, what we are expecting FY 2027, any volumes that we are expecting in terms of propane?
Basically, the board has decided that we should have our own infrastructure. That is for the slightly longer term. We are in talks with the relevant port authorities to have our own infrastructure, which includes the unloading and storage of propane. In the meantime, we are talking to some of the existing infrastructure providers. We have got some positive indications for importing and storing propane at one of the terminals that we should be using in the short term to start our propane journey. I think we will be gaining some market share out of the propane market that is there in the Morbi region. Gradually, we will have to build from there.
Okay. In terms of this propane infra that you're referring to, any investments from our side or it will be done by the parent and we'll have an agreement with them to take it from?
There is no infra investment which is required. It's basically they'll be putting, we'll be basically booking some capacities. Some capacity charge would be payable to the infrastructure owner, which obviously will build that in the price and sell propane in the market.
Okay.
There is no investment which is required.
Okay. Sir, if a current customer is taking from an existing supplier, so what kind of, I mean, I know it's completely commoditized. So what kind of hedge that we can have to get our volume sold there? Any differentiation that we can bring onto the table?
Basically, all these users are already registered with us, with Gujarat Gas. They already have a security arrangement in place. If they buy propane from any other supplier, they'll have to pay in advance. Whereas in case of Gujarat Gas, since we already have the financial securities, we'll give them some credit which is very valuable for these consumers.
Okay. Got it, sir. Any thoughts on FY 2027 volumes that we can have on propane? Also, how do we look at margin profile compared to the gas?
I think it's too early to comment on it. Basically, maybe in the next call, by the time we'll be in a position to tell you that we have been able to book capacities, etc., we'll be able to tell you that much.
Okay. Last question is on this CNG station addition. You did mention the conversion of booster stations. How much has been converted and how much headroom is still there to get converted to online stations?
Of the total today, we have around 33 stations. Of that, close to 415 stations are online today. That is almost 50% of the stations are online today.
The last couple of years, sorry.
Yeah. Tell me.
Last couple of years, the number of stations that have got converted, sir?
We have converted more than 40 stations.
Last two years.
Yes. From booster to online stations.
Thank you, sir. Quite helpful. Thank you.
Thank you. The next question is from the line of Dhvil Shah from Ambit Capital. Please go ahead.
Sir, am I available?
Yes.
Yeah. You are. I just wanted to know that what is the volume in MMSCMDs in the Morbi ceramic cluster overall volume, like propane plus natural gas? And what do you expect this volume to be in the next three, four years? Is it increasing or has it stagnated over the last few years?
The overall volume is close to 7.55. Of that, natural gas volume in the Q2, Q3 was around 1.65. Rest was with respect to propane.
Sir, this around 7-8 MMSCMD, is it like last five years, has it increased? Do you see it increasing in the next five years?
There is a lot of investment coming into Morbi. Some of the older units are getting closed down because their products are no more in use. Simultaneously, new units are being set up. What our experience is that the total installed capacity in terms of MMSCMD is still in excess of 8 MMSCMD. Capacity utilization is close to 7.5 MMSCMD, 7 to 7.5 MMSCMD.
Got it, sir. Thank you.
Thank you. The next question is from the line of Hardik from ICICI Securities. Please go ahead.
Yeah. Thank you, sir, for the opportunity. Just want to check on the blended realization for the quarter. For this quarter, on Q1, Q2 basis, it was a flattish realization. Despite we have taken the full impact we have seen on the industrial gas prices. Just want to know why the realization was higher despite the price cut.
The price cut was done on 1st of January.
No, no. In last quarter, the blended realization was INR 47.5, right? Even in this quarter, if we talk about the realization, it is on the similar line. The full impact, even in the last in Q2, we have taken a price cut. Part of it was yet to get accepted in Q3, right? Despite that, there is a flattish realization.
Yeah. This would mean we did not reduce the, yeah, the volumes have come down, but the prices were not reduced. That is the reason for the flattish realization. If you look at the volumes which have come down, it is more than 40-50%. There is a reduction in the volumes if you look at the Q2 numbers.
Okay.
Yeah. From around 2.13, we have come down to 1.68.
Got it. Got it. Okay.
Yeah. Yeah.
Sir, what will be your volume value for FY 2027, overall volume value in ballpark?
I think the only thing is the volume changes which happens with respect to our industrial volumes. The rest of the volumes, we can estimate a 10%-double-digit growth for the CNG segment and the domestic segment. With respect to industrial, that will be dependent on the propane and these prices, how it plays out. By March, April, we will be in a better position to tell you that volume value.
For sure. Thanks. That is very helpful.
Thank you. Ladies and gentlemen, as there are no further questions from the participants, that concludes the question and answer session. I now hand the conference over to Mr. Sandeep Dave for the closing remarks. Thank you, and over to you, sir.
Thank you. Favorable gas price regime coupled with our efforts to increase gas volume numbers, we expect better numbers in Q4. We look forward to interacting with you all in numbers environment when we meet for next earning call with full financial result somewhere around May 2026. Thank you all for your time.
Thank you very much. On behalf of Gujarat Gas Limited, that concludes this conference. Thank you for joining with us today, and you may now disconnect your lines.