Mumbai-based Mahanagar Gas Ltd (MGL) sees its procurement costs coming down on account of the government's proposal to have unified tariff across the country, which will consequently benefit the retail and commercial consumers.
The move will help the company in getting access to gas from any import or domestic facility at a unified tariff, putting it in an advantageous position.
However, the transmission costs may rise marginally for the firm.
Talking to analysts about third quarter performance during a conference call recently, the company management said, "The opportunity that we will get is to access gas from any import or domestic facility at a unified tariff."
At present, the price of gas varies across different regions of the country due to various factors. Most often, the consumers nearer to the source often get the gas at a cheaper rate, while those in far away interiors/locations end up paying more.
MGL is also preparing to participate in the bidding for smart cities, where it will compete against the likes of GAIL and oil marketing companies (OEM) with whom it normally partners in the normal course of business.
MGL, Delhi's Indraprastha Gas Ltd and Gujarat Gas are some of the major city gas distribution (CGD) companies operating in the country.
Under the ambitious smart city mission, the government has set targets to launch a plan to replace LPG (liquefied petroleum gas) connections with PNG (petroleum natural gas) in urban identified areas which will be developed as modern localities.
Till present, Petroleum and Natural Gas Regulatory Board (PNGRB) has awarded CGD operations rights to companies in 91 districts. It has plans to take it to 174 districts, divided into 86 geographical areas, requiring an investment of over Rs 50,000 crore.
The current exposure of natural gas in India is just over 6% as compared to 24% globally. The government aims to match the global standards by year 2030.
According to MGL executives, the company is in expansion mode in its existing areas of operation and beyond. It currently has connected over 1 million households with piped natural gas and is operating 212 CNG stations supplying CNG to more than 590,000 vehicles.
During the latest quarter, MGL witnessed a growth of about 7.1% in overall sales volumes over the year-ago period. CNG sales volumes grew 6.6%, domestic sales volumes 9.9%, commercial sector 6.4%, and the industrial sector sales 7.8%. Overall, the PNG volumes grew 8.4%. The gross margin has also improved to 53.4% as compared to 51.5% in the corresponding quarter of the previous year. "Improvement in the gross margin is mainly due to better price realisation linked to alternate fuel prices in case of the industrial sector, commercial customer category, and also a relatively favourable exchange rate," the management said at the start of the conference call.
Further, Ebitda (earnings before interest, tax, depreciation and amortisation) margin has been recorded at 34.6% as compared to 33.1% a year ago. The net profit after tax grew 25.2% to Rs 123.99 crore from Rs 99 crore in the corresponding quarter of the previous year, the company added.
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It will help in getting access to gas from any import or domestic facility at a unified tariff
However, the transmission costs may rise marginally
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 "Mahanagar Gas")
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