Indraprastha Gas Limited CC-Mar24.pdf ·
No present, last year we did 7.67. Moderator: Thank you. We have our next question from the line of Maulik Patel from Equirus Securities. Please go ahead. Maulik Patel: Sir, few questions. You mentioned that the areas outside Delhi and out of Delhi which are approximately 7% of your CNG volume, am I right? Sanjay Kumar: No, 90% comes from Delhi, Gautam Budh Nagar and Ghaziabad. And 10% is from the outside GAs presently. Maulik Patel: So, at what rate they grew in this particular quarter? Sanjay Kumar: I think the Delhi was flat, but other than that Gautam Buddha Nagar, Ghaziabad, they grew at around 10%. And outside GAs, the base is very low, so the number if I tell you, say for example, it grew at 149%, but that doesn't make any sense because the volume, the base is very low. So, any increase there will not be appropriate to capture the growth. Similar is with Kanpur that grew at 123%. Meerut, Muzaffarnagar, Shamli grew at 60%. So, overall, you can say that 15% growth is there in the new GAs that is the reasonable estimate because once the good numbers come and then you grow at this level. So, that will make sense. Right now, the base in couple of years is not capturing. I mean it will be, it is normal to say that they are growing at 150%-160% but the base is very low. Maulik Patel: Sir, in terms of the CAPEX, what we have done around Rs. 1,200 crores this year, is that a large part of the CAPEX is going towards the new GAs which are the areas like Ajmer, Karnal, Kanpur and Muzaffarnagar? Sanjay Kumar: Around 40% is going through Delhi and Noida, Gates Noida area and that 60% is going to the new GAs. Maulik Patel: Sir, can I just suggest something? Just the suggestion from our side. Sir, in terms of volume now if going on forward, if you start giving us in Delhi volume CNG separately that probably considers zone 1, zone 2 might be your Gautam Budh Nagar, Ghaziabad and Gurgaon, zone 3 can be new GA. If we start giving these three numbers separately, it will be easier for us to track the volume growth on each of the three geographies. I understand that all the GAs in the new will have very different growth rate, but one number across its new GA category will be very helpful from under forecasting perspective, sir. Kamal Kishore Chatiwal: Okay. Moderator: Thank you, sir. We have our next question from the line of Somaiah V from Avendus Spark. Please go ahead. Somaiah V: Sir, first question is on the growth. So, if I look from an exit of this quarter, Q4, which is next year, it looks like a 1 MMSCMD kind of a growth. So, this 1 MMSCMD entirely or say 80%- 90% you are expecting from your GAs or is there something that you are building in Delhi NCR also? Kamal Kishore Chatiwal: You see the industrial, commercial and the PNG segment, if I say the domestic industrial and commercial so that will continue to grow at around 15%. Our belief is that since the reasonable base is there in Delhi NCR, Delhi, we have around 0.65 million domestic so that we will continue to add around 3,00,000 connection. This year also we are targeting, so that is around 15%-16% of the total connections. So, that growth will continue like that. CNG whatever impact is there on VTC, we will see how we can absorb that and continue to grow in Delhi. NCR, Gautam Budh Nagar, Ghaziabad, Rewari and other regions, Gurgaon, so they will continue the CNG as PNG, they will continue to grow at 10% to 15%. That is our expectation that they should continue to grow. Somaiah V: So, I mean, Delhi, NCR, you are looking at it 10% plus kind of a growth in CNG, is this the right understanding? Kamal Kishore Chatiwal: But Deli, 10% would be a challenge because the base is also very big 70% PNG sales is from Delhi out of 50,00,000 KG per day we do around 35 from Delhi so that growing at 10% would be a challenge. I mean would be say 4% to 5% growth there, but outside of Delhi, including Noida, Ghaziabad, Gurugram, everything will grow at 10% to 15%. Somaiah V: Second question is on the newer GAs. So, what we have won in the last few rounds, so what is the total CAPEX on a per GA basis? What we need to spend to CAPEX fully ramped up and in how many years do we expect this CAPEX to be largely complete? Kamal Kishore Chatiwal: No, we are ahead of our minimum work program schedule. So, whatever the minimum requirement is there that we are fulfilling because other if we don't do that, then there will be a challenge to retain that GA. So, that obligation we are doing, but any expense that we are doing GA wise, we are doing it judiciously so that the asset utilization is there. We don't want that we invest money, and that the asset is not utilized, it is not giving returns. So, for that, the conscious call is there that wherever we can charge the areas, wherever gas is available, we can charge it, so there we are spending. Fortunately, in most of our GAs other than say the new ones like Banda, Mahoba, Chitrakoot and Ajmer, some areas. Other than that, charging gas to those areas is not an issue. We have the trunk pipelines as well as the connecting lines ready. So, we are a little bit judicious in spending in our new GAs. So, that nothing is idle. So, in that sense, Ajmer, we have spent and now we are a little cautious in expanding aggressively in those GAs. Somaiah V: So, the current CAPEX run rate that we have, so just to keep up with the minimum work program. So, what next couple of years, we will continue to spend in a similar way. So, what is the CAPEX outlook for the next couple of years very broadly? Kamal Kishore Chatiwal: This year we are targeting Rs. 1,700 to Rs. 1,800 crores. We did last year 1,270. Now this Rs. 1,700-Rs. 1,800 crores is mostly in our core areas as well as some amount in the LNG and CBG. So, other than that, most of the CAPEX would be in the core area. And in case any opportunity of say inorganic growth or some new renewal opportunity is there, so that is not included in that Rs. 1,700-Rs. 1,800. Somaiah V: So, basically around Rs. 1,200-Rs. 1,300 crores is what is going in our core area as of now and for this year, we are expecting that we will be able to, towards diversification in LNG and CBG sourcing. We will spend around Rs. 400 crores or something like that. And this amount is something which is spent not specifically on MWP. It is much more than, a little more than MWP because we have to basically build basic infrastructure in all the new GAs. And as the amount in different GAs are concerned, different geographies has different challenges and the size of the GAs are different. So, from that perspective, comparison among the different GAs would be difficult, but from our side we are basically focusing on whatever infrastructure we have already built to consolidate it and then try to cater to the needs of the customers. Moderator: Thank you. We have our next question from the line of Nitin Tiwari from Phillip Capital. Please go ahead. Nitin Tiwari: Sir, it would be helpful if you could provide some more color on the vehicle addition part. So, you give the vehicle addition number for the full financial year, so what is the number for the 4th Quarter? One is that and also breakup in terms of different vehicles and how has the trend been in terms of monthly progression. I mean if we look through January, February and March, so how has the vehicle addition proceeded? So, that would be my first question? Kamal Kishore Chatiwal: So, if I tell you about the conversion numbers, each bill number, the latest one which is available is 15,500. I am talking about total including retro fitment. March, the number was 15,700; February, it was 15,800; January was may be because of the the new models were available, it was 19,000; before that December and prior period it was 13,000-15,000 kind of numbers. If you talk about specifically I think you are referring to the impact of EV, so if I talk about specifically the taxi segment, that number is basically moving up and it has reached 2100 in April, March also it was around 2000, February it was around 1950. And before that January, it was 2300; December it was 1700. So, it is kind of moving like that. Nitin Tiwari: So, basically segment is not looking impacted to you in terms of like because of EV policy or any situation, right at least for now? Sanjay Kumar: Yes, at this moment, we don't see any negative impact of the EV policy on taxis being added to. Nitin Tiwari: And sir, my second question is related to the other CNG volume opportunities you were exploring with respect to interstate buses and dumpers, so would be helpful if you can provide some update in terms of, if there is any progress in terms of conversion of dumpers or interstate buses? So, that would be my second question? And also like in terms of BTC buses how many more are remaining for conversion to EV as of March? Kamal Kishore Chatiwal: Regarding this conversion of dumpers, so we have sanctioned a pilot study in one of our GAs Banda and Amirpur area and that is the mining and sand area. So, there we will be demonstrating 2-3 dumpers conversion and then demonstrating the benefits of conversion to the transporters there. So, that should be on stream in another one month or so. In addition to that, regarding BTC, so we have around 1200 buses, they have gone off road and over 13 stations they have been decommissioned. The balance is I think another 1700-1800 buses including some spare that they have. This is including the spare capacity that they have 1700-1800 more or less, so that we feel they will go away in next two years’ time and what was another question? Nitin Tiwari: So, it was on the dumpers and interstate buses, so you were? Sanjay Kumar: We are in discussion with the Uttar Pradesh, Uttarakhand and Rajasthan, so they have agreed to do some pilots with 200 odd buses, Uttar Pradesh has agreed and Rajasthan with 20 buses and Uttarakhand also with 200. In addition to that, Uttarakhand has also, I think, lowered the tax on the CNG buses. So, there was some news item regarding that. So, as you are aware that CAQ mandate is there that within Delhi NCR, only that Euro-VI compliant and CNG buses are allowed. So, that is helping us when we discussed with the state roadways, so they are positive about converting to CNG and we have told them that enroute we can provide them that refilling facility. So, with this 200-300 odd buses from UP and Uttarakhand and Rajasthan also 20 buses, so we will be able to demonstrate it to them and hopefully in future more conversions will take place. Nitin Tiwari: So, any sense on like, what are the per day consumption of these buses could be, the interstate buses and second sir, in terms of dumpers also, so what is the feedback from the dumper operators when you are interacting with them because this would be a significant cost for them to convert their dumpers. So, are they basically early signs of any interest from the dumper operator? Sanjay Kumar: I think if they if they have one to 1.5 years payback time for the 10-12 lakhs that they have to spend, so they are positive about that that they are willing to experiment with that. And once we show them what is the average and what is the filling time, everything and right now our infrastructure also is that in nascent stage there. So, we have to set up some big CNG stations for refueling those dumpers and all. So, that work is in progress, but for demonstration we can demonstrate in our two stations that we have commissioned, so that we can do and as also the Interstate buses. Kamal Kishore Chatiwal: 160 interstate buses Uttarakhand government has already got and around 150 or 200 is in the pipeline. Nitin Tiwari: Sorry, how many buses they have already required? Kamal Kishore Chatiwal: 160 is that they have already bought. Nitin Tiwari: And 200 are in construction and their per day consumption or any broad understanding on the consumption that they have?
That was one, another reason was last year we had taken some offsets for the expenses which we had already incurred on higher side during FY21-22. If you see the full year CSR expenditure 22-23, we booked Rs. 14 crores and in 23-24 we booked around Rs. 34 crores. Sabri Hazarika: No other item beyond this in the other expense, which everything else is normal, right? Is there anything else which is? Kamal Kishore Chatiwal: Apart from that, normal increase in. Sanjay Kumar: One more increase was there that employee increase onetime because of this Silver Jubilee. So, we rewarded the employees for their consistent performance. So, that is a onetime increase due to the silver jubilee celebration. Sabri Hazarika: That is part of the employee cost? Sanjay Kumar: That would be part of employee benefit expense, not other expenses. So, apart from that normal increase in R&M and few other heads, legal and professional is one where our case is going on for Gurugram and Faridabad, normal increase in those two heads otherwise, it is all normal. Sabri Hazarika: And what was the CNG station total number of stations at the end of the year? Kamal Kishore Chatiwal: 882. Actually, we added the 126, out of this 90 were new stations and 30 were upgrade, upgrade in the sense that we put up to three dispensers on the existing stations. We upgraded the compression capacity. So, you can say that 90 new stations and 36 upgradation of the existing stations. So, the total number would be 126. Sabri Hazarika: And 882 is the grand total? Kamal Kishore Chatiwal: Cumulative presently we have 882. Sabri Hazarika: And in kg terms, what would be the CNG volumes? Kamal Kishore Chatiwal: KG, the compression capacity is 110 lakh kg per day, and we are doing around 50-52. Sanjay Kumar: Those are on individual days, on weekends, the average is 4.5 million, 45,00,000 per day. Sabri Hazarika: Sir, just on your volume front, so you have given a guidance of 9.5 MMSCMD. So, this is roughly like 13%-14% sort of like Y-o-Y growth, now you have mentioned that in Delhi, you would be growing at 5% in NCR, rest of NCR probably 10% and other GAs as a whole 15%-16%. So, Delhi being 60%-70% of the mix, I think somehow the numbers don't add up. So, do you see anything on top of that like DTC is also like going down? Is there anything else beyond these things that is making you confident of like clocking 9.5 MMSCMD? Sanjay Kumar: Actually, one is the industrial segment and Delhi also Delhi NCR the complete region, the industrial segment we are confident that we can increase the volumes there. I think 15% growth there. In addition to that we have started the LNG operations also. So, if you see there is a mention of LNG sales also that will commission in the last quarter. So, those sales will come up and we are in discussion with a few operators. So, in case that volume ties up, so that will increase the numbers. Moderator: Thank you, sir. We have our next question from the line of Nitin Sharma from M. C. Pro Research. Please go ahead. Nitin Sharma: So, what is the plan for the LNG segment from FY25 and FY26 perspective and some quantity data would be helpful? Sanjay Kumar: I think we are planning one station we have already commissioned and five to six stations in are in advanced stage of planning and construction. So, those should come on stream in this year. And we also have a MoU with the conqueror for their captive consumption. So, we will be setting up one station in their depot, one in Noida region and another in Bangalore. Nitin Sharma: And how much would be the volume? Sanjay Kumar: So, presently they have a fleet of around 100 buses. That is the number that we got there, but they are open to increasing those numbers based on their experience of this initial LNG trucks that they have. So, they will increase the number as they get more and more experience of those running of those LNG trucks. Nitin Sharma: So, just help me understand in general what would be the consumption for one bus, just to understand the content? Sanjay Kumar: One LNG, again depending on the run. So, that will consume 70 to 80. Same number as bus or any other 70 to 80 KG per day. Moderator: Thank you, sir. We have our next question from the line of Chirag Maru from Key Note. Please go ahead. Chirag Maru: Sir, from the perspective of backward integration, I wanted to understand what kind of effects are we going to do for CBG plants? Kamal Kishore Chatiwal: For this year, we are expecting that around 10 numbers of CBG plants will be added. And the CAPEX should be around anywhere between Rs. 200 and Rs. 300 crores. Chirag Maru: And what kind of benefit can we expect from these within 10% to 15%? Sanjay Kumar: These will be around, I think, 20 metric ton per day plant and based on that around if you are adding around 2,00,000 CMD will be added to our source and the benefit here is that this will be available in our GA. And the transportation cost, which is there from maybe Western coast to our GA that is the savings which we will have from the sourcing point of view. This will be the cheapest gas, even as compared to APM gas. And in addition to that, Gujarat VAT is what additionally we will save which is presently levied on the gas which is coming from Gujarat. Chirag Maru: And sir, I just wanted to understand one thing, a couple of private CBG companies are focusing on creating a hydrogen plant on an EPC basis for their clients. Is it something that I just wanted to know if IGL is also pursuing something into a hydrogen phase or not? Sanjay Kumar: Yes. I think we are doing a pilot with the IIT Jodhpur and IIT Delhi. Jointly, we are doing a pilot on hydrogen and see what their impact on the network on the transportation segment is. So, those study and that will come up in Jodhpur area. That pilot we are doing and based on the study further action will be taken. Chirag Maru: Sir, when can we expect an update on the same in the next one year timeframe? Sanjay Kumar: I think it should, FY24-25, we should see some results of that study. Moderator: Thank you, sir. We have our next question from the line of Kirtan Mehta from BOB Capital Markets, please go ahead. Kirtan Mehta: One question on the cost side. When we look at our gas purchase cost, sequential decrease is around Rs. 0.6 to Rs. 0.7 per SCM. This has been lower than some of the other CGDs which have reported around Rs. 2 per SCM cost decrease. The same has also happened during the last quarter as well, where again our decrease in the gas purchase cost was lower than the other CGD. So, are there any particular contracts which are restricting the decrease in the cost for us? Same was the question, related also with the OPEX where the run rate has gone up from 5.7 per SCM in the last quarter and Rs. 6.5 per SCM. That is the second part of the question. So, is there any one-offs in the OPEX that has increased this time? Will it revert to normal level again? Sanjay Kumar: So, I think the cost of gas for us has gone down by Rs. 3.5 from 35.3 to 31.8. That is in SCM terms, so that is the number that, please check the number, I think it has gone down by Rs. 3.5 during the year as compared to the previous year. Kirtan Mehta: I was actually talking to Q4 versus Q3 numbers and Q4 versus Q2 numbers? Sanjay Kumar: So, that could be, I think from 37 to 32.63 to 50 paisa decrease on a sequential basis. Is that the number you are talking about 50 paisa decrease in the Q3 to Q4? Kirtan Mehta: Yes, when we compare this number with the other CGD's which we reported, the results, this includes turning out lower like the other CGDs have reported at least Rs. 2 reduction sequentially? Sanjay Kumar: Reduction, maybe the base is higher. They are doing lower than 32. So, the final number is important because maybe our Q3 was anyway lower.