Adani Total Gas Limited analyst Q&A

Thank you very much. We will now begin the question -and-answer session. The first question is from the line of Varatharajan Sivasankaran from Antique Limited. Please go ahead.

Firstly, in terms of the APM allocation for CNG and PMG, how much has it come down quarter- on-quarter?

Do you have any other question, Varatharajan ji, or this is the only question you have?

Yes, I have one more question.

Please ask.

So, you mentioned about the outlets added. Could you also give us the number of new GAs which have been started, which have started operation during the quarter?

Yes, sure. First of all, thank you, Varatharajan ji, for participating in this call. And I think you have been participating in previous calls as well, thank you for taking your time. On the APM side, as we are aware and we have been reporting, while there has been attempt by government also to make sure that CGD gets maximization of the APM gas. But there is a decline on the APM side. So, during the quarter, we were getting roughly 70-odd, 70%, 72% gas of the APM for PNG home and the CNG. So, around 25% to 28% there was a shortfall, depending upon the days and how we take it. But roughly, you can take 70% odd, 72% roughly we got the APM gas. But the plus positive side is that the prices of LNG or domestic gas have been moderated, the moderation side has remained . So, to that extent when you see our result, you will find that we have been able to manage through our good portfolio which we have been intimating to all . Our aim is always to build a good portfolio of gas sourcing. So, while there has been a decline on APM allocation and we hope this is temporary, it will go up again. And the commitment and assurance we see from government authority side, we have been able to manage through our portfolio our reasonable prices gas to be bridged by the gap of APM.

On the CNG front, we are now in across all 33 geographic. While the PNG line, national gas grid is getting built. So, we are also working in tandem and synchronization with the national gas grid developers and making sure that we are developing our connectivity lines so that there is a hookup happening once they are reaching there on the newer GAs. So, otherwise, wherever national gas grid is available, pipelines are available in all GAs, we have done the connectivity and we have started working on the last mile connectivity . In many GAs we already started connecting PNG homes, that's the reason PNG numbers are now increasing on a year-on-year basis. So, on the CNG front, we are available in all geographic areas, correct? Thank you, Varatharajan ji.

The next question is from the line of Ketan Mehta from BOB Capital Market. Please go ahead.

You mentioned about the industrial and commercials, basically there is a recovery in the volume. So, could you give us a bit more color around this? Is it primarily recovery against improving competition against liquid fuel or is it also against the propane? And what kind of margins we actually earn in the industrial and commercial segment at the gross margin level?

You have any other question, Ketan bhai?

Second thing, I just wanted a bit more strategic approach in terms of sort of understanding, as the competition with the EV is developing across the market , and as a sort of the Adani Group we have a presence in , b oth electricity distribution as well as gas distribution. So , do we plan to leverage both jointly at some point of time ? And what kind of penetration level do we aim to achieve over the next 5 to 10 years in the GAs we operate?

I think a good question. Let me deal with the second question first , which may be a complex one in the nature, and I will give first question about I & C part to Mr. Rahul Bhatia, who's our national BD head, he will respond to you, while I will touch upon briefly on that as well. So, I think strategic point of view , this has been the one question which I have received from almost various forum that how do we see EV as a competition to CNG . And our view has been very consistent that we see EV as a complementary fuel along with CNG. And that was a precise reason when EV was being encouraged and incentivized by the Government of India and several state governments. There was one view that we should see this as a problem. The other view was, we should see as a complementary fuel and opportunity. And we adopted the second option. And we still believe that India being such a vast market, I think the mixture of fuels, whether it is MS, will continue to remain, maybe HSD will slightly decline , EV will grow, CNG is going to be growing still, because so many licenses have been granted. Then we will see LNG for trucking coming and future hydrogen will be coming. So, in our view, I think these all fuels will coexist. They will be supplemented to meet the requirement of varieties of consumers. And we don't see the threat from one to another. We need to ensure that we are targeting the right audience for the right fuel. So, EV has a market segment of two-wheeler and other type of vehicles. CNG has its own target audience, including the existing old vehicles, which you could target. Similarly, LNG would be having the long-haul vehicles, etc. So, Kirtan bhai, we feel that EV would grow. At the same time, there would be a good space for CNG to continue to grow. The time has not come to see the threat of two fuels to each other. On the I&C side, I think what you are seeing is the volume growth, from our point of view. One is, certainly you have seen the numbers , around 900 new industrial commercials have come. So, they will certainly consume. More the mouth, they will eat more. So, I think these 900 consumers are also consuming the gas . On your point to the recovery in the volume , I think let Rahul give you a little more perspective , because he is the man who is dealing with industrial commercial consumers, he's our national BD head. So, Rahul, over to you.

Thank you so much, Suresh ji. Just to give you a perspective in the year which has gone by, which is FY‘24, after the Russia Ukraine war we were impacted by the increase in gas prices and our volumes had in the years F Y ‘23 fallen to about 60% of the peak volumes of all our GAs in the industrial segment. But we are happy to say that there's a lot of initiatives which actually increase that number to about 80% of the peak. So, there's been a 25% increase in our volumes in FY ’24 over ’25. And to also address your issue regarding alternate fuels, in our GAs, the major alternate fuels are furnace oil, LSHS and LPG . And we continue to engage very closely with our customers. While we do have a standard tariff for our various GAs, but whenever we find that there are customers who are challenged or who find alternate fuels attractive, then we engage with them to enter into short term, medium- or long-term contracts with firm obligations. And to ensure that we are able to give them a value proposition which is attuned, which is attractive vis-à-vis the alternate fuel that they've got. Lastly, to answer your question about propane , in our existing GAs we don't have so much of challenges or competition from propane. But yes, we are now progressing development of Surendranagar in Gujarat, which is next to the Morbi area of Gujarat Gas. And at that place propane is very prevalent and we are addressing, and we are happy to say that there are several large customers who are now converting from propane to natural gas in Surendranagar. So, we are having good progress and comfort there.

And just to add to that, Parag Parikh here . Just to add to that, if you see even from a quarter perspective, we have only seen a better uptick as far as volumes are concerned. So, on the C &I side we've grown by about 4% to 5% as far as the volumes are concerned. If you go back in terms of Y-o-Y comparison, the growth will only be much better. And this is contributed both, in terms of ensuring or regaining the industrial volumes, as well as growth on the commercial side.

Thank you. As there are no further questions, I would now like to hand the conference over to the management for closing comments.

Thank you, everyone , for participating on the Conference Call . And if you have any further questions, please write to us. And thank you for being patient on rescheduling the call by one hour. Thank you so much. Thank you.

On behalf of Adani Total Gas Limited, that concludes this conference. Thank you for joining us. And you may now disconnect your lines.