We will now begin the question & answer sessi on. Ladies and gentlemen, we will wait for a moment while the question queue assembles. We have our first question from the line of Nitin Sharma from M. C. Pro Research. Please go ahead.

Two questions. How much was the APM allocation in the Quarter and can you please provide the breakup of different sourcing of gas; HPHT, non-APM, spot, plus term. And then I have a followup.

Total allocation has been around 78% domestic APM and non-APM and 4% was HPHT; that makes it around 82%. And around 17% was term contracts of RLNG and small volumes spot on IEX also.

Secondly, can you just help us understand how do you see APM allocation coming over the medium term?

Over the medium term, we expect the APM a llocation to go down further. Although in the 4th Quarter from 1st of January, there has been a slight improvement in APM allocation. We got an additional 1,20,000 more from 1st of January. Bu t over the medium term, we feel that as more and more GAs will get commissioned and domestic production is not keeping pace with that, the allocation is going to go down slightly and we will have to make up with, I think, either the spot or the HPHT volumes.

And if I can squeeze another small question, that would be, where do you see weakened conversions rising from here? This Quarter itself, it was around 15,000. Is there any possibility for some price cut at the retail level that could augment the vehicle conversions, something that could happen? What's your view on that?

Actually, we are focusing on our new GAs as well as the satellite towns of Delhi. In some of the GAs, we have in fact reduced the prices. For example, Rewari, we have reduced the prices by Rs. 3. And in other GAs, say Kanpur, Muzaffarnagar, Karnal, Kaithal, Banda, Mahoba, or Ajmer GA, we have not increased the prices to make th em more competitive. In spite of a decline in APM allocation, we have not increased the prices. There, we are seeing that the conversions are picking up in those GAs. As also in Rewari, we are seeing that the conversions are picking up.

We have our next question from the line of Kirtan Mehta from BOB Capital Markets. Please go ahead.

Recently you talked about adjusting the pricing in some of the GAs, which is helping to pick up the vehicle conversion growth. How do you see that? How could you accelerate or what are the other steps that needed to accelerate the growth in the other GAs, and what could be the potential growth that we can achieve over the next 2-3 years outside Delhi?

One of the areas that they have identified is the dumpers that are used for construction for ferrying construction material, sand, marble, etc., and especially those areas where the daily transportation is within a limited area, say 50 km to 100 km, there we feel that if we can convert that this will be good additional volume because the numbers are huge. If I take an example of Banda-Mahoba-Chitrakoot, in that GA, we have around 6,000 dumpers being used daily. If we can convert a fraction of that, say 10%, 15%, or 20% in the next 1 year, then the volume growth will be huge because each dumper consumes around 80 to 100 kg per day. To make that possible, we are now converting 2-3 dumpers to demonstrate to the operators there that they will get what is the advantage of conversion to CNG. To demonstrate the proof of concept, we are converting some of the dumpers and showing it to them. That strategy we will adopt in other GAs also wherever these dumper numbers are there. In addition to that, also LNG maybe in the commercial segment or in the bus segment; that is another area that we will be looking at in addition to the long haul transportation that in any way we are focusing on LNG.

Would you also be considering giving some of the incentives for the conversion for thesrs? Would there be a possibility to consider them? We have seen this kind of scheme being launched in Maharashtra with some initial signs of success. So, is there a possibility of replicating in the northern area as well?

Yes, that will be a possibility. But before that, we need to have the infrastructure in place. If we have the scheme and we don't have the infrastructure, that's another area that we are focusing to make big CNG stations where al l these dumpers…. because they will be needing a lot more space for filling and all. So, we are going for some big stations in these areas and it will be synchronized with the scheme. The scheme would be needed, but before that, the infrastructure would be needed.

You also talked about adjusting the industrial pricing scheme to incentivize their usage. What are the thoughts and the considerations?

Basically, our pricing policy has been designed for monopoly. In the CNG and domestic market, we are a monopoly. But as far as the industries are concerned, we are not a monopoly because other alternative fuels which are competing with our gas are present. So, we are making our pricing policy flexible in line with the other companies, where we can offer a customer-specific price based on the volumes because the need of the hour is the growth. And hardly any additional charges are incurred on supplying these clusters because they are already connected and they suddenly switch it off, the supply they stop taking. So, we can reduce our S&D charges and we can reduce our margins there, but certainly we can maximize the volume. So, the policy will be customer specific so that the volume can be brought to the fold.

Is there a possibility to give a minimum discou nt to the alternative fuel scheme as well?

Just to supplement the question, I think it will not be a fixed discount kind of a thing. But while pricing our products, that will be one thing that we will be keeping in mind.

We have our next question from the Line of Pr obal Sen from ICICI Securities. Please go ahead.

Sorry you had to repeat this. I could not catch the first answer completely. You said that APM allocation had fallen to about 78%, about 4% came through HPHT sources, and the balance would have come from essentially spot LNG. I just wanted to get a sense, again, of what does our overall sourcing mix looks like to be. What sort of term contracts do we have in place? How much of HPHT do we have in place in terms of contracts?

I will again repeat that 82% is from APM and HPHT, 17% is from RLNG from term contracts that we have; long-term and medium-term contracts. That is based on Henry Hub linked as well as Brent linked and JKM linked also. And small volumes of around 60,000 or so during the Quarter, we sourced from spot through IEX.

Sir, just to understand, if I can just ask a follow -up; this Quarter if you see, the margin of course has grown on a YoY basis, but the margin decline that has happened on a QoQ basis. That is entirely attributable, therefore, to the reduction in APM allocation plus what you mentioned that you did hold the prices and changed in some of the non-Delhi areas and the reduction in prices in Diwali. That's how we should look at it? That's the reason for the margin dip on a QoQ basis?

Yes, that is the major factor that APM has gone down by around 9% to be precise, from 87% to 78%. In addition to that, we had a one-off, I think, dividend income also. That's an impact in PAT that around Rs. 72 crores of dividend income was there. That is the impact on the PAT, not on EBITDA.

Where did we receive that dividend from?

The dividend from our associates MNGL and CUGL, Rs. 72 crores.

Last question, sir. Any volume guidance you would like to hazard? I know it is very difficult given the uncertainty, but as of now for FY25, any percentage volume guidance we are giving in terms of what we expect?

For FY25, we will be targeting 10 million.

Average volume throughout the year you are targeting 10 MMSCMD?

That will be closing FY25 at ten MMSCMD.

So, exit rate of 10 MMSCMD is what we are targeting, right?

We have our next question from the line of Maulik Patel from Equirus Capital. Please go ahead.

Sir, on the sourcing side, as one expects that APM allocation will continue to go down in the coming years, what will be the optimal kind of the breakup in sourcing you would like to see from mix of long-term LNGs, spot, and HPHT?

Our effort would be that whatever volume decline we see in APM allocation, we try to make up with CBG volumes also because we have LOI fo r 20 CBG plants. Out of that, only five have been commissioned. In addition to that, we are ourselves setting up 10 CBG plants. The plants that we will be setting would be of slightly bigger capacities. In volume terms if you say, we will be targeting somewhere around 2 lakh volumes from our CBG plants and maybe another 2 lakhs from the outside parties. So, 3-4 lakh volume is going to come. Out of that, only 10,000 odd has come. So, whatever decline is there in APM, we will try to first make up with the CBG because that is the cheapest available gas presently; even 10% to 15% cheaper than APM. So, that would be our target. And in our GAs, our consumptions are such that we will be able to absorb those volumes in our network. That is one area. In addition to that, now that the spot prices have softened a bit, we expect that lu crative contracts would be available because our long-term contract is expiring in 2028. So, anyt hing comes up for renewal now that the prices of spot gas have softened, we expect some good contracts to be available for the long term.

Sir, on the CBG side, what we understand is that it's extremely difficult and challenging to ramp up the volume in the CBG because of the unavailability of the feedstock. Basically, we do not have a consistent supply of feedstock from the market and the markets are not big enough or probably it carries, then the logistic costs are very high. Is it the right assessment?

Partially you are correct in your assessment. Bu t if you have a good technology provider and in a few days, you will hear an announcement from our side on the plants. There we are very selective in choosing the technology partners. And whatever technical hitches are there – I understand that there are quality issues that CO2 percen tages in BIS standards and methane percentages, the impurity levels are slightly hi gher as compared to CNG or PNG requirements in BIS standards. Our effort will be to make it as close to or even better the present quality of CNG and PNG. For that, this will be a preferred source for all the CGD companies. That we will be demonstrating. And in a few days, we will be announcing those 10 plants. One is already under construction and nine more we will be a nnouncing. And the sourcing of raw material for all these plants will not be constrained because there will be a variety of sources starting from pressed mud or agri waste or MSW waste. All those will be there. In a few days, there'll be an announcement regarding the same.

How many Quarters it will take to ramp up to this 0.4 MMSCMD , 3 to 4 lakh kind of volume from the CBG, and what kind of timeline are you expecting?

Sir, I missed the initial remarks. Did you give any breakup between your Delhi volumes of the CNG or non-Delhi volumes in your opening remarks?

Around 63% of volumes are from Delhi and 37% is non-Delhi.

What could have been the growth between these 2 segments, Delhi and non-Delhi, compared to the previous year?

They have been growing at around 2% to 3%. It is basically absorbing the impact of DTC and DIMTS. So, we are able to just grow at 2% to 3% after absorbing that impact. The other segment is growing at 7% to 8% outside of Delhi. And the new GAs, the base is very low. If I tell you the numbers, the growth percentage, it will be very very high. It is so low that once if I tell you that they are growing at 60%, that doesn't make sense because the base is very low. But we are seeing good growth over there.

We have our next question from the line of Vipin Goel from Mirabilis Investment. Please go ahead.

Sir, just 1 question. You stated that about 82% was the APM and then the last part was a term contact, 17%. Basically, the 17%, what would be the volumes? And then, if you could just tell us about the contracts, the total volume that has been contracted? About 2.2 is what I remember from the last conversation. You can just revise that number.

Now that 2.2 number we have increased it to 2.35. After taking internal consumption and technical losses into consideration, the total sourcing is around 2.35. This includes HPHT volumes also. So, 2.35 you can say is mid term and long term. Mid term is 1.77 and 0.58 is long term.

On the pricing of these two – the mid term and the long term – average pricing?

Mid term would be linked to Henry Hub. So, that's 115% of Henry Hub plus some constant of say 5.5 to 5.6; those kind of volumes. So, landed would be somewhere around $13 to $14.

With this CBG kind of ramping up and APM going down, would we stand by with our earlier margin guidance of 7.5 to 8 or is there any change in that?

That remains 7.5 to 8, would be our endeavor. And if it goes down below, then we may have to increase the prices. If it goes above, we may have to reduce the prices. But around 8, we are targeting.

We have our next question from the line of Amit Murarka from Axis Capital. Please go ahead.

We stand by the guidance of exiting the year FY25 at around 10. Right now, the cab aggregator is basically the incremental volume s, the conversions to taxis, th at will have an impact on the new additions. But the present impact is of DTC, i.e., converting to electric. During the 9 months, we have seen around 950 buses being converted. So, you can say around 40% DTC conversions have already taken place. And we have absorbed that impact. In fact, we have grown slightly in Delhi due to that, 2% to 3% growth, whereas the private vehicle growth has been very robust. At around 8% to 10% growth is there in the private vehicle segment.

But I am still wondering like exit FY25 versus exit FY24 is 11% growth versus the recent 3-4 Quarters have been only 3% to 4% volume growth. So, where will that additional 7% to 8% growth come by, particularly when we expect slowdown in the cab aggregator volume?

If you know the CGD sector, for the full year if we had planned some stations, the last Quarter is where commissioning of all the stations co mes up. So, in this Qu a r t e r , w e w i l l b e commissioning close to 60 CNG stations. Some of them are in new GAs, some of them in the existing GA of Delhi and NCR area. Once those come into stream, we feel that the volume growth would be there because right now we are seeing every month when we analyze, there are days of the weeks when we are already crossing 9 million. So, it's a question of the average because on weekends, our sales go downs. Maybe we may have to think about some weekend discount or something like that to ramp up the sales on those 2 days. Otherwise, we feel that nine should be consistent and once these 60 odd stations come online, then also, we feel that we should exit around 9.

Just one last question on OpEx. Actually in the last 4 to 5 years, your OpEx has been consistently going up – I believe it's because of the new GAs. But is there any breakup of EBITDA like how we gave you a break up of volume? Is there any breakup of EBITDA also that you can share between Delhi, non-Delhi, or say for the new GAs?

We do not show the breakup of EBITDA as such. Internally, we evaluate each GA-wise performance. At this point of time, it will be difficult to compare other GAs which are in nascent stage and the majority of the profit comes from Delhi NCR region basically because the volume is lesser in the new GAs. And presently the pricing policy which we are maintaining there, that is aimed towards the growth of business and fu ture opportunities rather than profitability. Barring one or two GAs, all our GAs are profitable at this point of time. That's what we can share at this point of time with you. Seeing EBITDA level for each GA will be a little premature at this point of time.

We have our next question from the line of Yogesh Patil from Dolat Capital. Please go ahead.

As of now, we have not noticed any significant decrease in the number of cabs and taxis which are being registered. Rather, the total number of vehicle population is around 15,000. And as the new variants are coming up from the OEMs, we expect that the number of vehicles are going to increase.

Out of that 15,000 vehicles per month addition, what would be the taxis or cabs addition monthly basis?

If you talk about breakup of conversion, approximately 7,000 is private cars and around 5,500 is commercial vehicles which includes taxis, goods carriers, and three-wheelers, and around 3,000 is retrofitments. That's the broad breakup : 6,000 plus 6,000 plus 3,000. And the specific impact if you are asking about the aggregator policy on the sales of taxis and three-wheelers, I think it's only 2 months data which is there. To meaningfully take out any trend, I think let us wait for one more Quarter and then we will be able to answer this.

The last question from my side. Sir, we wanted to understand, are you able to capture the net CNG vehicle additions? More than 15 years old CNG vehicles getting replaced by the new CNG vehicles is just a replacement to the old ones? This type of vehicle addition will not be a CNG volume growth driver. So, my question is, do we have any net vehicle addition data which will reflect the real picture of the CNG volume growth in the coming days? Are we tracking or do we have any kind of database track?

If you ask this, I this there is no scientific way because there is no data which is coming from the.

Actually, the data that we track is from the RT O, the number of vehicles getting registered and the number of CNG vehicles already registered. In case, after 15 years, a vehicle is getting deregistered, that number will go down. The numb er of CNG vehicles will go down, and there will be no net addition. We track the data from RTO.

We have our next question from the line of N itin Tiwari from PhillipCapital. Please go ahead.

Sir, my first question is related to infrastructure spend. Can you help us in terms of what is the mix of spend between the city of Delhi and outside Delhi for this year and as well as like as far as our forecast is concerned? How much percentage are you trending in Delhi and what percentage are you spending outside?

For the 9 months, we have spent a total of Rs. 859 crores during the first 3 Quarters of the current year, and Delhi makes up of around Rs. 400 crores. Our GAs in UP is around Rs. 300 crores and Haryana and Rajasthan are around Rs. 150 crores. That's the broad breakup.

Yes, we had a discussion not only with Rajasthan and Haryana, UP also we had a discussion and Uttarakhand also. UP has agreed to deploy 60 buses, Uttarakhand around 45, Rajasthan has agreed to start a pilot with 20 buses. They w ill be converting 20 buses from Ajmer depot and then going up to Delhi. And then, talks with Haryana are also in progress.

Sir, lastly, any guidance that you can give us in terms of DTC buses? What is the number if we look at DTC and DIMTS combined? And how can we look at this number by the end of FY25? Are we expecting any more retirement of CNG buses and addition of EVs?

DTC around 3,200 buses are there, so almost 40% of them have converted to EV. And the target is that by FY25, all of them will be converting. DIMTS as such, there is no policy there that they will have to convert. But whatev er old vehicles are getting retire d – they have already retired 500; so the total number is around 3,900 or so. Five hundred have retired. Those numbers will go down slightly, but only the DTC numbers would be converting to EV.

We will move on to the next question. We have our next question from the line of Vikas Jain from CLSA. Please go ahead.

I just want to understand, you said that Delhi is about how much? 60 how much percent of this current volumes? The 3Q volume, how much is Delhi?

63%.

So, that's about 8.5 MMSCMD was the volume of that about 5.3 is what Delhi is. Now, from 8.5, you are talking of ending FY25, i.e., in 5 Quarters at about 10 MMSCMD. That's roughly about 18% increase. And this 5.3 with more DTC buses getting retired into EV, that you are saying currently is growing at 2% to 3%. That is unlikely to pick up, right? So, if you have an extra 1.5 to come from, we are basically banking on the other 3 MMSCMD or so adding to giving a 30% to 35% growth in the next 5 Quarters. Is that how we are thinking of things?

Delhi also, we are focusing more on the industrial and commercial segments. That is one segment, the industrial segment, where we see a lot of potential. And in the commercial segment, recently there has been a ban on the usage of diesel gensets. So, we have got a lot of requests for conversion of diesel gensets to gas. That is another area. Second is the domestic PNG segment where we have the connections, but the billing part is taking time because the last mile connectivity is still undergoing. We are adding 2 lakh connections every year in Delhi. These are the 3 segments that will make up. In addition to that, the CNG infrastructure, we are increasing the dispensing capacity to ease the queue situation. Once that improves, we expect that more and more vehicle conversions would be there.

Simply put, sir, you said that currently Delhi on a net basis after adjusting for the loss from DTC is growing by about 3%, right?

This, in the next 5 Quarters, do you expect that this number, 3%, could be significantly higher because there will be more loss, right? More DTC buses will get converted incrementally.

No, what we are saying is that once there is a mandate of CAQ where they have said that the interstate buses entering Delhi, they need to be either CNG or EV or Euro VI compliant buses. Right now, they don't have Euro VI compliant but CNG they can easily convert to. That is one segment where whatever loss is there and those volumes will…. The depot for filling up the stations would be in Delhi. One of the filling stations would be in Delhi exclusively for them. These are the kind of strategies that we feel would make up. In addition to that, we are also looking at conversion of dumpers in other GAs. Those are the big volume vehicles. Just to give an example, previously also I gave the example of Banda-Mahoba-Chitrakoot where we are targeting 6,000 dumpers. Even if we are able to convert 50% of them, that will make up for the loss of our DTC volumes. To make that possible, we are demonstrating by converting a few dumpers. We are putting up a big CNG station to make the filling experience more joyful, plus the economic advantage would be passed on to them.

And sir, this 8.5 number in 3Q, is this somethin g which is now looking much better or it's in that vicinity only, as we have got into January and all of that?

8.5, we expect that the last Quarter we will be ending at around 9.

So, the average for 4Q could be 9, almost?

Almost 9.

Just one final thing. The allocation that you gave for domestic gas of 78%, 4%, HPHT, etc., that is for all of your volume or that is for domestic PNG and CNG only?

The allocation is only for CNG and domestic PNG.

We have our next question from the line of Devang Patel from Sameeksha Capital. Please go ahead.

Sir, we had taken some pricing increases in Q3. Are we on track to come back our EBITDA over 8 per SCM?

We will be nearing around 8 because we are also focusing on increasing the volumes. So, we don't want to increase the prices. We will keep the prices to a moderate level so that conversions don't get affected. But at the same time, the margin we are targeting is around 7.5 to 8.

Sir, just to clarify, how many DTC buses are remaining for conversion now, in the absolute number?

As you are saying, all the 1,800 you expect to convert by the end of FY25?

FY25 or FY26, I think 1-1/2 to 2 years, that is the time they have given us.

Sir, the CapEx that we are doing now is lower than what we had guided to in earlier Quarters. So, for next year, what kind of ramp up in CapEx are we looking at?

Next year also, we will be doing around Rs. 1,400 crores to Rs. 1,500 crores. And there are 2 segments that we will be focusing on; one is the CBG segment and another would be the LNG segment – so setting up of LNG stations and putting up CBG plants. But overall CapEx would remain in these 2 areas. In case of any opportunity where there is an acquisition opportunity, that amount is separate. It's not included in this.

CBG and LNG itself would be how much of this Rs. 1,400 crores to Rs. 1,500 crores?

Overall total may be around 20% of that.

Sir, just to clarify on what you said earlier on the discounts for C&I customers, do we not give any incentives or discounts for large volume buyers?

As we have confirmed that, not for commercial but for industrial customers, we are making this policy because the volume is large and we will be offering the customer-specific prices so that they can switch over from alternative fuel to gas.

In the near term, do you expect that volume from industrial customers to go up because alternative fuel prices have also gone up?

Yes, we are expecting the volumes of industrial; rather, we are targeting those volumes. We see that as an opportunity. Industrial and commercial are the 2 segments that we are focusing aggressively on because we feel we can increase volumes there.

We have our next question from the line of Mr. Ramesh from Nirmal Bang. Please go ahead.

Before I express my vote of thanks and pass it to the management for closing comments, I just wanted your thoughts on 2 aspects. One is, in the industrial segment, how have the margins moved compared to the blended margins in 3Q? Because, you would have got some benefit from the higher alternative fuel prices. And do you see the margins being sustained at these levels? Since you are discussing some price adjustments, is there any risk of the margins in industrial declining? And what is the kind of volume growth that is required to make that up?

If you look beyond FY25, say '26 and '27, based on all the additional infrastructure you are setting up, the additional availability of biogas, the initiativ es in CBG and LN G, and the full- scale operation of all the new CNG stations both in Delhi and outside Delhi, can we talk about the volume growth going up from the current 4% to 6% or 7%. Is it possible after '25?

In fact, we are targeting 1 million additions ever y year, and we have huge plans for that because we have very vast GAs where we are putting a lot of money in infrastructure. And our experience is that once the infrastructure is there, then the conversions take place and the people convert to CNG due to the price advantage. Also, we have seen that all the arterial roads which are going out of Delhi to the neighboring states, most of the roads are covered by our GAs. As soon as we put our own stations there, the sales increases multifold; like in Hapur where we selling around 10,000 kg to 14,000 kg per day through OMC outlets, after putting our stations, the sales is around 54,000 kg per day within 2 months. And we have planned a huge infrastructure investment. We are already laying pipelines up to the boundary of our GAs so that the people who are going outside our GAs, they can fill their tank from our station because our prices are the most competitive prices.

Let me thank the management for being kind enough to do this earnings call. And I also thank all the participants for joining the call and asking some very interesting questions. Let me hand over the call to the management for closing comments. And then we can close the call. Over to you.

I once again thank all the particip ants for participating in this earnings call. And especially I also thank Mr. Nirmal Bang and Ramesh and I hope to see you in the next Earnings Call.

On behalf of Nirmal Bang Equities, that concludes this conference. Thank you for joining us. And you may now disconnect your lines.