Mahanagar Gas To Clock 13% Volume Growth In FY25, Says Managing Director Singhal

State-owned Mahanagar Gas Ltd. is on track to achieve a 13% volume growth for FY25, its Managing Director, Ashu Singhal, told NDTV Profit on Thursday. Singhal highlighted that MGL has already recorded an 11% growth in the first nine months of FY25 and is confident of good results in Q4.

“This year in 9 months, we have seen a growth of 11%. So definitely there is a momentum that has started picking up. If we take Q4 also, there can be another 1-2% addition, so year-on-year, last year it was 5.5%, and this year it could be 13%,” he said.

Singhal added that the company aims to achieve at least double-digit annual volume growth over the next three years.

“Next three years, we can see the movement of at least double-digit growth every year. So if that is the case, our numbers will speak for themselves in terms of physical growth, and that’s what our focus is,” he said.

Speaking on EBITDA (Rs/cubic meter) margins, the top executive said MGL has guided Rs 10 to Rs 12 for FY25, but the numbers may see a dip in the following year.

“In the last five to six years, we have been having an Ebitda  (Rs/cubic meter) of Rs 7 to Rs 8. The last financial year was pretty good; we had Rs 13 and slightly higher than that. Then we gave a guidance of Rs 10 to Rs 12; now, perhaps, maybe we pull down one number, Re 1, so Rs 9 to Rs 11 could be the new guidance,” he said.

Shinghal emphasised that MGL has ensured stability in CNG prices and remains one of the cheapest suppliers in India. Under the Administered Price Mechanism (APM), the natural gas allocation to Mahanagar Gas was reduced in October and November 2024. However, it opted not to raise prices immediately.

“Instead, we managed our portfolio, absorbed some costs, and adjusted for the actual procurement cost. When deallocation was restored to 50% in January, we raised prices by Rs 3,” he added.

Highlighting the price advantage of CNG, Shinghal noted, “Currently, CNG is 45% cheaper than petrol and 18% cheaper than diesel, which is driving traction for CNG vehicles.”

The state-owned gas company is planning a new scheme that would offer buyers of diesel vehicles up to 50% of the cost difference between a diesel and a CNG variant as an incentive to promote CNG adoption, Singhal revealed. 

In terms of infrastructure expansion, Mahanagar Gas added 50 stations last year within its core MGL geography and 35 more via its Unison acquisition, bringing the total to 85 new stations.

"So, 85 have been added to a base of 410 stations. There is an addition of more than 20%. Next year also we have similar plans. So that is one part of it; we are laying a lot of infrastructure; pipelines are also being laid," he said.

Shares of Mahanagar Gas closed 3.97% lower at Rs 1,283.50 on the NSE on Thursday. In comparison, the benchmark Nifty50 ended the session 0.03% higher at 22,552.50 points.