Ladies and gentlemen, good day and welcome to Mahanagar Gas Q2 FY 2025 earnings conference call, hosted by ICICI Securities. As a reminder, all participant lines will be in the listen-only mode, and there will be an opportunity for you to ask questions after the presentation concludes. Should you need assistance during the conference call, please signal an operator by pressing star then zero on your touchtone telephone. Please note that this conference is being recorded. I now hand the conference over to Mr. Probal Sen from ICICI Securities Limited. Thank you, and over to you, sir. Thank you, Palak. Welcome everyone to the post Q2 FY 2025 earnings call of Mahanagar Gas Limited. With us we have members of the senior management, including Mr. Ashu Singhal, Managing Director, Mr. Sanjay Shende, Deputy Managing Director, Mr. Rajesh Patel, the Chief Financial Officer, and Mr. Rajesh Wagle, Senior Vice President of the Marketing Division. Before starting the call, I would like to mention, you know, that some of the statements made in today's discussion may be forward-looking in nature, and we do believe that expectations contained in the statements are reasonable. However, these statements do involve a number of risks and uncertainties that may lead to different results. We urge you to consider the quarterly numbers are not a reflection of long-term trends or indication of future results. With that said, I will now hand over the call to the management for their opening remarks, after which we will have a Q&A session. Over to you, sir. Yeah, very good afternoon. I'm Ashu Shinghal. I'm joined by my colleagues here. A very good afternoon to all the investors and reposing confidence in the Mahanagar Gas Limited, and all the analysts who are on this earnings call of MGL for the second quarter of the financial year 2024-2025. At the outset, I would like to thank you all for attending this call and wish you a very happy Diwali, and auspicious occasion for all of us and a prosperous new year in advance. MGL continues to create CGD infrastructure across its business segments in the license area. During the quarter, 58,845 domestic households were connected, and thus we have established connectivity for nearly 2.58 million households. We have laid 70.59 kilometers of steel and PE pipelines, taking the total length to over 7,124 kilometers. We also added five CNG stations during this quarter, and with this we have 352 stations as on 30th September 2024. We also have added 99 industrial and commercial customers during this quarter, and therefore, as on 30th September 2024, we have 4,920 industrial and commercial customers. In respect of our Raigad GA, up to September, we have connected 83,364 domestic households and 49 CNG stations, which are currently under operation. During the quarter, we have laid 10 kilometers of pipeline in Raigad, thereby taking the total length to 433 kilometers. With respect to UEPL, that is Unison Enviro Private Limited, a wholly owned subsidiary, the company has added seven CNG stations during this quarter, and a total of 64 CNG stations as on thirtieth September. During the quarter, 1,890 domestic households were connected, and the cumulative household connections are 29,229 for UEPL, and we have 59 industrial and commercial customers as on thirtieth September. We also commissioned first LNG station in Aurangabad in month of October under the joint venture company, which is Mahanagar LNG Private Limited. This LNG station was set up within six months from the availability of land, one of the fastest commissioning of LNG stations. Coming to MGL's operations during the quarter, overall average gas sale volume was for the Q2 of the current year, compared to the corresponding Q2 in the previous year, has increased to 4.042 MMSCMD, from 3.575, which is an increase of 13.07%. Q2 volume consists of CNG volume of 2.886, PNG of domestic PNG of 0.528 and 0.628 MMSCMD, was supplied to industrial and commercial segment. Compared to Q1 this year, overall sales volume for Q2 has increased by 4.75%. Current quarter EBITDA is INR 399 crores, compared to previous quarter EBITDA of INR 418 crores. Net PAT is INR 283 crores for this quarter, as compared to 285 crores in the previous quarter. Coming to UEPL, during the quarter, company achieved an overall average sales volume of 0.164, as against 0.168 MMSCMD in the last quarter. The current quarter volume consists of CNG volume of around 0.152 and PNG volume of 0.012. Therefore, MGL, as a consolidated entity, has achieved total sales volume of the quarter of 4.206 MMSCMD. On October seventh, this year, MGL has entered an indicative and non-binding term sheet with International Battery Company, USA, for setting up an EV battery cell manufacturing facility in India under proposed joint venture company, which is called International Battery Company Private Limited. The plant initial capacity is one gigawatt hour, which will be developed in two phases of 500 MWs each. The proposed equity investment by MGL in the range of INR 385 crore in this joint venture, with the equity stake of approximately 40%. The board has also approved the scheme of merger of Unison Enviro Private Limited with MGL. The scheme is subject to necessary statutory and regulatory approval from NCLT and other regulatory authorities under applicable laws. MGL has been awarded four golden star under National Safety Council of India safety rating for our occupational safety, health, and environmental management system at CGS Mahape. With this, I conclude, and would like to open the floor for the question. Thank you very much for your patience. Thank you very much. We will now begin the question and answer session. Anyone who wishes to ask a question may press star and one on their touchtone telephone. If you wish to remove yourself from the question queue, you may press star and two. Participants are requested to use handsets while asking a question. Ladies and gentlemen, we will wait for a moment while the question queue assembles. The first question is from the line of Amit Murarka from Axis Capital. Please go ahead, sir. Yeah, hi, thanks for the opportunity. So my first question is on this, the APM gas allocation reduction. So, I understand that there's a change in classification of the APM gas by ONGC, which has led to this. My thought was that if all the new production is going to come from, I mean, it's going to come from the wells, which will be priced higher, does it mean that the $6.5 gas that comes to you will keep falling now every quarter from even the current wells? So could you just help understand that? I think, the point is well taken, that at one point, APM reduction has happened, but this is not a very regular phenomenon, because, maybe there are certain decisions, and the government has taken a call for the one-time reduction. After this, it will be gradual on year-on-year basis. It is not expected to be sudden, cut on the APM. No, but, the new production that comes in, will be from the newer wells, which do not qualify under the $6.5 gas. So even if you get the domestic gas, it'll all be higher priced at, let's say, $9 or so. Is that understanding correct? Yeah, that is correct. Because the APM allocation, APM production is in two categories. One is the old wells, and the second is new wells, for which ONGC and other producers are putting more money into it. So as per the policy recommendations and as per the guidelines approved by the cabinet, the new wells will qualify for a different price regime, which is around 12% of the Indian oil basket. So whatever new gas will be coming, will be priced higher. But again, CGD is getting priority there also, like in HPHT. The whole gas which is available from new well will be allocated on CGD priority before giving to other companies. So you'll get the volume, but basically it will be at a higher price then? That's right. And- HPHT volumes are also expected as and when they come on or the older contracts are expiring. That gas will come on to the bidding, and there again, CGD will get the first priority. Right. But, like, I'm sure you must be taking this up with the ministry, but if, let's say, the gas price is going to go up consistently, and I mean, the blended gas cost because of the newer wells issue, how do you kind of stay competitive versus the liquid fuels and also kind of push LNG, gas into newer markets? So, as I think MD said, you know, some whatever cut is there of that, almost 50% will be available to CGD on priority basis at 10% of the Indian crude basket. Okay. That could be, as you said, maybe around $9 or so. So it will increase the weighted average cost to a certain extent, definitely, right now. So we will be, you know, attempting how do we optimize our costs by, you know, initially we may have to blend, you know, spot, but we will slowly optimize by signing up the term contract. And we will work upon how do we, you know, devise our long-term gas sourcing strategy so that, you know... And, you know, one more point I would like to bring is, yes, we were always prepared as a company or as a city gas industry also, people are prepared that this is likely to go down, but yes, it has happened a little faster. So all of us are working on strategy in the long term, how do we, you know, have our sourcing contract strategy in place, which will give you an idea, and we are, our dependence reduces day by day on the APM, which was a scenario already known, but yes, the speed has, with this cut slightly, gone up. Just, just to supplement that, you know, since you asked how would we be placed against alternate fuels, currently our CNG prices are the lowest in the country, so by corollary, the headroom which we have is comfortable, more comfortable compared to what other people have. So that also helps over that. Plus, one more point I would like to add on to what, CFO and Rajesh already have mentioned, is that our gas, whatever we are getting, new well gas, is linked to oil link prices, and the alternate fuel for industrial and commercial is primarily linked to oil link prices, plus CNG is competitive to petrol and diesel, which again is oil link prices. So obviously there will be costlier procurement in terms of APM allocations. But still, as far as we are concerned, our one-to-one competition with alternate fuels will be more in tandem. Sir, and just last question: Is there any baseline margin that you look to protect, that not go below this? Not be given a number that this is what we target, but general guidance which we have given is INR 10-12 would be EBITDA per SCM, which we have still maintained. Which we have even seen in our Q2, still we are at around INR 11 per SCM. So that margin, that range, we expect to continue for some more time, and let us see how the prices vary of LNG and APM gas and Indian fuel basket and petrol and diesel. Plus, however, we will keep an eye on the volume growth, which we think, as you might have seen in the results, the volume growth has picked up quite substantially in this particular quarter. Last year, last quarter, quarter on quarter, we had more than 2%. This year, this quarter on quarter, we have more than 4%. The whole last year-on-year growth was 5.5%, whereas in one half-yearly we have seen a growth of 7%. This has come out because we have launched CNG schemes also. Our prices are very competitive as compared to petrol and diesel. It is a mix of all these factors that we will decide on the margins. It is not that we have a set number in our mind. Good. Thanks. That's all from my side. Thank you. Thank you, sir. The next question is from the line of Sabri Hazarika from Emkay Global. Please go ahead, sir. Good afternoon, sir. So, a few questions. Firstly, I think the OpEx per SCM was also higher during this quarter. So any particular reason or it is the normal one rate? The operating expenses marginally higher, you are right, around INR 0.25 per SCM. Okay? There were one or two one-off items during the quarter. In case of employee costs, there was an actuarial valuation hit, you know, that has slightly increased in the quarter, linked to, you know, revision in the gratuity policy of the company, linked to, you know, income tax limit being increased from 20 to 25 lakhs. So that has given some increase. Also, in this quarter, there was an ex-gratia payment, which has been accounted. So these two items are, you know, costing maybe around 7-8 crores in a quarter, which is a one-off item. Apart from that, there were some costs booked on account of repair maintenance. We have taken up some aggressive repair maintenance and improvements in the network for, you know, monitoring the consumption geography-wise, within a GA, DRS-wise also, so that we have a better control. And some small amounts have been spent, at least in this quarter, towards marketing or promoting the CNG vehicles. Okay. So maybe, you know, our expenses on promotion of CNG will continue for some time to come, but these are some of the one-time initiatives to ensure the long-term, you know, volumes by capturing more and more vehicles and making these systems more robust. Okay. Second, secondly, regarding this, volumes, so it has been like 50%, now that your volume growth is very strong, and you have always maintained that, 5-6% is the guidance. So is there a revision to the guidance and also the fact that what exactly is driving so much of growth? And, both, CNG as well as industrial, I think both of them are growing, very rapidly. In CNG, you have said, the marketing schemes and all, but can there be any other factor in industrial, but industrial something? Industrial, in the last couple of quarters, we have managed to add on some large volume customers. In fact, one of our largest volume customer has ramped up to his full volume requirement in September. That happened in some phases. So these customers whom we have reached out and managed to connect in GA2 and GA3 especially, have contributed to this. And this is the outcome of almost a one and a half, two year, you know, initiative, which we had been pursuing by convincing these industries to switch from liquid fuel to gas, by giving them a guaranteed 10% discount to the fuel, whatever fuel they're burning. That factor is paid off, started paying off, and that is giving a double-digit increase in industrial volume. So guidance remains same or is it now further up, from 5%-6%? Sorry. Could you repeat your question, please? No, your guidance will remain same at 5%-6%, or are you, can you increase it? See, I would just mention earlier also, 5.5% was the overall volume growth year on year. This first half, we have clocked 7%, so our guidance was around 7-8% by the year end. Now, first half, we have around 7% growth on the volumes as of 31st March this year, and 30th September this year. So by year end, we expect another 2-3% to grow, so we will be touching around double-digit numbers for the year end. For next year, we'll see how it rolls out, but the momentum is there. As mentioned earlier, we have launched certain CNG modes very recently once again, and we are promoting PNG also very aggressively in domestic and industrial and commercial. In fact, industrial and commercial has grown by more than 10% last year, and this year again, we expect it to be in double digits. So these initiatives and competitive costs have made the fuel more viable for all the segments. Okay. One, a couple of specific questions. What was UEPL revenue and EBITDA for the quarter? In terms of revenue and profit. Yeah, one for H1, it is around INR 173 crore, and EBITDA was in the range of around INR 11 rupees, okay. No, profit, I mean, profit. PAT INR 66 crore for the quarter. Okay. And revenue, you said 1,730 crore, 173 crore from H1, no? About half year. APM allocation for the quarter was how much percentage? Uh, UPL? No, over for LNG, PNG. 71% was the overall CNG, and PNG, we were getting 105%, as per the government policy. So CNG has come down in this last reallocation to around 57-58%. You mentioned 69% in Q1, so that has become 71% in Q2, but now it has gone up, gone down to 57%-58%. Is that right? The overall APM, that is domestic plus CNG, both put together is around 71%. Okay? Right. Right. And so now, yeah. Now- On an overall basis, around 16-17%, but if you consider only on PNG, after allocating full requirement for domestic towards, I mean, out of APM, then on only CNG, if you consider, it is 20% down. 20% from the earlier allocation? Uh, yeah. So overall, 13%-14% down from earlier, in absolute numbers. Got it, yeah. Thank you so much. I'll be in touch. Thank you. Thank you, sir. The next question is from the line of Nitin Tiwari from Phillip Capital. Please go ahead, sir. Hi, sir. Good evening. Thanks for the opportunity. So my questions are partially answered, but just staying on that topic of deallocation of APM gas and how the strategy would evolve post that deallocation. Because as you also pointed out, this deallocation has just accelerated the change which was already happening, right? So essentially, it all boils down to how we are going to price the products and CNG, particularly, in order to maintain our growth and margin. So, again, I mean, like, you know, we want to question you on, do we maintain, are we going to maintain our guidance of 5-6% growth that we were looking at earlier, and along with a margin of INR 10-12? Because, I mean, the way we look at it, given that this deallocation, in a broad sense is that a five to six rupee reduction in CNG price might be required for you to maintain the margin. And when that happens, I mean, the gap certainly closes with petrol price and a lot more with the diesel price. So would that not impact conversion of vehicles and growth of volumes? And I mean, this is certainly a near-term problem. A corollary to that is that essentially this change was anyway happening. So what's your strategy like, you know, four or five years down the line when your APM allocation would be really low and you would largely be dependent on imported gas or expensive gas? So how do you see the scenario panning out then? So if you could throw some light on that, sir. Your question is primarily divided into two parts. The first part is, which we have already discussed, that the volumes in this year has already touched 7% growth from March 31, 2024. So in six months, 7% growth is seen, which we were thinking about whole year, 8% guidance was there. So in remaining six months, we can see another growth of 3-4%, so we will be touching around more than 10% of growth for this particular year. Now, coming to the long-term perspective, yes, you are right. APM will be definitely not available to the extent which it is available right now. And we have sufficient headroom available, and we have our operational efficiencies coming in place. We have our assets, which are slightly depreciated. We have volumes in our place. We are doing procurement efficiencies. We are going to different sources. We keep on examining what are the alternate available, like, Brent Linked, Henry Hub Linked, HPHT, new well g as. APM gas, which is not connected to the grid, can get connected and that can get allocated to CGD. So overall, CGD, we have been selling CNG and PNG at the cheapest in the country. And we have some margins are also in the reasonable range of INR 8-12 or INR 13. So having said that, we don't think that we will not be able to manage these cuts in APM in future. And as and when things roll out, it also depends how crude moves, how gas moves, what is the delta between the two, and how the petrol and diesel supplies and how CNG. Because once a CNG vehicle is in, it is there to stay for fifteen years. We don't expect that CNG vehicle will be sold out or whatever happens, because, see, petrol, again, there are projections about oil getting costlier and gas getting cheaper, because gas, several terminals are coming across the globe, mostly in, Qatar is adding capacity, Australia has already added capacity, US has already come on board. So we have a scenario where gas costs will be competitive as compared to oil prices. And so we feel that we will be able to manage, but it's very difficult, four years down the line, what will be the margin? So we can't predict anything on that, but nevertheless, we are prepared to have position in different scenarios which unfold over a period of time. Okay, so that's very helpful what you pointed out on. We were just looking at it from the perspective that, like, you know, once the gap really closes with petrol and when your breakeven time period basically improves substantially and starts, like, you know, inching closer to maybe a productive life of the vehicle. So I mean, correct me if I'm wrong, a CNG vehicle is about 1.25 lakh rupees costlier than a petrol vehicle, right? And essentially, the breakeven right now would be at about four or five years, roughly. So given the gap between CNG and petrol prices, I mean, once this gap closes and your breakeven reaches eight, nine years or more than that, then certainly, I mean, it doesn't make any sense to own a CNG vehicle. So, like, you know, again, a second part to that question: Would you also then start looking incrementally more at LNG as a sales product, rather than, like, you know, focusing purely on CNG? And what is happening on the tax front? I mean, we did hear some rumors on sound bites during July about excise cut or possibly, like, you know, inclusion of natural gas in GST. So any incremental development on that front, if you can throw some light on that aspect as well. CNG volumes, let me respond first on why we see that will sustain in the coming years also. There are three primary sources from where the CNG volumes are coming. One, private car OEMs. A lot of OEs now are pushing and encouraging, and the percentage of CNG cars sold out of the total cars sold in the country is continuously increasing. Today, for a new car buyer, CNG is offering almost a 50% fuel cost compared to petrol, less price. Tomorrow, even if that goes down to 40% or 30%, that still remains a substantial incentive for the customer to use CNG. This is about the private car segment. Second segment volume is from three-wheeler autos. The savings are very attractive. The last segment where we are getting traction, especially from the last few months, is the commercial goods vehicles and especially the intermediate and heavy commercial goods vehicle segment. Even though the competition there is diesel, we are targeting those segments by giving very attractive discounts, fuel cards, et cetera. So the expectation is in favor of the transport or the buyer. We still believe that there is enough of a long growth runway to maintain this 6% to 7%, or, you know, whatever, even in the ahead of a few pricing challenges, which are, again, these are commodities. There will be times when they'll move one way, there will be times when they move the other way. But the volume will sustain there, we have too much of a problem. And coming to your two questions, which you mentioned right now, that the one that CNG vehicle cost versus petrol vehicle, there is- I think there is a lot of noise coming from background. Yeah. So there are different costs involved in different segments. If we talk about passenger vehicles, the delta could be in the range of INR 50,000-INR 60,000 from petrol versus CNG. If you go to commercial vehicles or heavy segment of around 18-ton-20-ton trucks, and the delta could be in the range of INR 300,000-INR 400,000. So, in bikes, it is different. In three-wheelers, it is different. So the payback also depends on the running of the vehicle. If it is a commercial vehicle, the payback could be less than a year. If it is a passenger vehicle, the payback could be as long as three years. But definitely, it is not in the range of eight years. And over a period of time, if you see the history back in ten years also, the CNG and petrol data has been maintained quite substantially over a period of time, despite fluctuations in both petrol versus CNG prices or oil versus LNG prices. So going forward, also, we think a substantial data should be available at least in petrol vehicles. In case of diesel vehicles, the technology is improving, the infrastructure is improving. And we are funding, as Rajesh correctly mentioned, that part of the upfront CapEx we are funding for diesel commercial vehicles. And also we are promoting retrofit of the diesel on diesel commercial vehicles from diesel to CNG, because in Mumbai, after eight years, you can't run a commercial vehicle on diesel in the municipal limits. So they necessarily either have to sell those vehicles or take it as a either we have to sell those vehicles outside Maharashtra, or they have an option to retrofit it. And in case of retrofit, we are funding 50% of that cost. That's a very good incentive for the owner of the truck, because here, trucks are sometimes owned by a single person, and it's not a very big fleet, so they are very sensitive to the price. And it's we say delta of around 15%-20% also over diesel, they will be more than happy to continue with CNG. The other part related to the excise cut and GST, this has been under discussion for quite some time. GST again is a constitutional subject, and the excise cut was talked about during the budget also. So let us wait. If that happens, it will be very good for the industry. Sure, sir. Thank you so much for answering my questions, and best wishes for Diwali, and Happy Diwali to all of you. Yes. Thank you, sir. Ladies and gentlemen, in order to ensure that the management is able to address questions from all participants in the conference, please limit your question to two per participant. The next question is from the line of Yogesh Patil from Dolat Capital. Please go ahead, sir. Thanks for taking my question. Sir, as you mentioned, the EBITDA margin guidance of INR 10-INR 12, and we are still waiting for the CNG price hike, which is due. So this guidance is considering the CNG price hike or without CNG price hike? That's one. See, EBITDA margins, right now we have INR 11 for the half year basis. Now, we have still six months to go. What we are doing is we are evaluating our all the options of getting the gas at the cheapest price. Also, we are taking operational efficiencies, the volume efficiencies are with us. So we will see, but 10-12 guideline is still we can maintain. We hope that we will be able to maintain it, but even if it is certain, it has to be taken to maintain the volumes and to maintain the price stability for giving confidence to the customer, we will always be for it. But as of now, we think 10-12 is the margins after considering the allocation cut. Sir, quickly reframe my question. Suppose we do not pass on the gas cost to the consumer, what kind of a hit will come to our gross margins levels overall basis because of this reduction in PNG allocation? Any ballpark number, if you have. See, the point is industrial and commercial, any which way are going for LNG contracts, which we do have. The PNG is getting 100% allocation. The main effect on the deallocation is on CNG segment. As we said earlier, we are trying to figure out that how the cost gap can be procured at different sources. We are also going for procurement tenders. The way discovered will determine about how we can, how much we can retain with ourselves and how much we have to pass on, and what is the volume growth we want to see, what is the EBITDA margins, which is in the comfortable range. It is not a very strict range that 10-12 is some sacrosanct number. It is just a guidance. It can go up or it can go down also, depending on the cost of procurement of gas, because we will be floating the tenders. There will be gas which will be coming on HPHT, with gas which is on new well gas, which further will be enhanced on the exchange. Then there is IGX, then there is link contracts, there are Henry Hub linked contracts, then the spot is available. So all these things are very dynamic in nature. So as I said that we are still comfortable with INR 10-12, but it can vary slightly up or down as few months go by and we get more clarity on what the procurement cost is. So sir, during the quarter, how many CNG vehicles are added? And if possible, please provide a breakup of vehicle additions in terms of a taxi, three-wheeler, and personal car. And if you have any updates on the two-wheeler additions, that would be helpful. In the quarter, we have added 23,000 vehicles, around 15,000 are private cars, six thousand are three-wheelers, and rest are other all put together, small commercial vehicle and few MSRTC buses are there, taxis are there. Two-wheelers, around twelve hundred two-wheelers have been added this quarter, which Bajaj has launched. So if you see the whole year, last year, we have added seventy-seven thousand vehicles, and now this half year itself, we have touched around forty-four thousand vehicles. So we have seen attraction, but more than the absolute numbers, what is more critical is the commercial vehicles which are getting added, because each commercial vehicle can take much more CNG volume as compared to, say, three-wheeler additions. So, I mean, we are very hopeful, and the two-wheelers are again a new segment which has opened up for CNG, and two-wheeler running cost is almost 40% of a petrol two-wheeler. So this we find is a segment which is going to attract some volumes going forward, maybe two, three years down the line. Anything, Rajesh, you want to add? No, no, just volume addition we have been seeing has been maintaining momentum, and with the relaunch of our commercial incentives for commercial goods vehicles in this month, October, we are hopeful of seeing the momentum, you know, continue. Sir, lastly, CapEx during the quarter and planned CapEx for FY 2025, 2026? Half-year CapEx has been a little more than INR 400 crore, and we maintain our CapEx in the range of INR 800-900 crore, depending on, you know, availability of pipeline laying permissions, availability of plots for setting up CNG stations, et cetera. So we are confident that we will do around INR 800 crore. If things move positive, we'll be more than that also. As far as budget is concerned, we are geared up to do around INR 1,000 crore. Thanks a lot, sir, and wish you a happy Diwali. Thank you. Same to you. Thank you, sir. Ladies and gentlemen, in order to ensure that the management is able to address questions from all participants in the conference, please limit your question to two per participant. The next question is from the line of Nirmal Bari from Aditya Birla AMC. Please go ahead, sir. Hi. Thanks for the opportunity. My question is about the APM gas reallocation. Just wanted to know why there was a sudden reallocation done, because considering the fact that the allocation towards CGD was anyway still declining, but the sudden decline of 20%, just wanted to know why this was done, what was the rationale? And if anyone can throw some light on where this APM gas has been diverted. I think we are not the right agency to answer this question in particular, because the government, at a macro level, looks at all these aspects about where to allocate the gas, at what price. So pricing and allocation is a prerogative of the ministry, so we don't want to comment much on it, and we don't have clearly what the information about where it has been allocated and why it has been allocated to any segment. Okay, sir. Thanks a lot. Thank you. Thank you, sir. The next question is from the line of Hemang Khanna from Nomura. Please go ahead, sir. Hi, sir. Thank you for taking my question. Sir, again, just going back to the APM allocation, wanted to get a sense on the raw material side, following the cut and, you know, with the sourcing efficiencies you're currently employing, what is your current increase in raw material prices or gas sourcing currently? And, a follow-up to that is that, you know, do you, what is the view that, you know, do you believe that you'll be allowed to fully pass on the impact of the higher input cost to consumers? We appreciate that, you know, you're the lowest cost CNG provider in the country right now, but even in that landscape, will you be allowed to fully pass on this impact to consumers? There are two parts of it. One, that you mentioned about what is the cost impact or procurement cost impact. So that we are still working on. As I mentioned earlier also, we are. We will be going to quote some inquiries, get the rates from the market about Brent, HPHT gas, deep sea gas, spot LNG. So that portfolio will be determined depending on the bids we receive maybe next month or so, and then we will take a call on what will be the procurement cost. Coming to your question on the ability to pass on, I think, that question is very well understood by the market, that it's a independent decision of the board of the company or the delegated powers of the board of the company to decide on pricing, depending on the alternate fuel price, cost of procurement, operational costs, our volumes, and the margins which we want to have, and overall, strategies of the company. So I don't think we are under any compulsion to pass on or not to pass on. It is a pure business decision taken by each individual company. Also, depends on what the other CGD entities are doing, what is the price in the adjacent geographical areas, what are the volumes. All those things are taken into consideration before taking a call on price hike or price reduction. Got it, sir. Got it. Thanks. And just as a second question, what do you... what are the current volumes which are currently in the network? It's around 4.05 MMSCMD for the whole quarter, Q2, and on year-on-year basis, it is 3.95 for the whole half year basis, as compared to 3.6 for the financial year, full financial year 2023-2024, and 3.5 for H1 of the last financial year, so we have seen a growth of around 13% on Q2 of last financial year versus Q2 of this, so you see the amount of effort we are putting to make the volume grow, and that is one of the main reasons that we decide on when to price or pass on the price or not to pass on the price, because the customer has to be given a very comfort that their interests are protected. A person who takes a decision to purchase a CNG vehicle or a diesel vehicle or a petrol vehicle is very critical for the company, because then he is hooked up for 15 years with the fuel. So therefore, those decisions are taken by, as a business decision by the company. Like, well, we have launched this CNG Mahotsav scheme, which almost subsidize or pass on the 50% cost to the is taken by the company to make sure that the more volumes are attracted. Got it, sir. No, definitely. Your volume trajectory in the past few quarters has been exceptional, and that's clearly visible. Just as a last bookkeeping question, could you just help with the EBITDA for UEPL as a start? EBITDA for UEPL. EBITDA for UEPL, yeah, let me just take it, give me a formula. Got it. Got it, yeah. And seven, five. Around ten rupees per EBITDA. Got it, sir. Thank you so much, and wishing everyone a very happy Diwali. Thank you. Thank you. Thank you. Thank you, sir. The next question is from the line of Karthik from CLSA. Please go ahead, sir. Hello, sir. Thank you for taking the question. I had one question on, what do you think is the current discount versus diesel in percentage terms? And based on your experience, what is the level of discount that you think customers are fine, so that, you know, your volumes are not impacted? Currently, the discount level is at about 16% or 17% to diesel, and empirically in the past, we have seen that, you know, as long as the discount levels are in 15%-25% kind of a range, the traction continues, and we get a continuous stream of new vehicles, new CNG vehicles and conversions, so while we are at a lower discount level, but there is still, it's still in a doable range. And again, the discount to diesel is relevant in commercial vehicles, where the competition is with diesel. For the private car and for the auto rickshaw, two-wheeler, et cetera, the competition is petrol, where there is a very large incentive anyway for the customers. To offset this relatively low discount and to promote heavy commercial vehicles, we have restarted this incentive scheme. But if you look at the sale number of our small or light commercial vehicles, that remains at 1000 plus, and that has not got impacted by, you know, lowering of a discount from, I think one or two quarters back. It would have been about 19%, now it is down to 16%. But we haven't seen any decrease in adoption because of that. And the petrol discount to petrol is around 45%-50% range, maybe 47%-48%. So there is substantial delta for attracting petrol vehicles. Now, just keep in mind, there are several other things which are happening when a person decides to take CNG or petrol or any other vehicle. That is a lot of infrastructure is getting added up. Typically, we have been adding around 25 stations every year. This year, combined with UEPL, we expect to add 85-90 stations this year still. So OE models are available, and there is a lot of choice. Even original equipment manufacturing, like Tatas and others, Marutis, are very aggressive about promoting CNG vehicles. They are redesigning their vehicles. More and more CNG stations are added up by other CGD companies also. So the whole highway is getting created. What I want to say is that the whole ecosystem over the last three decades for CNG vehicles have been created. So we want to take, make, sure that this ecosystem is maintained properly for next few years, at least, make sure that the volume growth is maintained and proper delta can be arranged or tweaked to, to make sure that the volume growth happens. Got it, sir. And just to follow up, do you think customers care more about the running cost or the overall cost, like the upfront cost that they have to bear in this case? The CNG versus petrol. As we just discussed sometime back, there are two type of users. One, that private car owners, if they purchase a vehicle, they see two things: One, that convenience to fill CNG, and second, how much they run, what is the operational efficiency. Typically, private cars don't run too much, so their payback is high. For commercial vehicles, if the CNG is available, they have to be competitive in the market. That type of pressure is not there in private vehicles. So for remaining competitive, they will always go for a cheaper running fuel. They typically take, account the total cost of ownership, and running kilometers is very important for a commercial vehicle. And therefore, the delta also is not very significant, because if you see the life of the vehicle for fifteen years, twenty years, then this original, the upfront CapEx can be quickly paid back in one and a half year or less than a year for a commercial vehicle. So the decision point is, what is the delta between diesel and CNG or petrol and CNG for a commercial vehicle? Thank you, sir. Thank you so much. Thank you, sir. The next question is from the line of Saurabh Handa from Citigroup. Please go ahead, sir. Yeah, thank you for the opportunity. So my first question is, just on this, APM allocation cut now, the perception is that y ou know, the CGD sector has been singled out in bearing the brunt of this whole reallocation, to say, ONGC petrochemical plant. Now, in your discussions with the government and the ministry, do you get a sense that there is indeed a shift in their stance towards the priority for the sector, or this is just something which needed to happen, and it's a sort of one-off? And if it was a one-off, then why not do a pro rata cut across sectors by just the CGD sector? I think, again, this was some time back. There are, I mean, this is a government prerogative at a macro level, that what type of allocation and what pricing they give. If you see, it is not one single point which you can single out and take as a general, I mean, general consensus about it. You have to look at last fifteen years or so. The CGD sector has been promoted over a period of time. The first priority has also been given to CGD. That P&NG gas allocation was given to CGD. The APM prices were readjusted once we found that LNG prices have gone over the roof in terms of war and corona times. So it's not that one decision can be taken as a general guidance for whether the priorities have shifted or not. Anyways, we are not the party to decide those things, and we don't think that those are the things which we can take as a general guiding for the future also. Because the first priority to CGD is still there as far as norm, as per the government guidance is concerned. Okay, sir, fair enough. Sir, my second question is on the recent exclusivity, you know, whatever end of exclusivity notices that have been sent by the PNGRB. Now, in that, I think all three GAs of MGL's are covered. So what... Could you talk us through there are any implications of this, or could this again be subject to, you know, legal challenges and so on? I think, if you have seen the notice, public notices, PNGRB has, which taken out maybe yesterday, there are 73 geographical areas which have been called for the consultation. And if you have gone through that notice, it says that the matter is sub judice, and the court has asked, I mean, they have given the freedom to PNGRB to go for consultation. But if any action is to be taken, that needs to be checked through the court, if it, in case it is having any adverse impact on the CGD. So it is the prerogative of the regulator to move ahead with the procedure. Any which way, the regulation allows for going for exclusivity. So as has been discussed earlier, also exclusivity is a, is a beneficial thing for all the sector also. We are not against it. Only as a matter of fact, the matter is sub judice, because if exclusivity is ending, there is a opportunity for us to go to other geographical areas to work upon. So we have a market to work with. And since our GAs will be covered, so we will be getting paid for the infrastructure cost, plus certain returns on it. So it's not a thing which we are very much afraid of, as such. But anyways, say the matter is sub judice, so we don't want to comment on that. What PNGRB is doing is very well within their rights, and they are doing it for the growth of the sector. We are very much for it. All right, sir. Thank you, sir. Thank you, sir. The next question is from the line of Madhur Rathi from Counter Cyclical Investments. Please go ahead, sir. Sir, thank you for the opportunity. We just wanted to understand your perspective on the previous question. So do we see the Indian CGD ecosystem or the gas pipeline ecosystem going towards a common carrier over the next few years, whereby we would receive some kind of rental or for our infrastructure utilization by different players? So on that front, some view. I think, if we are talking about main gas grid, it is already on common carrier basis. When we talk about CGD, there are two types of exclusivity under the act. One is infrastructure exclusivity, which is for a period of twenty-five years, and there is a provision in the act to go for ten years extension after the expiry of twenty-five years. So, across the globe also we have seen that the infrastructure exclusivity is maintained in terms of one geographical areas, there cannot be two parties who build the physical infrastructure. Now, coming to marketing exclusivity, as discussed earlier, also the matter is sub judice. There is a provision in the act, in the regulation, not in the act, that five to eight years time is given for ending of marketing exclusivity, since the matter is under sub judice, so we don't know when it will end. If you say two years, three years, we can't say it is two years, three years or five years. It's very difficult to give any numbers when it's the court case will be decided, and in which manner or fashion it will be decided. So let us wait for that and see how it plays out. Okay, sir. Sir, my next question was, sir, how is APM gas allocation decided between different CGD? Is it based on the number of GA that a particular CGD has or has the marketing rights to? Or how is it decided in the CGD ecosystem? ... It is not on number of GAs, it is based on, one, that it is done on unbiased manner. Second, it is done on the availability and the demand, and third, it is in the last four months they are consuming 100 units in the last month. Next month, all the demand is aggregated, all the availability is aggregated, and then it is divided. The percentage that is applied to all the CGD entities, irrespective of, and or number of GAs. So, so basically, like how much volume you can, offtake, how much volume your, stations can offtake will, determine how much, APM gas you can bid for. Is that understanding right? No, no, it is actual average consumption of the last month. Okay. Last quarter. Okay. Last quarter, not... Sorry, I'm correcting. It is not month, it is the last quarter. Average consumption is taken as the base figure. That is the demand aggregation of all CGD entities, and the availability projections are then taken, and demand divided by availability or the other way around, it is taken. Yeah. Okay. Thank you. All the best. Thank you, sir. The next question is from the line of Kirtan Mehta from BOB Capital Markets. Please go ahead, sir. Thank you, sir, for the opportunity. One question to understand about the sort of our vehicle pool, would you be able to sort of divide it into two pools, where the vehicles use typically thirty, forty kilometer of run every day, and the one which have the significantly higher run of hundred kilometer plus? Is it possible to give some approximate number? I think. Can you repeat the question? Are you saying thirty, forty kilometers or eighty kilometers? There are different. I mean, passenger vehicles run maybe forty to fifty kilometers in a day, whereas commercial vehicles will run around two hundred kilometers a day, or maybe more than that. I mean, it depends on the class of vehicles. If you take, let's say, Uber or Ola, it may run hundred and fifty kilometers a day also. A typical MSRTC bus would run about 400 km in a day. Commercial vehicle? Commercial goods vehicle. Again, it will depend on the class of vehicle. If it's a small, light commercial vehicle doing, you know, some Rewari warehouses to city, two, three trips a day, it may be about 80-100 km a day. And heavy commercial vehicles run maybe 300 km a day. Yeah. The highway, the vehicles which run on the highway typically run hundreds of km a day. Private individual vehicles, typically, the per capita is a bit lower, because they mainly use it for, you know, commuting, et cetera. And even three-wheelers run 100 km a day. Yes, three-wheelers also run about 80-100 km a day. Is that the question was or something else? The way I wanted to understand is how much percentage of our CNG consumption will be coming from the higher usage vehicles, which would be less impacted by or which would be subjected to sort of the price change in the CNG? Would it be something like a 40%-50% of the CNG consumption exposed to that, right? Very sensitive to price change? No, no. Once the vehicle is on CNG, the vehicle has to run, it will buy CNG. It doesn't have any other choice. So typically, if the discount decreases or CNG price increases, et cetera, what tends to happen is incremental addition of new vehicles, growth rate starts dipping a bit. Just to add to what Rajesh said is that diesel vehicles, there is no choice. In petrol vehicles, there is a choice that they can run on petrol or CNG. Like small passenger vehicles, they can run on either petrol or CNG. But for a diesel vehicle, for a heavy truck, if it is converted to CNG or if it is a OE truck, then it can run only on CNG. They don't have choice to switch back to diesel or petrol. Small commercial vehicles also. Yeah, I do understand that, but basically if at all the savings endured by the existing vehicle goes down, typically the addition also goes down because of the sentiment. So how much percentage of the pool would be basically in that category? It's a very small number. The commercial vehicles and, heavy commercial vehicles and buses, they are, as far as overall numbers are concerned, they're very small in number. But, the vehicle per capita consumption is high in commercial vehicles. They would not be contributing more than about 12-15% of our overall CNG sales. A chunk of the CNG sales comes from private cars, taxis, and auto rickshaws. Right. The transport undertaking put together will be about 7 or 8% of the overall CNG sales. Another question was about basically, we understand that short-term allocation of the new well gas has been given up to the 31st March 2025. So what is the allocation that we have got for the short term till 31st March? Is it 50% of the APM requirement that we lost? Not exactly. We will come back to you on this number, but new well gas, we have also bid, and there are more gas is expected to come online, so we are waiting for that also. But we did not get the full quota of new wells that we quoted for. Sure. And the last question was about the industrial and commercial. We are seeing a very good growth in this segment, so against sort of the volume that we have agreed, how much percentage is already sort of realized, and what is the balance that can come over the next year or two? We are expecting low double digit growth to continue for at least another year or year and a half. In the industrial segment. Industrial and commercial put together, we got 12% high growth last year and maybe 10%-12% this year. So the sourcing of this volume is already done by us in terms of term contracts of LNG. We have signed contracts with new industries for a pretty good volume, which we will be connecting in the coming construction season, or the ongoing construction season and next year. So that will contribute to additional volume. Sure, sir. Thanks for this clarification, and wish you all happy Diwali! Thank you, sir. The next question is from the line of Ramesh from Nirmal Bang Equities. Please go ahead, sir. Thank you very much, and wish you all a very happy Diwali. So, if you were to, you know, look at your plan to acquire that 40% stake in International Battery, can you take us through, you know, what is in it for you in terms of your long-term business plan in that business? What are the kind of size, and the profitability of this company, and can you, you know, tie in with some numbers, whichever you can share, in terms of how it would, you know, help you generate the return on that investment? I think this is an opportunity which has come out from the strategy of the company to diversify into, say, non-fossil fuel segment also. We want to have at least say 20%-35% revenue bottom line on non-fossil diversified new areas. So as a matter of fact, we explored several opportunities, and one such opportunity was this, that we are going to set up a new battery manufacturing company, which is a cell manufacturing company. And this will be, I mean, one of the first in India, because as per our understanding goes, all cells are getting imported in India through China, Korea, and other places across the globe. What Indian companies are doing is importing the cells and packaging them to make the battery pack. This will be one of the first company or maybe one of the few companies to start cell manufacturing in India. The size will be, to start with, we will have one GWh factory, and it can be scaled up to five GWh factory in at least two, three years' time. We will see the performance of first GWh. It's a Korean partner, a company, US-based company, which is, which we have joint ventured with, and they have set up a plant, pilot plant in Korea. The product is out, and it is being tested in Indian road conditions also. The CapEx size in the first phase will be around INR 860 crore, and for phase two, it will be around INR 3,500 crore. The revenue, once we have five gigawatts, will be in the range of around INR 4,000 crore at the top line and maybe INR 700-800 crore at the bottom line. So it's a good segment, also depends on what is the duty structure which the government gives, because government is promoting a lot of, like, Make in India, campaigns, and also since almost 80% batteries are getting imported from China. So we feel that there is a likelihood to put duty on, Chinese imports, especially in battery segment. That will further increase the profitability of the venture. It depends on the product, the type of quality which we produce, the type of chemistry, the acceptability, the rate of production, and so on and so forth. So it's a newer area for us, a new venture for us, and we are very optimistic and excited about this whole opportunity. And if it makes sense, then it can be a good, game changer for the company. So in terms of the timeline, when do you expect to finalize the shareholder agreement and get started on this project? And what is the execution timeline? It's a non-binding agreement which we have signed, and, we expect to close this signing of SHA in few months' time from now. Okay. So and on the LNG, retailing business, what is the kind of roadmap you have for, say, two, three years? You already talked about adding some stations, and, you know that you are doing, certain amount of volume in your Savroli station. So, when do you see some kind of critical mass in the LNG, retail outlet in terms of number of stations and LNG volumes? And how much do you think it can add to your top line and bottom line, say, in two to three years? It's a very nascent stage. Right now, in India, around seventeen, eighteen retail outlets are working off LNG. One is Savroli, which we have already commissioned from MGL. And, very recently, a few days back, we commissioned another station from Mahanagar LNG, which is a joint venture company of MGL at Aurangabad. Now, next two years, there will be several stations which are coming on board from MLPL and some other parties like GAIL, IOC, ONGC, Petronet, and so on and so forth. So once we think that LNG infrastructure is... I mean, the puzzles are solved in terms of regulations, in terms of safety standards, in terms of technology, in terms of OEs coming up, in terms of retail outlets coming up, in terms of giving some discount to diesel. Also, if we have to see the environmental impact, if we have to replace diesel, there are very few alternatives available, and one such good alternative is LNG. Because LNG, one fill can take you to thousand kilometers run. And if we talk about electric vehicles on long haul or heavy commercial vehicles, it is not feasible considering the very prohibitive CapEx, the range anxiety, the charging time, and the weight of the battery, and the replacement of the battery in a period of time. Again, hydrogen is 10, 15 years down the line. Then we have to have green electricity to produce 60 units to produce 1 kg of hydrogen. Again, burn it, or use it as fuel cell to run the hydrogen, create a whole ecosystem, codes, technology, adaptability, infrastructure. So we think if we have to go for net zero compliances, and almost 3% of commercial vehicle is emitting 35% of carbon, CO2 emissions in the transport sector by heavy commercial vehicles to commercial vehicles. That is the segment which LNG is trying. Maybe in two years down the line, if we see LNG, we will have good numbers because more and more ecosystem is getting ready, more OEs will be coming, more customers will be ready to reduce their carbon footprint. And we as a company find that LNG will be a good segment to work on. Exact numbers will depends on how many number of stations we put up, how much volume we are able to attract, but it will not be very substantial in the overall scheme of things in terms of revenue and profitability for at least two, three years. But down the line, five, six years, it can be a substantial number. Okay. If I can squeeze in one more last question. So when you talked about the growth outlook in the second half, and you said additional 3%, are you talking about a 10% volume growth in the second half? How should we read that? No, no, no. No, no. I think, let me make it clear. 7% growth we have achieved from 31st March 2024 till 31st September. So if we talk year-on-year from 31st April 2024 till 31st April 2025, it will be 10%. So 7% plus 3%. So for the full year, it is 10%. That's what you are saying? That's, that's right. Okay. Thank you very much, and wish you the best of season and happy Diwali. Thank you very much. Thank you very much. Thank you. Thank you. Thank you, sir. As there are no further questions, I would now like to hand the conference over to Mr. Probal Sen from ICICI Securities Limited for closing comments. Thank you, Palak. Thank you very much for all the attendees as well as the management for taking their precious time out and taking an extended time beyond the set time to answer all the questions. With that, wishing everybody and their loved ones a very happy Diwali. From the management side, sir, any closing remarks you would want to make? Otherwise, we'll cut the call. Thank you so much, Probal, and all the investors who have joined and taken time out to have this conference. Wishing you again and your family a very happy Diwali and a new year, prosperous new year. Thank you so much. Thank you, everyone. You may exit the call now. Bye. On behalf of ICICI Securities, that concludes this conference. Thank you for joining us, and you may now disconnect your lines.