Gujarat Gas Ltd (NSE: GUJGASLTD) Q3 2025 Earnings Call dated Feb. 07, 2025
Corporate Participants:
Sandeep Dave — Company Secretary
Dipen Chauhan — Head of Industrial Marketing and Business Development
Rajesh Sivadasan — Chief Financial Officer and Head of Investor Relations
Analysts:
Probal Sen — Analyst
Shantanu — Analyst
Vivekanand Subbaraman — Analyst
Amit Murarka — Analyst
S. Ramesh — Analyst
Varatharajan Sivasankaran — Analyst
Yash Nandwani — Analyst
Shubham Shukla — Analyst
Sabri Hazarika — Analyst
Kirtan Mehta — Analyst
Pratyush Kamal — Analyst
Yogesh Patil — Analyst
Kartik Kohli — Analyst
Somaiah V. — Analyst
Hardik — Analyst
Mayank — Analyst
Presentation:
Operator
Good day. Ladies and gentlemen, good day, and welcome to Gujarat Gas Limited Q3 and FY ’25 Earnings Conference Call. 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 Zero on your touchstone phone. Please note that this conference is being recorded. I now hand the conference over to Mr Sandeep Dave, Company Secretary of Gujat Gas. Thank you, and over to you, Mr Dave.
Sandeep Dave — Company Secretary
Thank you. Very good afternoon to all of you. A very warm welcome to Q3 earnings call of Gujarat Gas Limited. I’m Sandeep Dave, Company Secretary and Head, Corporate Communication of Gujarat Gas Limited. Let’s give you an update since our last earning call on the composite scheme of arrangement. On 30th August 2024, we have announced scheme of arrangement among Group of companies. Just to remind you about the restaurant of the scheme, the proposed scheme will eliminate layer structure of GSPC Group, promote business synergies and unlock value for its stakeholders. The scheme is subject to various and regulatory approvals. We have filed the scheme with BSC and NSC and I’m happy to report that we have received no objection from BSC and NSC and we are targeting to file a scheme with NCA early next week.
Coming back to GDL to give a brief background about GTL. Is the largest City institution company in India. Is operating in 27 geographical areas across six states and one union territory. We have a good mix of matured and maturing CGD areas. We have developed a pipeline network of more than 14,000 kilometers, which provide natural gas to close to 22.27 households, 4,430 customers and 15,590 customers. We also operate 825 CNG stations serving approximately 4 lakh vehicles per day. We are aggressively setting up CNG infrastructure as well as upgrading CNG infrastructure to promote use of clean and green fuel.
We also started in biogas into the geo system. This is consistent with our strategy to focus on increasing volumes. We have achieved an overall volume of 9.73 mmscm nine months end 31st December 2024, which is increase of 5% over corresponding period in previous financial year. DGL aims to deliver affordable, reliable and cleaner energy by operating responsibly and performing with excellence while considering environment, social and governance factors.
As part of our commitment to ESG initiatives, we have taken various measures, which include hydrogen blending pilot project, which we have completed with 8% blending. Now we have initiated actions for increasing blending level to 15%. This will be done post necessary regulatory approvals. We have embarked on major digitization drive across various business operations and processes. Our major contribution to environment is by virtue of promoting use of natural gas for industrial customers.
In Q3, we have reduced bunding of approximately 13,000 metric ton of coal per day. Further, through our CNG sales on various outlets, we have reduced compensation of approximately 3,084 kilometers to kilometers of petrol per day during this Q3. At Gujarat Gear, the other two highest standards of safety and a strong culture of safety. GGL is an IF certified organization for integrated quality occupational health, safety and environment management system. We built, operate and maintain a safe and reliable gas network in our areas of operation.
With this brief background on GGL, I now request my colleague, Mr Chawan to share business updates. Over to you, you,.
Dipen Chauhan — Head of Industrial Marketing and Business Development
Thank you. Thank you. Thank you very much, Sandeep. Good afternoon, everyone. I will update on domestic and commercial segment. We are seeing a positive growth in the domestic segment. Customer-base is now more than 22.08 lakh domestic customers. Despite festive season, GGL has still managed to maintain the growth rate and have been able to add 0.38 lakh customers in the current quarter. Apart from that, we have registered 0.53 lakh customers in current quarter for the connection. The commercial segment is showing a steady growth in connection numbers. We expect the numbers in domestic and commercial segment to increase over a period of time as the new areas mature. We see GGL at present has a customer-base of more than 15,500 commissioned commercial customers. Thank you.
Now let me update on the industrial segment. In the industrial segment, sales volume were 5.45 mmscm for the quarter ended 31st December 2024, whereas the sales coming sales volumes during the same-period in the previous financial year was 5.53 mmscmt and overall decrease of almost 1%. This was despite the fact that many industrial areas in South Gujarat observed shutdown during the Diwali period. The average Morbi volume during the quarter was 3.35 mmscmt and known Morbi volume was 2.10 mmscmt. The Morbi ceramic market has regained volume from 2.86 mmscmd in Q2 FY ’25 to 3.35 mmcm in Q3 FY ’25, owing to resumptions in manufacturing activities post.
The loan volume of 2.10 for quarter ended 31st December 2024 has grown from MMSCMD during the same-period in the previous financial year, an increase of 12%. However, during the quarter, we had to increase the industrial prices by approximately INR2 per SCM. The increase was mainly on account of significant increase in LNG prices. The spot LNG prices have increased by more than 20% since September 2024.
We continue, we continue to monitor the price movement of natural gas and alternate fuels across all our operating areas. The natural gas price during the Q4 are expected to remain high mainly on account of geopolitical factors. The same may result in adverse impact in the competitiveness of natural gas vis-a-vis alternate fuel.
Finally, let me update on CNG segment also. In Q3 FY ’25, CNG sales in Gujarat increased by 11% year-over-year. While outside Gujarat, sales surged by 25% on a year-over-year basis. Overall, CNG sales across regions grew by 12% annuity. CNG continues to maintain a significant price advantage being approximately 46% cheaper than petrol and 15% cheaper than diesel.
During this quarter, we have added five new CNG stations, reinforcing the momentum — momentum of infrastructure net expansion and enhancing. We are also proud to mention that the strong momentum in CNG sales has continued achieving our highest-ever sales of 3.12 in this quarter. This performance highlights a strong investment outlook driven by increasing customer adoption and ongoing strategic infrastructure development further strengthening position in LNG market.
With that. Now I would like to request that our CFO, Mr Rajesh. Over to you, guys.
Rajesh Sivadasan — Chief Financial Officer and Head of Investor Relations
Yeah. Thanks,. Good afternoon, ladies and gentlemen. I’m Rajesh, the Chief Financial Officer and Head of Investor Relationship at Gas Limited. I welcome all of you to the earnings call of Gas Limited for the 3rd-quarter of the financial year ’24-’25. I’d like to thank you all for attending this call today. I trust you have gone through our financial results for the quarter ended 31st of December ’24, along with the investor presentation, which we have reported on our website and exchanges.
During the quarter, the company has invested close to INR213 crores into the infrastructure aggregating to around INR549 crores in the nine months of this financial year. The company is presently having close to 42,000 kilometers of PE and steel network, which is the key growth driver for our business. In terms of revenues, the company registered a revenue from operations of INR4,33 crores during the 3rd-quarter of the financial year against INR4,084 crores in the corresponding quarter of the previous year.
The company has reported a profit-after-tax of INR22 crores during the 3rd-quarter of this financial year as compared to INR220 crores in the corresponding quarter of the previous year. The company’s EBITDA for the 3rd-quarter for the financial year ’24-’25 stood at INR439 crore as compared to INR424 crores in the corresponding quarter of the previous year. In terms of rupee per SEM EBITDA margin stood at INR5.04 in the 3rd-quarter of this current financial year as compared to INR5.03 in the corresponding quarter of the previous financial year.
As the investors are aware, during this quarter, there was a reduction in the APM allocation in two tranches that is in the month of October and November 2024, which has resulted in the quarterly APM shortfall of close to 45 percentage, which was sourced through new well gas HPHC from Reliance and IGX and the remaining through Spot. After the recent corporate announced corporate announcement also, Gujarat Gas continues to have the credit rating of AAA stable for long-term and A1 plus for short-term from Care, India ratings and. Further, as requested by the investors, we have uploaded the half yearly numbers of GSPC and GSPC’s website.
We — we open the floor for now Q&A session.
Questions and Answers:
Operator
Thank you. Thank you. We will now begin the question-and-answer session. Anyone who wishes to ask a question, press star and one on the touchstone 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’ll wait for a moment while the question queue assembles. The first question comes from the line of Probal Sen with ICICI Securities. Please go-ahead.
Probal Sen
Thank you for the opportunity, sir. Good afternoon. Our first question was with respect to the UTM reallocation that you mentioned. Just to clarify that this 45% shortfall in Q3 was essentially for the CNG segment, if I understand. And after the restatement of part of this volume, can you tell us the stage in Q4 so-far that was the first question?
Dipen Chauhan
Prabad, your voice is breaking. Can you repeat the question?
Probal Sen
Just one second, sir.
Dipen Chauhan
Yeah.
Probal Sen
Is this better?
Dipen Chauhan
Yeah, it’s better.
Probal Sen
Hello. Yeah, I was saying, sir, with respect to PP, just wanted to clarify that the 45% shortfall you mentioned, that is for the CNG segment and after the restoration of some of that volumes that has happened in January, what is the revised percentage that we are getting right now if we can get a sense? That was the first question
Dipen Chauhan
Yeah. The — see the 45% is domestic and CNG both put together the shortfall is 45 percentage.
Probal Sen
Okay. Okay. Okay. And in Q4, sir, what is the percentage now after the again restoration of some of those volume?
Dipen Chauhan
It will be — it will be close to the same amount 45 percentage only.
Probal Sen
So there has been no increase in the APM allocation?
Dipen Chauhan
No, no, you need to understand that we are talking about an average for the three months, wherein the allocation was reduced in October and November.
Probal Sen
Okay. Okay.
Dipen Chauhan
So now basically that’s the average is coming to 45. So now there is a marginal increase which has come in for the entire quarter next — this quarter, it will be around 45 itself, maybe at 47 or 48 maybe.
Probal Sen
That is the shortfall or that’s the allocation percentage.
Dipen Chauhan
That is the shortfall, yes.
Probal Sen
That is the shortfall. Understood, sir. And second question was with respect to the Morbi volumes, where you mentioned that there has been a recovery after the festival related shutdown is over. I just wanted to understand, sir, how much impact is this whole freight situation and the shipping constraints still having in the region? And therefore, what kind of outlook can we build-in for Morbi volumes in particular for the next three to four quarters?
Dipen Chauhan
And if you just see the present geopolitical scenario and after the new government in the USA, it looks like the situation will be better or improved for the businesses or for the shipping to be continue in the Middle-East and other areas. So we are hoping that volume and business will improve.
Probal Sen
And sir, is it possible to share any rough range of what the volumes have been in the first couple of months in Q4 and January?
Dipen Chauhan
Or I think you need to understand that the volumes are also driven by the propane prices.
Probal Sen
Right.
Dipen Chauhan
So now the propane price, there is a difference, the delta has increased with respect to propane and gas which is there because spot prices have also gradually moved up with respect to the gas prices. So we are — we are anticipating at three — presently we had — in this quarter, we did close to 3.35 MMS CMD from Morbi.
Probal Sen
Right.
Dipen Chauhan
Would be around now around — it will be around 3 now going-forward because of the price differential which has increased, the out the offtake has reduced now.
Probal Sen
Understood. If I can squeeze in one last question, sir. With respect to the sourcing contracts, can we just get a broad sense of what are the contracts in-place right now? And with respect to volumes as well as term, have there been any new contracts signed in this quarter?
Dipen Chauhan
No, there has not been any new contracts signed in this quarter.
Probal Sen
Okay. So the same contracts with BG, Petronet, some of domestic gas and HPHP. That is what it stands.
Dipen Chauhan
Yeah.
Probal Sen
All right, sir. Thank you so much. I’ll come back if I have more question. Thank you for your time.
Operator
Yeah, Mr Sen, are you done with the question?
Probal Sen
Yes, yes, I’m done. Thank you.
Operator
Thank you. The next question comes from the line of Shantano Sika Sikia with Indian Petrol Plus. Please go-ahead.
Shantanu
I was just wanting to know what exactly are the volumes for Morbi? You said 3.35 in the last quarter and you regained from 2.86 in-quarter two. So the data — can you just repeat the data one more time about Morbi?
Dipen Chauhan
And I think the data you’re saying is right, right. 2.86 was the previous quarter and 3.35 in this quarter.
Shantanu
What is 2.01 and 1.86 MMS CMD that you described.
Dipen Chauhan
Pardon?
Shantanu
You just also say 2.01 MMS CMD and 1.88 MMS CMD for previous financial year.
Dipen Chauhan
Actually, it is 2.10, that is for non-Morbi market.
Shantanu
That’s for the?
Dipen Chauhan
Non-Morbi market, outside
Shantanu
Non-Morbi markets. Okay. All right. Okay. I got it. So now could you tell us what the delta is between propane prices and your prices as of now? What is the propane price? Would you have any idea what is the rough price that you are selling that
Dipen Chauhan
We — I think the present delta is INR4 rupees, around INR4.
Shantanu
INR4 which is in favor of propane. So you know, most of these Morbi are you know players have dual feed system. So if the delta is four, then there should be a full switch-over to propane, which is not happening. So you are selling three MMSCMD only to those players who don’t have a dual fee, right, because the delta is quite high.
Dipen Chauhan
So it’s not like that. Even though there is a difference in price, but still customers prefer the mix of both the fuel, natural gas and propane.
Shantanu
Okay. And that is essentially so that they can keep one foot in one boat and the other foot in the other boat, or is it because it’s economically better?
Dipen Chauhan
Actually most of the plants or most of the ceramic plants are continuous process plant, okay. So they have to rely on natural gas. It’s very difficult for them to move-out completely from the natural gas.
Shantanu
Okay. So therefore, there is never a 100% switchover. There is a certain amount of natural gas that comes into every ceramic plant is what you’re trying to say, right?
Dipen Chauhan
All correct. You are right. All right.
Shantanu
Thank you very much. Bye.
Operator
Thank you. Thank you. Next question comes from the line of Vivek Anand S from Ambit Capital. Please go-ahead.
Vivekanand Subbaraman
Yeah. Extending Robal’s question on the gas sourcing, I understand that some of your contracts, especially the Petronet and Shell contract, they are expiring in 2025, right? There is a 3, 3.5 contract and another contract, I guess, which is with Reliance is also — perhaps it has expired in December. So if you could tell us what your strategy is for the sourcing here on because the market contrary to what investors were expecting about six months ago when spot LNG prices everyone was talking about a gas plut and spot LNG being priced at $5, $6. On the contrary, now it’s like $14, $15, right? So how should we think about the mix between long-term sourcing, spot and also the pricing in terms of percentage brand slope or Henry Hub as you may want to ink those contracts? Thank you.
Dipen Chauhan
Yes, see, we are aware of the contracts which are expiring and one of the contracts have already expired with respect to Reliance. So we basically as GSPC is the sourcing partner for Gujarat Gas, they are in already negotiation with — for long-term agreements with respect to replacing those volumes. So at an appropriate time, we will be informing the market with respect to the new agreements we’ll be getting into..
Vivekanand Subbaraman
Okay. And could you give us some color on how GSPC’s performance has been for the nine-month period? It would be nice because the company is going to merge into Gujarat Gas and it will be good to have some visibility of GSPL — GSPC’s performance as well.
Dipen Chauhan
Yeah, at the half yearly, the company had a turnover of close to INR11,000 crores and with an EBITDA of close to INR1,200 crores. And a profit-after-tax of close to INR900 crores.
Vivekanand Subbaraman
Okay. Yeah. Thanks a lot.
Dipen Chauhan
Details are available on the website of GSPC. You can have a look at that.
Vivekanand Subbaraman
Okay. Okay. Okay. Thanks for guiding me on that. Yeah. Thank you. All the best. Thank you.
Dipen Chauhan
Thanks.
Operator
Thank you. Thank you. Next question comes from the line of Amit Murarka with Axis Capital. Please go-ahead.
Amit Murarka
Yeah, hi, good afternoon. Thanks for the opportunity. So firstly, on the gas sourcing, while you mentioned that there was a 45% shortfall, could you provide a full mix of the sourcing that you had in Q3?
Dipen Chauhan
Yes. Yeah, you are okay. Yeah, we can tell you that. Basically, the majority of the gas coming from GSPC with respect to the long-term, that is just as we mentioned the Petronet thing, the spot thing, which is spot was close to 2.33, which GSPCC supplied for the shortfalls. And then basically, we had other domestic sources also which was coming in the form of IGX. We sourced close to around 1.35 from the other domestic sources that includes the IGX, the EnerTech, the, new well gas. Newwell gas was close to 0.54. So 6.16 was sourced from GSPC and the rest 1.35 was from the other domestic sources.
Amit Murarka
So when you say 2.33 from GSPC, you’re talking of spot LNG over there, is it?
Dipen Chauhan
Yeah. 2.57 was the spot. Of the 6.16 we source on VSPC, 2.57 was the spot.
Amit Murarka
Understood. And you’ve signed no new contracts you saying in Q3. So no bless, it’s the same. In fact, some has expired. Okay, fine. And also on the non-MORBI volume, so like it has been inching up every quarter as we see. Generally, what is the outlook on that now?
Dipen Chauhan
Outlook is very positive. And apart from our existing area, we are setting up a more network in the comparatively deemed area, that is Ahmedabad rural,, and some portion of.
Amit Murarka
Okay. Okay. Understood. Also, lastly on capex, generally, what is the planned capex for next year now, FY ’26?
Rajesh Sivadasan
Yeah, we are planned — we are planning close to INR1,000 crores, not less than INR1,000 crores. So the budget process is going on. So we are estimating most around INR1,000 crores. We’ll be coming with those exact numbers maybe in the next quarter.
Amit Murarka
Right. And this year also would be similar or how would it be?
Rajesh Sivadasan
Yeah, this year also this year. This year, we’ll be having around INR80 crores to INR800 crores INR850 crores of capex would be there.
Amit Murarka
Okay. And just lastly on the scheme on of CNG where you were planning to kind of do it on a dealer-owned model. So any progress on that?
Dipen Chauhan
We have already signed more than 50 dealers agreement with the Abdoro under the Abdoro scheme. With a condition is that you have to build your stations within the year-one year from signing of the agreement. So I think the block has started ticking. Apart from that, we are in discussion with other OMCs also and they are also interested into getting into.
Amit Murarka
Sure. So is there any time commitment for these 50 agreements we’ve signed that this much station that?
Dipen Chauhan
One year. Means from the date of timing of the agreement, you have to bid — means you have to commission your station within one year.
Amit Murarka
That’s right. And these will be what a couple of stations per agreement or how is it?
Dipen Chauhan
Pardon?
Amit Murarka
No one the agreement, you mean 50 stations, is it?
Dipen Chauhan
Yeah, you’re right. Okay. So the 50 agreements which have been sent, they have a one-year period to operate those CNG stations as a commitment from that side.
Rajesh Sivadasan
And we are in the — we are in the process of signing at least will cross 100 in this quarter.
Amit Murarka
Got it. Thank you very much thank you.
Operator
Thank you. Next question comes from the line of S. Ramesh from Nirmal Bank. Please go-ahead.
S. Ramesh
Thank you. So if you look at your roado stations and the OMC stations and the franchisee stations. Now they are pretty much the lion’s share of your CNG outlets. So the kind of margins you are earning in CNG, what is the kind of commission you have to pay for the existing arrangements with all these dealer-owned outlets apart from the COCO outlets?
And for the new agreements, would the commission rates be similar? And to that extent, if you get the volume growth, assuming that goes into your gross margin, which is directly going to your EBITDA per SCM, that could possibly be an upside. So is there any increase in the commission you have to share for these new agreements?
Dipen Chauhan
Actually, I mean this is not apple-to-apple comparison because the kind of scope of work-in our existing the franchisee agreement and the agreement, which is agreement, there’s a difference because opex and capex is in the scope of the dealers. But I’ll still share the number in scheme, for online stations, the commission will be in the range of INR5 per kg, while for booster stations, it will be in the range of INR10 per kg.
S. Ramesh
So if you look at the ROCE on your CNG business, that’s a good point. So at the EBIT level, all these differences get given out. So in terms of the ROCE for your CNG business on this model, would it be similar or would you give — would it give you some incremental basis-points increase in your ROCE given that it’s an asset-light model? And how much would that spread be?
Dipen Chauhan
Hey, actually, I think with respect to ROC, the ROCE will definitely increase because we will not have a capital base for that, for the model.
S. Ramesh
Okay.
Dipen Chauhan
So the entire investment is being taken care by the dealer himself. And with respect to certain expenditures which we are incurring today for the franchisees, that also the INR8 takes care of the entire — entire cost with respect to operations. So there is no additional expenditure on Gujarat gas with respect to more than INR8 from these stations. But with respect to that, this will be a better return model for us.
S. Ramesh
Okay. So when you talk about the CNG vehicles, that number doesn’t shift. So is it possible for you to give us what is the addition of CNG vehicles in this quarter or nine months period and what is the you know, more a reliable number for the CNG vehicles in your GAs than?
Dipen Chauhan
I think in Gujarat, we had close to 30% of the four-wheelers being sold from CNG itself.
S. Ramesh
So that’s the quarter number. And what would be the delta? So if you want to — because other companies give we have any vehicle additions, if it’s possible for you to give that number at least in future call, that would be useful because that 4 lakh number doesn’t change in any call. So in terms of the incremental growth, that vehicle addition data would be useful. So that is just a suggestion from my side. So on the GSPC half yearly numbers, can we get the volume of gas trading they would have done in this half yearly number if possible?
Dipen Chauhan
With respect to the volumes which we — with respect to GSPC you are talking about?
S. Ramesh
Yeah.
Dipen Chauhan
Yeah, it will be close to 11 to 12 MMC.
S. Ramesh
11 to 12. So in terms of one post-merger compared to what they are earning now, what is the kind of levers you have to improve that marketing margin given that there’s a lot of competition and sensitivity involved. So is there a sacrifice you may need to make in the marketing margin and settle for volume growth to give you the overall growth in EBITDA and ROCE, how do you see that situation, say, once the acquisition is completed?
Dipen Chauhan
Yeah. I think there is a lot of synergy when the merger happens. The thing is we are into these years wherein there is a — the volumes already are there, which basically Gujarat gas is only catering to volumes up to 50,000. And Gujarat GSPC takes over more than 50,000. So basically, the marketing infrastructure which is there already in-place in Gujarat Gas will be definitely advantage for the combined entity with respect to selling of gas volumes. And now we are looking at the entire pan-India with respect to the expansion of gas volumes now. So we have a better force to take care of that now.
S. Ramesh
Okay. Thank you very much. I’ll join the queue.
Operator
Thank you. Thank you. Next question comes from the line of Rajan Sivasankaran with Antique Limited. Please go-ahead.
Varatharajan Sivasankaran
Thanks for the opportunity, sir. I just wanted to check on this hydrogen blending. What is the kind of proportion we do as of now and what is the cost of buying of hydrogen and going-forward, what is your target?
Dipen Chauhan
Yeah, I mean, currently we are actually doing the pilot project with NTPC. There is around 2000s are there in the NTPC cars out in colony. We have made arrangement with them and we are — the green hydrogen is being supplied by NTPC and they are charging us at the same natural gas price charge. It’s something which is not procured by us not being taken on a commercial labor at this venture.
We have completed blending and testing at 8%. We originally have started with 5%, then we have increased to 8%, 8% model has also been successfully proved. So now we are gearing up our system to increase it to 15%. We are seeking regulatory approvals in this regard. And once we have regulatory approval in-place, go-ahead and increase the blending level from 8% to 15%.
Varatharajan Sivasankaran
So this 8% is across all the GEAs as well.
Dipen Chauhan
No, no, I think only a pilout — file notes being taken-up on commercial basis at this venture. It is only a pilout project restricted to housing colony of.
Varatharajan Sivasankaran
Okay. And how about the CBG blending as of now?
Dipen Chauhan
CPG, I think we are the first company to have CBG connected to our network and we are recently in the process of signing at least six more CVG suppliers agreement. And presently there are three suppliers with whom either we are taking compress biogas or we are taking gas into our network.
Varatharajan Sivasankaran
Yes, sir. And finally, sir, on the capex front, like you were mentioning the numbers, INR850 crores and INR1,000 crores. Now, this is like in future, when you have the of INR100 crore or 150 crore whatever that number is going to be over the next 18 months, we’ll still have this kind of a capex intensity come up on our books?
Dipen Chauhan
Yeah, we’ll still have it because reason being we are targeting to convert most of the CNG stations online. So there will be an investment with respect to that. Capex will be there.
Varatharajan Sivasankaran
Thanks a lot, sir. I’ll come back on the queue.
Operator
Thank you. Next question comes from the line of Yash Nandwani with IIFL. Please go-ahead.
Yash Nandwani
Good afternoon, sir. Sir, I believe the Morbi cluster was initially scheduled to undergo a one-month shutdown starting in January, but now it has been delayed. So could you please provide an update if they are planning any shutdown in the near-term?
Dipen Chauhan
I don’t think so. We are planning any shutdown in the near-term. Either we are getting any feedback from the customers also.
Yash Nandwani
Okay. And second question was, do you still maintain your EBITDA margin guidance of INR5 to INR6 per SCM?
Rajesh Sivadasan
No, we will be revising it to 4.5% to 5.5%, especially in light of the APM gas reduction.
Yash Nandwani
Okay. Thank you, sir.
Operator
Thank you. Next question comes from the line of Shibham with Voyager Capital. Please go-ahead.
Shubham Shukla
Hi, good afternoon, everyone. Can you hear me?
Dipen Chauhan
Yeah, we can hear you.
Shubham Shukla
Okay. Hi. Sir, my questions are largely from like industry’s point-of-view. I recently started tracking the natural gas sector. I’m quite new into this. So please help me understand the macros here.
Sir, in the last 10 years, our national — natural gas volume consumption has grown like 2% to 3% and we have target to reach 500 MSCMD by 2030 and like double our share in overall energy consumption from 6% to 15%, 6% to 15%. Sir, this will require like high-teen digit like volume growth. So like which we haven’t seen, like the consumption is very low. So like what is the 6% to 15% story, like what’s stopping us, what are the obstacles? Does national gas grid completion play like any favorable role in this?
Dipen Chauhan
Yeah. I think you need to look at in a perspective from each state-to-state. For example, whatever you are trying to say from an India perspective, if you look at Gujarat, we have — the consumption ratio is close to 25 percentage. So we have almost exceeded the limits which even the government of India has provided. So that’s the reason being, we are totally connected to the grid and most — all the cities are practically having the CGD network. So if that type of a type of setup is coming up in each of the states. So basically, we’ll definitely see an increase in the levels book of consumption with respect to that.
Shubham Shukla
All right. So like you don’t have like a national perspective like you like apart from.
Dipen Chauhan
The national perspective, the national grid will play an important part. See, there are isolated places where you have grids in bits and pieces that needs to be connected just as electricity has to be connected. We have to connect the gas with together. So automatically the free flow of gas happens from the sources to the end-customers. So that is a very critical point in basically increasing the consumption going-forward.
Shubham Shukla
Okay. Okay. So on the like consumption side, like our — like we know fertilizer is the largest consumer-like in this sector. But CGD has taken like second spot like after — like power sector used to be the second one. Do we expect any like change in these top three spots like going ahead by 2030 or like CGDs like continue to outperform like take like first step — first spot side.
Dipen Chauhan
See the volume of volume which is required in fertilizer and the CGD industries are totally different.
Shubham Shukla
Okay.
Dipen Chauhan
So that’s the reason fertilizers will be on-top. But gradually CGDs will pick-up because once the penetration happen with respect to the network in each of the GE, the government of India has allocated, automatically the scales will increase. But to reach a scale of which is the power sector or the fertilizer sector is different because the volume requirement over there is different.
Shubham Shukla
Okay. Okay. Sir, if I can squeeze one more question. The has announced these common carriers. I am like I’m finding difficult to understand if you can and like explain a bit like what exactly is this like? Is it similar to what this unified tariff like what they are trying to get is with like fixed ROCE, you can have like similar type of what we have in business or like in transmission business. Does it — like is it similar to in any way that’s similar to that?
Dipen Chauhan
Or performance period concept is already prevalent in the transmission business where entities or the transmission companies like and GSPL are required to make available 25% of their capacity for common carrier use. So any third-party can. 75% is something which is available for their own use or for being used as a contract carrier. Similar concept is time to be introduced in CGD business also, but CGD business is on a very different footing as compared to the transmission business. And the model of common carrier implementation in CGD business, I think our markets are still not matchable enough to that.
So first time PNGR, we introduced this regulation in 2020, 2021. So we approached Delhi High Court and obtain the stay order on that. Stay order was continuing till now and the very recently around June, July 2024, the NGRB has modified has repealed the regulation and came up with a new regulation. Maybe one of the reasons could be to overcome the division challenge which was posed by GGL and other CGD entities. So — and even for the current regulation, we have approached Delhi Court and obtained a order as a favorable order from Delhi High Court. So started a consulting — consultation process, but they cannot take any course of action against us. That’s what the focus is on common carrier for business.
Shubham Shukla
All right. Sir, just one question to our company-related. This, like you mentioned the delta between propan price and our gas prices, which is roughly INR4es. Have you calculated anticipated impact which will have like due to this because we can’t just like — we can’t just change the rate because our sourcing is already expensive because of the APM cut.
Dipen Chauhan
See, I think we have gone through the cycles earlier also and basically we have seen this INR4 difference, I think in the month of June, July, August also — July, August, September also. That is the Q2 of this year. So I think the volumes would be there, it will be under pressure over there. So basically, we are looking at a volume maybe of 2.75 to 3, that’s the range which we are anticipating.
Shubham Shukla
Okay. All right. That’s it. That’s from my side. Thank you so much.
Operator
Thank you. Next question comes from the line of Sabri Hazarika with Emkay Global. Please go-ahead.
Sabri Hazarika
Yeah, good afternoon. So I have a few questions. Firstly, in terms of terms of your fall in EBITDA, say, for example, Q-o-Q it has fallen from say around INR500 crore to say INR400 crore excluding other income. So how much of it was due to PNG and how much — how much of it was due to CNG?
Rajesh Sivadasan
We don’t maintain that breakup between the two things.
Sabri Hazarika
Okay. But roughly out-of-the INR400 crores, how much would be the contribution of the CNG segment? Number will also do.
Dipen Chauhan
Rough but in the sense. See, I think we look at it now from an overall level, so we don’t bifurcate between the things.
Sabri Hazarika
In terms of segmental EBITDA, any color on that?
Dipen Chauhan
No. No.
Sabri Hazarika
Okay, sir. Secondly, regarding your merger process, you mentioned that next week we will be filing for approval with MCA, right?
Dipen Chauhan
Yes.
Sabri Hazarika
Okay. And after that, what else could be there?.
Dipen Chauhan
So in case of a non-government company, the approval for mergers or a scheme of arrangements required from NCLT. But in the current case, in the present situation, all the companies involved in the scheme are government companies and that’s where the mandate is to obtain a regulatory approval from the Ministry of Corporate Affairs. The moment we have approval from MCA, the scheme will be filed with ROC and that will be the effective date of the scheme. So before MCA finally approves the scheme, there are some processes to be followed. We have to get an NOC or no objection from regulators. You also have to move and convey shareholder meeting and get clearance from them as per the reform.
Sabri Hazarika
Got it, sir. And regarding — I mean, you mentioned Morbi volumes you’re expecting 2.75 to 3 in the same, right?
Dipen Chauhan
Yeah, because of the price difference and especially the propane prices coming down.
Sabri Hazarika
Okay. Okay, fair enough. And right. And this 4 lakh vehicles that you have mentioned that you have under CNG, how — what was it one year back?
Dipen Chauhan
INR4 lakhs, different times. 3.5 around 3.5 to 3.4 times.
Sabri Hazarika
One year back, right, right?
Dipen Chauhan
Okay. Okay.
Sabri Hazarika
And sir, just one last question. So I was looking into the GSPC number that you have mentioned. So the profitability seemed to have, I think, gone up significantly. So your volumes have remained 11%, 12% year-on-year, anything particular — I mean it’s because of high-margin because of arbitrage or was there something else also?
Dipen Chauhan
No, we have been selling to other sectors also fertilizer, et-cetera. So basically we have — in the first-quarter we have under margin because of selling from there. And we had sources of gas which were cheaper. So basically we could bid for the other — for the sales which were happening because fertilizer and other companies come through a bidding process. So we were successful in those bidding and we were able to source it at a competitive price.
Sabri Hazarika
Okay. So Gayle seems to give us a margin guidance. So do you have an EBITDA guidance for GSPC? I mean minimum guidance. I know it can be anything. Of course, there could be exceptional circumstances also, but looking into a normal picture, I mean previously, INR1,100 crore INR200 crores was that number which we seem to have assumed. So that holds or is there any change?
Rajesh Sivadasan
I think this is a Gujarat gas call. So basically, I will not be enough pushion, but you can always take the previous numbers as a base to estimate that.
Sabri Hazarika
Okay. Got it. Fair enough. Thank you so much and all the best.
Operator
Thank you. Thank you. Next question comes from the line of Ketan Mehta with Paroda BNP Paribas Mutual Fund. Please go-ahead.
Kirtan Mehta
Thank you, sir, for the opportunity. For the GSPC, would you be able to share the EBITDA split between Gujarat Gas and other customers as you have done in case of the mergers?
Dipen Chauhan
EBITDA split in the sense?
Kirtan Mehta
I mean, how much EBITDA GSPC earned from trading with Gujarat Gas and how much was attributable to the other customers?
Dipen Chauhan
No, I don’t think so we maintain that. See, with respect to Gujarat Gas, we have to do an arms lem sale. So that’s always-on an basis, the sale is happening because of the related-party transaction which is there?
Kirtan Mehta
Right, sir. Second question was about the model. What — would there be any restrictions for dealers to CNG station to shift to the other alternate supplier if in case the open network scheme gets implemented?
Rajesh Sivadasan
I don’t think so, because the land and the equipment we have taken it on a
Kirtan Mehta
Right. So basically, if model in that sense, would our risk be higher that dealer can offer an alternate supplier? I mean, does it increase the risk for us?
Dipen Chauhan
Yeah. No, there is no-risk taken care of the risk regime which you are referring to in the capital agreement which we have signed with the dealers.
Kirtan Mehta
Sorry, could you repeat, sir? I didn’t follow.
Dipen Chauhan
Taken care of the risk which you are referring to in the agreement, which we have signed with the dealers.
Kirtan Mehta
So what kind of restrictions would be there on the dealer? That is what I wanted to understand.
Dipen Chauhan
That’s meant for a particular purpose. So the entity of the agreement has to prevail and it has to be utilized for that purpose only.
Kirtan Mehta
Sure, sir. Thank you.
Operator
Thank you. Next question comes from the line of Kamal with InCred Capital. Please go-ahead.
Pratyush Kamal
Yes, sir. So I have couple of questions. First is regarding the PCT reduction of propane from 15% to 2.5%. So I just wanted to understand the impact which will having — which will have on the spreads between the between the propane and then the gas which we are selling to Morbi and some other places, particularly industrial customers?
And second one is regarding understanding if you know, natural gas comes under the purview of GST, what is the kind of benefit which you are expecting to have? And what are the kind of benefits which the customers are going to have in terms of reduction of the prices and what are the kind of bad rates which you currently peer or which the customer bond when the — when the gas finally reach-out to them? So these are few other questions which I have sir.
Rajesh Sivadasan
Okay, could you repeat the first question? We cannot get you.
Pratyush Kamal
Yeah. So in the, there was a — there was some kind of provision that the propane prices, the liquefied propane PCD has been reduced from 15% to 2.5%. So what’s the kind of impact which we are probably going to have on the spreads between the propane and the natural gas which we sell to our industrial customers?
Dipen Chauhan
No, no, I think there is a — some miscommunication which is there. The propane which is being sold at Morbi, etc., where there at concessional rates that were 2.5% already they were at concessional rates. So what has happened in the budget, they have changed the general rate from 15% to 5 percentage, but already the concession was already — concession notification was already in-place for that, but the lower — lower percentage of tariff there. So there is no change with respect to the tariff which is there with respect to propay.
Pratyush Kamal
Understood, sir. And how about the GST1 if what’s the kind of bat which the customers are currently paying in Gujarat, wherever your customers are there in terms of CNG and of PNG domestic? And if the natural gas comes under the purview of GST, what’s, what’s the kind of benefit which you are expecting to get from it? And plus what’s the kind of cost-reduction, the price reduction which customers are probably customers can expect from — from it coming into the view of GST?
Dipen Chauhan
Yeah, see the CNG is close to 5 percentage and for industrial customers, the effective rate is 6%. The way as Mujarat Gas has to claim the refund of 10 percentage from the government. Truly, the benefit for GST coming in is basically they can get the input credits. Today, this percentage is a cost to the customers. So that’s a huge benefit with respect to the customers. For example, propane that it’s under GST to get the benefit of that credit, the input credit is available for them. Once this comes under that automatically there is — there will be a definite increase in the gas consumption going-forward because it will be much competitive with respect to other fuels.
Pratyush Kamal
Understand, sir. And is — does it work this way that you take it — you take-up the gas from GSPC and there is some kind of bad which gets imposed when you — when the ownership gets transferred from GSPC to Gujarat Gas. And when you sell it to the customers going-forward, then there is again 5% of that which you just mentioned has been put on the customer. Does it — does the value spend look like this or how does it usually look?
Dipen Chauhan
No, though, far as on gas is under that, the GSPC would get the input credit for that, input and the output credit would be there. So that only the incremental value would be tax to that extent. Only thing is the end-customer would be paying that as a cost. So he will not get any credit for that. So for that is just a product — the cost is added to his product there. So for him once it is coming under the regime, they automatically gets an input credit for that also.
Pratyush Kamal
Understood, sir. Understood. Thank you. Thank you.
Dipen Chauhan
Yeah.
Operator
Thank you. Next question comes from the line of Yogesh Patil with Capital. Please go-ahead.
Yogesh Patil
Thanks for taking my question, sir. Sir, we wanted to understand the PNG industrial potential at Morbi in the long-run. In the last two calendar years, we are not able to cross the Morbi volumes beyond 3.8 MMSCMD on average basis. So the question is what is the real potential of PNG Industrial volume at Morvi so that we can build-up the same in our model for the long-term?
And sir, if possible, can you also update us on the propane-linked contracts for the Morgi ceramic units, which floated a year back and how many units have shown the interest into the contracts in last one year?
Rajesh Sivadasan
Actually, if you see the market size, presently is of the — in the range of 8 to 9 and with that kind of market size and we in the past also we have reached sale more than seven gas in the market. So it’s a matter of economics and we are connected to all the customers in the. So once the price and everything will be in our favor, if natural gas is favorable, we will again regain that volume.
And for you on that prop and linked GSA gets this agreement, we have received more than 150 customers this form. We are just waiting for the right time, right moment to get it back.
Yogesh Patil
Okay. Okay. And sir, sir, if possible, can you give us an overall volume growth guidance for FY ’26 and any in-house projections of Gujarat Gas for FY ’25 exit volume rate.
Dipen Chauhan
We are in the process and it’s a bit premature to give it to you right now.
Yogesh Patil
Any ballpark number for the FY ’26 volume growth guidance?
Dipen Chauhan
And see, I think you need to understand that our one-third of the volumes are coming from the industrial customers, which are practically linked to the volatility in the gas and the propane prices. So for the rest of the areas, that is the CNG and the domestic customers. The CNG has been growing at close to 12 percentage and we see that growth coming in and the domestic is also moving at close to 5% to 6%. That will also be — we’ll be sustaining that growth or maybe exceeding that growth.
But with respect to industrial is the area where we are — it is very difficult to estimate the growth basically, if the prices comes down in — for the spot prices comes down and goes below propane, basically, we may be even selling five MMS CMD over there.
Yogesh Patil
Okay. Thanks. Thanks a lot, sir. Thanks.
Operator
Thank you. Next question comes from the line of Amit Murarka with Axis Capital. Please go-ahead.
Amit Murarka
Yeah, hi, thanks for the opportunity. Also, regarding the GST thing again. So any sense that you get as to why when can this make progress? The kind of quite a bit of anticipation some months back, but nothing happened?
Rajesh Sivadasan
We are also anticipating the same thing as you are anticipating it.
Amit Murarka
Okay. So there is no visibility as of now that even if this year it could happen or not?
Dipen Chauhan
Yeah, we are expecting it should come in, but when it is, that’s the bigger question to be answered.
Amit Murarka
Okay, right. And you also mentioned that you have to claim some 10% tax from the government, what exactly is that?
Dipen Chauhan
No, the industrial we are selling is selling at 16 percentage. And basically we get a refund from the government up there — the customer pays six percentage and 10% we claim a refund from the government
Amit Murarka
So within Gujarat sales you mean?
Dipen Chauhan
Yeah, within, that is the thing. That’s the concessional thing which the government has given to the industrial customers.
Amit Murarka
Got it. Got it. And out of Gujarat is 16%? Okay. Thank you. That’s all there.
Operator
Thank you. Next question comes from the line of Kartik Kohli with CLSA. Please go-ahead.
Kartik Kohli
Hi, sir. Thank you for taking my question. Just had a quick one. So you mentioned that the price — like our price is roughly around 47 INR47 for Morbi region and what will be the price for the non-Morbi region?
Dipen Chauhan
It will be around INR3 more. So rupees.
Kartik Kohli
INR49 and what is the landed price of propane you said, so that’s INR4 less. That’s the landed price at INR43%?
Dipen Chauhan
Yeah.
Kartik Kohli
Okay. Thank you so much, sir.
Operator
Thank you. Thank you. Next question comes from the line of S. Ramesh with Nirmal Bang. Please go-ahead.
S. Ramesh
Hello, thanks for the follow-up. So when discussing Morbi, the 3.35 which you did, what is the overall energy consumption in in 3Q and what is it now to take both PNG and propane together? More or less 50 — more or less 50-50, I can say. Okay, 6.5%. So if you look at the tile sector now there’s lot of concerns about the tile export growth and the operating rate there. Obviously, the freight rates have come down. So how do you see the tile operations going from here? Do you see improved utilization on exports or is it still some time away because of the global slowdown? What is your reading of the tile market, which is important for your overall energy demand there?
Rajesh Sivadasan
Now if you see the latent geopolitical scenario and the way the — I can say Trump government is working and the kind of initiatives they are taking in the Middle-East and surrounding area, I think we are hoping that slowly, slowly, but the situation will improve and it will be good for the construction industries in that part of the world. And if that will happen, definitely demand for tiles and everything will be increased. And so the volume of more we will also increase.
S. Ramesh
Okay, thank you very much and wish you all the best.
Operator
Thank you. Next question comes from the line of V with Avendus Spark. Please go-ahead.
Somaiah V.
Thanks for the opportunity, sir. The first question, would it be possible to give some color on what would be the marketing cost that you will be paying on a blended basis at a portfolio level?
Rajesh Sivadasan
Marketing cost for what?
Somaiah V.
What will be our marketing charges that we’ll be paying, let’s say, for a long-term contract or what contract that we have picked-up that we perform. So very rough size.
Rajesh Sivadasan
There is no — no, there is no marketing charges separately.
Somaiah V.
So when we procure these long-term contracts, let’s say on a brand basis, let’s say Brent is and then we you have a slope, let’s say, for 30% of slope, $9, $9.5. So by the time it reaches to us, what are the additional costs that we end-up paying over and above the underlying commodity costs?
Rajesh Sivadasan
Okay. You are saying that from the day from the landing to the burner, what is the cost which you have been incurring? That’s basically the regasification charges there and the transportation charges there.
Somaiah V.
Regasification. Okay, got it. Sir, also from a sourcing standpoint, would our strategy remain the same in terms of how much amount of–
Rajesh Sivadasan
Sir, your voice is — your voice is not clear. Can you go
Somaiah V.
I’m audible now. From a sourcing standpoint will you continue to have a, 30% 35% kind of a spot exposure or how are we thinking about it, especially with our contracts are coming up for renewal?
And also a second thought there. So in terms of Brent versus Hub, so will we continue to prefer Brent only given that we have a competition with propane. So just wanted your thoughts on that.
Rajesh Sivadasan
So going-forward, we will have it — our portfolio will have a combination of Brent as well as Henry Hub going-forward. That’s how we are looking at new agreements also.
Somaiah V.
And spot, we’ll continue to have the 30% kind of a spot mix or try and reduce it, how will you think about it?
Dipen Chauhan
No, but gradually when, see, the problem is the APM gas allocation is fluctuating. So once I know the final allocation or the scenario which is there and the stability in the volumes which are going to come in, then automatically I’ll go and hedge it off against the long-term contract. I’ll not always be dependent on the spot which is there because that’s not always available — advisable especially when I have to have a stable margins.
Somaiah V.
More from the industrial front, sir. I understand from CNG front, you will — for a shortfall, whatever it is, you will try for a long-term contract. But from the industrial portfolio, historically, we’ve had a 30% type spot exposure, would that continue or there again we will tie-up incremental contract and bring it down?
Dipen Chauhan
So there the problem over there is because we have competing with propane, right? So unless I have a — I get into a long-term agreement for sourcing, which is almost linked to a propane, I’ll not — I’ll be still dependent on the spot to come in.
Somaiah V.
Okay, got it. So your spot LNG sourcing cost, if you could give for the last quarter?
Dipen Chauhan
, what would what would be around just a minute. It’s around close. It was close to INR41 rupees per SCM.
Somaiah V.
And what would be the current spot pricing for equivalent number?
Dipen Chauhan
It has increased to close to INR48 now. The earlier — the value which I told was for the entire quarter and this is the present one which is there.
Somaiah V.
Okay. Understood, sir. But I also believe given — I mean the lag impact on the Brent contracts, so we’ll probably get some benefit because of that in this quarter because the last quarter Brent was relatively lower compared to the previous quarter.
Dipen Chauhan
Yes, you are right. Okay, that lag will come in this quarter.
Somaiah V.
Helpful, sir. Thank you.
Dipen Chauhan
Thanks.
Operator
Thank you. Next question comes from the line of Hardik with ICICI Securities. Please go-ahead.
Hardik
Sir, can you just give us more detail on expansion plan towards the — how we can grow the volume in terms of industrial volumes and also on the CNG part for the detailed expansion plan?
Rajesh Sivadasan
Yeah I you can already last call also we have told you that basically we are looking at expansion in the newer areas, especially the — especially the Thane area, the new — rural area wherein we are seeing a significant growth in volumes. The Dahej area, the Thaneth, the DNH area, these are the areas of growth for us now. So these are areas from where even the CNG and the industrial volumes are coming in.
Hardik
Okay. Okay. That’s helpful. Thanks.
Operator
Thank you. Next question comes from the line of with Indian Petro Plus. Please go-ahead.
Shantanu
And I was just conceptually trying to figure this out. You said your margins will probably come down to about INR3.5 or something on that sort. So unlike in the fertilizer sector where, of course, there is a constraint on the price of urea at which you can sell it, you don’t have a pricing problem. So if there is an APM reduction in APM volume and if you’re bringing in volume from outside at higher price, what constrains you from increasing the price of CNG and domestic household prices?
Is it political considerations or is it something else with industrial customers, of course, it’s a straight one-on-one relationship.
Dipen Chauhan
No, I think we have increased the prices by INR3. In December, we increased by INR1.5 and in January 1st we increased by 1.5. So there is no political pressure at such.
Shantanu
So why does your margin come down? Is it essentially because of the industrial pressure?
Dipen Chauhan
No, it’s not of the industrial pressure. So ultimately, we were getting a source of gas which was cheaper earlier. Yeah. So today we are not getting — basically there is a reduction in those volumes. That’s practically applicable to all my other industrial peers also.
Shantanu
No, but this is entirely for domestic CNG, right?
Dipen Chauhan
You need to understand that we are developing this the gas ecosystem across the country. So we need to price it in a manner that over a long-term, the growth also happens in this sector. So if I price it more than petrol or is you equivalent to petrol, that conversion automatically will come down.
Shantanu
But you already have quite a big delta with petrol and with and petrol. So you can probably limit the delta and keep raising your prices, you will still get customers or there is a certain delta beyond — below which customers are not going to come.
Rajesh Sivadasan
Yeah, but I think we have maintained that and that’s — that’s reflected in our margins also.
Shantanu
Okay. Fair enough. The other question I just had because I couldn’t get the details. Could you just detail out what are the long-term contracts that you — which you have and which of them are expiring and for what volume?
I mean, you don’t need to tell us what the future contracts are going to be. So that data you probably have.
Dipen Chauhan
Okay. So I think we are getting gas from GSPC to the external 6.16, of which close to — close to 3.5, 3.25 is with respect to the long-term agreement that’s Petronet LNG or the GCC building which is there. And only the Reliance gas which has expired now that in December we have expired — the Reliance gas expired. Other than that, the gas is being sourced from the IGX, the other domestic fields also and the new well gas etc., is coming, which I have detailed in the earlier reply which I’ve already given. So I think everyone else has it. So we will come out in you accept for the meeting.
Shantanu
Yeah, okay. Thank you.
Operator
Thank you. Last question comes from the line of Parmeeta with Morgan Stanley. Please go-ahead.
Mayank
Hi, sir. Mayank here. Just two questions. One was I think on the long-term sourcing. I think it’s becoming reasonably clear that the pricing for domestic gas is going to almost remarket pricing over the next few years. So in that context, when you’re thinking about sourcing now, is there a way that you want to kind of manage the sourcing over the next few years considering this APM lack of clarity?
And the second thing was in terms of acquisitions and growth inorganically, is there a focus there going-forward maybe after the transaction and the restructuring is complete?
Dipen Chauhan
Yeah, I — with respect to your second question, yes, we are looking-forward to that. Once the transaction is completed, we will be pursuing that. The management will take appropriate call and even the market would be informed that appropriate time on that. But your first question was with respect to the long-term sourcing.
Mayank
That’s correct.
Dipen Chauhan
Yeah, yeah, long-term sourcing, we are looking at long-term — we are in talks with the suppliers to — we to replace this the gas which is basically the contracts which are getting expired. We are looking at a blend of maybe a Henry or Bora brand linked also and we will come out with the announcement with shortly.
Mayank
Thank you. Okay. Thank you.
Dipen Chauhan
Yeah, thanks.
Operator
Thank you. Ladies and gentlemen, due to time constraints, we have reached the end of question-and-answer session. I would now like to hand the conference over to Mr Sandeep Dave for closing comments.
Sandeep Dave
Thank you management has been focusing on increasing volumes while maintaining a fine balance between volume and margin, and we’ll continue to do so during the last quarter as well. I take this opportunity to thank all participants for sparing the time. Look-forward to your continued support. Thank you all.
Operator
Thank you. Thank you. On behalf of Gujarat Cash Limited, that concludes this conference. Thank you for joining us. You may now disconnect your lines.