Mahanagar Gas Ltd (NSE: MGL) Q3 2025 Earnings Call dated Jan. 29, 2025
Corporate Participants:
Ashu Shinghal — Managing Director
Unidentified Speaker
Rajesh Patel — Chief Financial Officer
Analysts:
Varatharajan Sivasankaran — Analyst
Yogesh Patil — Analyst
Amit Murarka — Analyst
Probal Sen — Analyst
Unidentified Participant
Gagan Dixit — Analyst
Ramesh Sankaranarayanan — Analyst
Kirtan Mehta — Analyst
Sabri Hazarika — Analyst
Saurabh Handa — Analyst
Vikash Kumar Jain — Analyst
Niharika Jain — Analyst
Devang Patel — Analyst
Madhur Rathi — Analyst
Hardik Solanki — Analyst
Presentation:
Operator
Ladies and gentlemen, good day and welcome to the Mahanegar Gas Limited Q3 FY ’25 Earnings Conference Call hosted by Antique Stock Broking Limited. 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 a touchstone phone. Please note that this conference is being recorded. I now hand the conference over to Mr Rajan Shiva from Antique Stock Broking Limited. Thank you, and over to you, sir.
Varatharajan Sivasankaran — Analyst
Thank you. Good evening, everyone. It is my pleasure to welcome the management of NGL and all the participants to this results conference call. We have with us Mr Singhal, Managing Director; Mr Sanjay, Deputy Managing Director; Mr Rajesh Patel; CFO; Mr Mukesh Panothra, AVP Marketing from the management side. Before handing over the call for the opening remarks to the management, I would like to run you through the disclosure and disclaimer as well. Some of the statements made in today’s discussion may be forward-looking in the nature and we believe that expectations contained in the statement are reasonable. However, these statements involve a number of risks and uncertainties that may lead to different results. We urge you to consider that quarterly numbers are not a reflection of long-term trends or indication of full-year results.
Having said that, I’ll now hand over the call to the management for their opening remarks. The floor is yourself.
Ashu Shinghal — Managing Director
Thank you and a very good afternoon to all. And I welcome on behalf of NGL management, I welcome all to the earnings call of MGL for the 3rd-quarter of the financial year ’24-’25. I would like to thank all of you for attending this call today. MGL continues to create CGD infrastructure across its business segments in the licensed area. During the quarter, 98 469 domestic households were connected and therefore, we have established connectivity for nearly 2.68 million households in the cumulative manner. We have laid 99.07 kilometer of steel and PE pipeline, taking the total length to over 7,20 to-4 kilometers.
We also added nine CNG stations during this quarter. And with this, we have 361 stations as on 31st December ’24. We also have added 83 industrial and commercial customers during this quarter. And as on 31st December, we have 4974 industrial and commercial customers. In relation to our ragger geographical areas, up to December ’24, we have connected 8794 domestic households and 55 CNG stations, which are currently operational. During the quarter, we have laid 12.41 kilometer of pipeline in, taking the total length to 445.67 kilometers.
With respect to Unison Enviro Private Limited, the wholly-owned subsidiary, the company has added three CNG stations during this quarter and total of 67 CNG stations as on 31st December. During the quarter, 4774 domestic households were connected and cumulative household connections are at 34,003 for UEPL and they have 63 industrial and commercial customers as on 31st December. Average gas sales for the nine months ending 31st December ’24 is 4.006, whereas it was 3.554 in the corresponding period last year, which is an increase of 12.75%.
Sales volume in the case of CNG have also increased from 2.566 mmscmd 2.859, which is an increase of 11.44%. In case of industrial and commercial, the volumes have increased from 0.482 to 0.604, which is an increase of 25.52%. And the volumes of — for domestic PNG has increased from 0.506 to 0.542 mmscmb, which is an increase of 7.23%. During this quarter, the overall average gas sales volume is 4.116 mmscmb as compared to the previous quarter volume of 4.042 MMSCMD, which is an increase of 1.84%. Sales volume in the case of CNGs is standing at 2.919 as compared to previous quarter of 2.886 with an increase of 1.16%.
In the case of industrial and commercial, the volume is 0.646% as compared to previous quarter of 0.628, that is an increase of 2.86%. Sales for the domestic PNG is 0.551 as compared to the last quarter of 0.528, which is an increase of 4.32%. EBITDA for the nine months ending December ’24 is INR1,131 crore and the net profit-after-tax is INR793 crores. For the current quarter, EBITDA is INR31 crore and net profit-after-tax is INR225 crore.
Coming to UEPL during the quarter, they have achieved an overall average gas volume of — sales volume of 0.192 as against 0.164 in the previous quarter, which is an increase of 17.38%. Current quarter volume consists of CNG volume of 0.177 and ENG volume of 0.15. Therefore, MGL on a consolidated entity has achieved total sales volume for the quarter at 4.308 mmscm. Average gas sales for UEPL for the nine months ending 31st December ’24 is 0.175, consisting of CNG volume of 0.162, 162 and PNG volume of 0.013 mmcm.
MGL as a consolidated entity has achieved total gas sales volume for nine months ending December 31 2024 is 4.181 MMSCMD. The scheme of emalgation or merger of UEPL with MGL was approved by the Board in October ’24 last year and the scheme was submitted with two NCLT Mumbai on December 6, December 2024 and the matter was heard by the Mumbai bench on January 17, 2025, and they have reserved the announcement of its interim orders. With respect to Mahanagar LNG Private Limited, a JV of MGL with BLNG in the business of operating LNG as a fuel to vehicles has commissioned its first LNG station at Aurangabad in the month of October ’24 and has sold during the quarter 91 tonnes of LNG with a present sale of around 2,000 kgs per day.
It may be noted that there are reduction in APM allocation in two tranches in the month of October and November across all CGDs. However, part of the APM allocation has been reinstated with effect from 16 January 25. Thus currently, MGL is having 100% APM allocation for its domestic gas and approximately 50% allocation for its CNG sales volumes there is a positive development that in a Mumbai High Court order dated 9 January with respect to Sumoto public interest litigation, they have flagged serious concerns over worrisome pollution levels in the city of Mumbai and region during directing the state government to form a committee to steady feasibility of phasing out diesel and petrol driven vehicles from the roads of Mumbai and permit only.
Motor vehicles which run on CNG and electric charge to reduce pollution to the vehicles. Further, the court has directed MPCB to vigorously monitor and take stringent action against polluting industrial units in the region. In response to this, the transport government — Department of Government of Maharashtra has issued notification Forming Committee on 22nd January to studied and give their report within three months’ time under the chairmanship of Sri Sudhir Kumar Srivasta, retired IS Officer, wherein MDMGL has been included as one of the committee members.
The Mumbai High Court order is a very positive development for controlling pollution in the city of Mumbai and MMR region and has provided opportunity to companies like MGL also who are providing cleaner fuel for transport sector and industry to contribute to the detection of environmental. This is in-line with what has happened in NCR in Delhi also few years back. MGL continues its journey of diversifying and seizing the opportunity in the new energy-related businesses by investing in a greenfield project for manufacturing of lithium-ion cells for electric vehicle batteries and other applications. The company has entered into joint-venture agreement with IBC based out of USA for setting up a fee facility in the state of Karnata in this quarter.
MGL has invested INR35 crore for equity — holding of 44% in JV Company for battery company India Private Limited in the month of January 25. MGL for its Annual Report ’24 has bagged a Bronze award at 14th PRCI Excellence Award 2024 for its remarkable annual report from Public Relations of India. In January ’25, MGL has been conferred with Greentech Global Work Workplace Safety Award 2024 for its outstanding achievement under Excellence in Safety Trading category. I’m happy to announce that Board has approved an interim dividend at the rate of 120%, that is INR12 per equity share for the current financial year.
With this, I conclude and would like — now like to open the floor for the questions. Thank you very much for patience hearing.
Questions and Answers:
Operator
Thank you very much. We will now begin the question-and-answer session. Anyone who wishes to ask a question may press R&1 on the touchstone telephone. If you wish to remove yourself from the question queue, you may press R&2. 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 Yogesh Padil from Dolat Capital. Please go-ahead.
Yogesh Patil
Thanks for taking my question, sir, and congratulations for the good set of numbers. As you mentioned, the recent news flow government of Maharashtra has set-up a panel and exploring phasing out of petrol and diesel vehicles in the Mumbai metro region. We wanted to understand how it will be implemented, that’s one thing. And what kind of CNG volume growth you can see from these kind of a decision? Any ballpark number if you could share with us that would be really helpful.
Ashu Shinghal
It is a very preliminary stage to predict that how it will be unfolding itself. The main point what we wanted to make was that pollution is increasing in Mumbai, which is known to all the citizens here. I mean, they are getting impacted. So taking note of this, Mumbai High Court, the Bombay High Court has Sumoto taken a PIL and given this direction that they wanted to take immediate steps for — in two particular things. One is the vehicular pollution, which is they wanted to replace petrol and diesel in a phased manner by electric vehicles and CNG. And second, the polyting industries can be moved out or they can be promoted to use gas as a fuel. Similar development has happened in the late ’90s in or early 2000 in NCR. And we have seen that in a span of three, four years, the CNG volumes have picked-up in IGL in that particular area.
So it depends that once the committee give its recommendation in three months’ time, which is the time given by the court to submit its report, if similar — there are — I mean, NCR and Mumbai are different regions here the land problem is much more severe. So it depends on what type of allocation or what type of implementation plan is agreed by the government and authorities. We can — currently, CNG volumes are growing at the rate of around 11% in Q nine months of last Q3 and this Q3. So if we more — I mean, that depends on how the recommendations are implemented, we can see a growth of around 15% to 20% in case everything goes in favor of CNG.
Yogesh Patil
Sir, Mumbai High Code also directed to BMC that the CT bakery unit should not use the polluting fuel like wood or coal and they have directed bakery to convert to use gas or other greenfield in the next one year. What is the additional PNG commercial volume do you expect from this move? And also correct me, if the PNG commercial volume increases, then it also boosts the overall price realization of a company because as per our understanding, the PNG commercial is the costliest product among the all.
Ashu Shinghal
I think when you refer to commercial, within commercial, there are 2, 3 categories. The realization which is linked to use of LPG commercial bottles is generally higher, which is I think falling into a restaurant category. I’m not too sure about bakeries we may fall in which category. Mostly, yes, there will be a better realization, but not as high as a commercial A, which is linked to a commercial bottled LPG, okay. So that is one. Just to add with respect to the port order, I think based on the assessment, we have a preliminary assessment of number of vehicles in our geographies, okay.
Within that, if I take number of commercial vehicles, which are mostly on diesel are going to get impacted initially and that number is around 4 lakh in our geographies. And currently, we have around 38,000 such commercial vehicles already on CNG, which is about 9.5%, 10% penetration. So we see that this commercial vehicle segment could be a volume charmer for us if something happens because that could be the first second step to control pollution in terms of fuel vehicle-related fuel.
Unidentified Speaker
Further, the volume offtake will not be very huge in terms of the bakeries and others because we are small establishment and it takes some time to connect to them also. It will not be a very significant.
Yogesh Patil
Sir, next question, sir, CNG volume is growing more than 10% last four quarters consistently. Now what would be your guidance for the CNG volume in upcoming year? Will you little bit inch up to the 8%, 9% for the FY ’26?
Unidentified Speaker
No, if you talk about the overall volumes, we were thinking about 8% year-on-year growth. But in nine months, we have already clogged 11% growth from the last whole financial year numbers. So if we take Q4 also into account, maybe we will clock around 12.5% to 13% growth year-on-year. Now maybe next year, we will not be able to have that much number, but we are comfortable that around 10% numbers we will be able to clock next financial year also. And which will be definitely — CNG will be a main contributor in that growth along with industrial and commercial segment.
Yogesh Patil
Thanks a lot, sir. I’ll come back-in the queue.
Operator
Thank you. Ladies and gentlemen, we request you to restrict questions to two per participant. In case of any follow-up question, please join the queue. The next question is from the line of Amit from Axis Capital. Please go-ahead.
Amit Murarka
Yeah, hi, good evening. Just firstly on the pricing and margin side. So you did take two price hikes of INR2 and INR1 kg each on CNG, but the margin still has dropped. So are you like going back to go back to, let’s say, INR10 or higher-margin as we were doing, let’s say, in the last several quarters or this should be seen as a more stabilized margin now.
Unidentified Speaker
So the margins have — I mean, there has been some impact because we were reassessing our portfolio and the price hike has happened in late of November and second rise has happened somewhere in January — January. So there was some delayed response. And secondly, we have contracted some mid-term gas also on from the existing suppliers or for giving a repeat order. Thirdly, some reinstatement of APM gas has happened as late as 16 of January. So the impact on the margins will be slightly reduced. You’re right, but it will not be maybe as low as the Q3 results. So we may be improving our performance in Q4. And if you see last year, we have had EBITDA per SCM of INR13.95 and for this nine months, we have EBITDA per SCM of INR10.3 per SCM.
So it is not very off the mark of the guidance which we have given about INR10 to INR12. So we expect similar range to continue and depending on the price of LNG, Henry Hub and other contracts, we may be very comfortable in this range, 9% to 11% or 10 to 12% range. I mean it’s — it depends on so many other things. So we can’t be very particular about what will be the range. But we are in a comfortable position because of one that we have made some procurement portfolio adjustments. And second, there have been restatement of APM allocation from 16th of January.
Amit Murarka
Sure. So you mean to say no further price hike is needed in that sense after this restoration of the EPM allocation.
Unidentified Speaker
So more or less 50% of the gas cut has been restored and we had already taken a hike in the range of 50%, okay. One factor which is crucial as of today is also exchange rate because exchange rate has been inching up and around INR85.5 or INR86. So that may have some impact depending on how it moves going-forward. But more or less, we are back to almost a neutral situation, what we were in October mid as of today in January, I’m saying.
Unidentified Speaker
And just to add like, I mean, I know that investors are more particular about both the things, one that the margin, second is the volume. So we also have a very clear-cut I mean line-of-sight for volume growth, which is more important for the longevity of the company. Margins can exist for some time maybe slightly higher or lower.
Amit Murarka
Understood. Understood. And on the volume per se, so like you have been, I think talking about close to 7%, 8% ex of UEPL. So with UEPL, like can we look at double-digit growth now? I mean, I believe UVPL will grow at a faster rate than the core portfolio.
Unidentified Speaker
So we are already clocking double-digit growth as of now. If you see nine months this year compared to nine months last year, okay. And UEPL, all the three geographical areas as well as, both will see at least 20% plus growth and there is a usual growth in GA2 as well as GA1 some margin — at least usual growth of 4.4% to 5%. So we are hopeful that at least for few quarters, you will see double-digit growth. And as Sir said earlier, we can achieve an annual growth of around 10%. Also, there is a — now that high code order is there, we hope that will turn out positive and we will be able to achieve more.
Amit Murarka
And also in terms of your CNG — sorry, yes.
Unidentified Speaker
Yeah, 8% what we had said is, I mean, we have already outperformed standalone on MGL basis only. If you add-on UEPL because it has a small volume, but the growth is much higher there, maybe more plus 20%. So collectively on consolidated basis, we are around 12% growth as of now, 12% to 12.5%. So in the year-end, we expect it to be around 13% or 13.5%. Next year also, we definitely should be in at least in the double-digit, yes.
Amit Murarka
Sure. Got it.
Operator
And also Mr, may we request you to please rejoin the queue. We have participants waiting for the turn. Thank you. Ladies and gentlemen, you are requested to kindly restrict your questions to two per participant. The next question is from the line of Probal Singh from ICICI Securities. Please go-ahead.
Probal Sen
Thank you for the opportunity. Sir, just wanted to get a little bit of sense of what are the capex plans, if you can break it down between the different GAs, including for Unison? And also if you can get a sense — give us a sense of how much to be spent on CNG, how much on-network and so on? That was my first question.
Unidentified Speaker
So the UEPL standalone should spend in the range of around this year at least INR125 crores to INR150 crore, okay, and it will be further up maybe next year because we have now have the ground and groundwork is done. So we’ll be able to do more capex on CNG stations, et-cetera and it would go from INR150 crore to INR200 crores next financial year. As far as NGL is concerned, already INR650 crore-plus capex has been done in this nine months period and we expect anywhere between INR200 to 250 additional capex in Q4 as well. Out of these major will be on steel and low-pressure pipelines, okay, and roughly INR200 crore or the plus-minus 10% on CNG and balance is on steel grid and LMC last mile connectivity.
Probal Sen
Okay. Sir, in terms you mentioned about the EV initiatives that are being taken. Any sense you can give us of when these actually start contributing to revenue in a meaningful way and what kind of potential do you actually see based on the investments that have been made as of now?
Unidentified Participant
It’s a — I mean, we have started two investments in EV. One is 31% equity in three-wheeler manufacturing company in Bangalore and second is a recent joint-venture which we have made with IBC International Battery Company. So in this IBC, we are investing around first phase INR380 crores, which is with a total capex of INR870 crore. And after the — if depending on the performance of the first phase, we can go up to 5 gigawatt factory. The first phase will be 500 megawatt two plants, so 1 gigawatt factory. So it depends like 1.5 year, we will be able to commission Phase-1 and maybe within few more months, Phase-2 of another 500 megawatt of 1 gigawatt plant. So it will start earning revenues from one and a half year from now and it will gradually pick-up. We have 40% equity in that joint-venture and 60% is with the partner. The numbers will be in Phase-1 around FY I — it is beyond that.
Unidentified Speaker
See, we are roughly estimating or while estimating this — evaluating this project, we have taken a discounted rate of around 18% or so. We expect that return should come because it’s a very, very niche kind of area, so higher-rate has been applied, okay.
Probal Sen
But 18% IRR is the assumption, sir.
Unidentified Speaker
Yeah. The whole project cost, okay. So INR1,000 crore revenue is there around fact number or 1 gigawatt factory.
Probal Sen
Sorry, sir, INR1,000 crores per gigawatt.
Unidentified Speaker
Yeah. Account that number, INR900 crore INR1,000 crores. Understood. It is a very, very primitive stage by I’m saying because back per sale realization could range between $100 to whatever. So right now, we are not in a position to give you the confirmed numbers because once after setting up the plant, already the trial runs are going on for testing the cells which are manufactured by the prototype plant already in South Korea. So once we get full customer-base and understanding of this, we’ll be in a better position to talk about what kind of sales revenue and margins will come. But surely when you look at the EV cell as a market, the kind of capacity which we are putting up is very, very small compared to the requirement in India because currently all the EV cells are being imported in India and then battery packs are made, okay. So most of the manufacturers who may not have their own facility of having the battery pack and EV cell tie-up, we will be able to push this — and considering the demand in India-based on whatever survey or the studies we have done, 1 gigawatt is a very, very small number.
Probal Sen
Okay. Sir, if I can ask a follow-up, are we already speaking to some customers with respect to this project?
Ashu Shinghal
The company is not only speaking, but the batteries which are manufactured in the prototype plant at South Korea are being put into the vehicle with the customers, they are tested, we are taking out the reports and all that has been already done since last one year, okay. And most of the reports as of now are positive and we are hopeful to you know that customers continually able to.
Unidentified Speaker
We are already in discussion with some of the customers and very positive response has come. But the final type of contracts will happen once we get more clarity on the final deadline when the project will start producing. And there’s enough time for doing that.
Probal Sen
Understood, sir. Thank you very much. I’ll come back-in the queue. Thank you.
Unidentified Speaker
Thank you.
Operator
Thank you. The next question is from the line of Gagan Dixit from Elara Securities. Please go-ahead.
Gagan Dixit
Thanks. Thanks for taking my question, sir. Sir, for the CNG, this allocation, when you say 50%, so that 50% means that $6.5 that’s the APM, that you are getting if my understanding is correct.
Ashu Shinghal
That’s right.
Gagan Dixit
Okay, okay. And so what are the overall this allocation for the CNG, I mean this other than the APM, I mean, what is the new well guest share and what is the — I mean HPHT guess?
Ashu Shinghal
See, currently, as you said for CNG, we are getting 1.5 million. Another 0.5 million of APM is available for domestic, okay. Other than that, for Q3, company had tied-up 1.25 NSCMD of Henry Gas through almost four contracts and HPHT of 0.5 million and there is an old reliance contract linked to Brint of around 0.1 mmscm so we were left with hardly 0.04 or 05 for an average volume. After this quarter we have hiked our the Henry up contracts to almost 1.45 MMS CMD, okay. And we are getting small amount of NWG, but the long-term clarity on the NWG is not available as of now, maybe it will start very soon in this month only where then we will be able to announce what is the contract with respect to NWG. We expect that it should be in the range of 0.25, maybe this month mid or so, okay. Already there is a HPHT contract which has come up in this month from ONGC and RIL both and some more HPHT bid is going to happen most likely in April by RIL almost of INR5 to 6 NMSCMD. So — and when you compare today NWG price and Henry Hub price or HPHT, there is not much difference.
Gagan Dixit
Okay. So and sir, my second question is about you Sir.
Operator
May I request you to please come back-in the queue, sir.
Gagan Dixit
Okay. Thank you.
Operator
The next question is from the line of S. Ramesh from Nirmal Bang Equities. Please go-ahead.
Ramesh Sankaranarayanan
Thank you and good evening. So if you look at the cell manufacturing project, is there any detail you can share in terms of the overall tax-rate you’ll have to pay for that project, would it be at 15%? And secondly, any sense you can give us on the VAT rate or on the capex and the inputs and the final lithium-ion sell?
Ashu Shinghal
See, basis, I mean, as I told in the last-time also INR875 crores is the total capex, 40% we are funding as equity. And for Phase-2, that means moving from 1 gigawatt to-4 gigawatt, the capex will be in the range of around cumulatively INR3,700 crores. Tax rates on.
Unidentified Speaker
I will come back to you separately on this because I don’t have the figures, otherwise I would have discussed again.
Ashu Shinghal
And the selling price will be on the market price like whatever imports are happening to — from China, similar prices will be offered to the market because that is the market price as of now. Whatever calculations we have done for the profitability of the project is based on import parity price of China. The positive side of it is which we have not considered is in case some duty is levied on the imports from China, especially on the import of battery sales, that will be upside to the project, which we have not considered on the base-case.
So things may look very positive as Rajesh explained that out-of-the total requirement of more than 100 gigawatt, we are just talking about 1 gigawatt and maybe other plants which are making — going to announced or expected is not more than 7, 8 gigawatts. So we expect that if more flip or more push is given to the domestic manufacturing, this can be very good initiative because we are the only company who have the project ready, which is tested on-road from the pilot which has been set-up at Korea and the same setup is going to be repeated in Bangalore. So that’s why we are very positive about this investment.
Ramesh Sankaranarayanan
Okay. On the consolidated numbers and the standalone numbers, if you adjust for the difference, I get a revenue of INR275 crores and EBITDA INR154 crores. So is that number correct for UVPL, which means in 3rd-quarter, it’s about INR102 crores revenue and INR84 crores. The margin seem to be very-high. So can you put the UPL performance in context based on these numbers?
Ashu Shinghal
Yeah so the revenue that was generated during Q3 was INR102 crores for EUPL, with a net profit of about INR1.27 crores. And cumulative for the nine months ended, UEPL earned INR275 crores and the net profit-after-tax generated is INR17.51 crores.
Ramesh Sankaranarayanan
So the question is at the EBITDA levels numbers are very-high explain it.
Rajesh Patel
On a consolidated, you may see that compared to MGL standalone, there is a minor reduction, okay. Now that happens because of the investments which MGL has made and there is a large component of authorization cost, which gets amortization on a consolidated basis. That amortization is a little higher than the profit which are earned currently by UEPL. And that is why on consolidated basis, you may see NGL plus UEPL standalone does not add-up to NGL or it is slightly lesser than NGL.
Ramesh Sankaranarayanan
Okay. No, but based on the numbers have given — yes, sorry. Please go-ahead.
Rajesh Patel
Am I able to answer your theory or inquisitiveness on consolidated results?
Ramesh Sankaranarayanan
No, that is fine. But if you give — go by the numbers you have shared for UPL by itself, from EBITDA to the PAT, this is a fairly substantial reduction. So is there a large component of depreciation and interest there? Because the margins are pretty high. So from that margin, the net margin is very low. So what is happening below-the-line in terms of depreciation?
Unidentified Speaker
Compared to MGL, there are two components. One is depreciation, you’re right. Another is interest cost is also there in UEPL, okay. So if you take cash EBITDA, it is generating around INR50 crore INR55 crore cash EBITDA per annum as of now. And this interest is also within the Group. It is MGL loan which is getting accounted as a finance cost in the books of UEPL.
Ramesh Sankaranarayanan
Okay. And then one last thought. If you look at the vehicle additions and the growth in the CNG vehicles of around 46% year-to-date. Do you think this current run-rate in your GAs will sustain or do you see some upside in the next 12, 18 months? What is the sense you get on vehicle addition? And can you give us some split down the number of vehicles being added across category?
Unidentified Speaker
So we have already — see, if you compare last nine months, last year nine months, we have had around 57,000 vehicle addition as compared to 71,000 vehicle addition in our GAs in these nine months of this current financial year. So if we take Q4 into account, maybe we will close to-1 lakh volume addition, which will be very-high as compared to our last year and previous year’s performance.
So you’re right, 46% growth has happened across the India on CNG, which has outperformed so many other fuels. And this impact is definitely a good sign for CNG whole as an industry as a whole. And we expect that the growth numbers which we are seeing of 10% for nine-month comparison of last financial year, we will be able to maintain it for at least one, two years and from there we will see how the sector is performing.
Ramesh Sankaranarayanan
Thank you very much and wish you all the best.
Operator
Thank you. The next question is from the line of Kirtan Mehta from BNP Paribas Mutual Fund. Please go-ahead.
Kirtan Mehta
Thank you, sir for the opportunity. After this UP merger, will we be able to use any tax synergies, are there any past tax losses which can be utilized?
Unidentified Speaker
And in the books of UEPL, currently there are tax losses and accumulated depreciation around INR35 crores both put together that we will be able to absorb. Also the capex which they are incurring today, INR150 crores-odd and they are not able to absorb that depreciation. On a merged entity basis, we will be able to absorb that early. Of course, UPLR would have absorbed both accumulated losses as well as the capex, but it would have taken, let’s say, three, four years from now, whereas MGL will be able to take that benefit immediately, okay. Right, sir.
Unidentified Participant
The second question was about the APM reinstatement, I believe the next round of the reallocation would be around February 16 or so. So are we confident that the 51% would remain at the similar level during the February or is there a possibility of part reversal again?
Unidentified Speaker
No, I think readjustment has happened two, three times. One was 16th October, then 16th November and now 16 January, this restatement has happened. Earlier was the deallocation means two cuts were there. Now in our information, as far as we understand, the next reallocation or readjustment will happen somewhere from 1st of April because around 7% per annum is recommended to be reduced from APM and put into NWG. The other development we know is that whatever cut from APM will happen will be allocated to CGD entities on pro-rata basis at NWG prices. So basically, the gas will be available APM. The same quantity will be reallocated on basis to CGD at NWG prices and we expect that to happen somewhere from 1st of April.
Right, sir. Thank you.
Operator
Thank you. The next question is from the line of Kamal from InCred Equities. Please go-ahead.
Unidentified Participant
Hello, sir. Yeah. So I have few set of questions, which I wanted to ask. First is regarding your sourcing. So you source couple of — you do have a couple of contracts which are linked to Henry or van, some are linked to brand, right? I just wanted to understand like what is the pricing mechanism for these contracts and what is the general sourcing mix for you? How many like what percentage of the total volumes do you get from Henry Hub versus brand versus APM, et-cetera?
Unidentified Speaker
See, general pricing under this contract has a slope linked to the index. So in case of Henry of it is Henry the Index, there will be a constant, there will be a slope to the index and some fixed costs, okay, whether it is a Henry contract or a brand contract. So this is the normal term contract structure, okay. As far as MGL is concerned, I already said, I think in the last question, overall, including domestic, we are as of now getting 2 million-plus APM. As of today, that means in the January, we have already tied-up Henry Hub contracts. All contracts put together around 1.45 mmscm. HPHT is around half a million okay and rest is spot and whatever NWG we have a small amount of NWG is coming on a short-term basis. But as Sir said, there will be a long-term allocation or allocation like APM in the near-future, maybe this month or by April or so.
Unidentified Participant
Okay. Okay, sir. And what are the slopes and fixed components when you talk about the brand-like contract and.
Unidentified Speaker
Confidential between the supplier and us. We cannot disclose them in the public business.
Unidentified Participant
Okay. Okay, sir. And what is the landing cost approximately for you when you talk about the brand contract versus the Henry Hub contract, the landed cost for you for the company.
Unidentified Speaker
As of now, considering the, with respect to Henry Hub, it ranges between $9.5 to around $10.5. HPHT is around — that is I think available in the public domain. Including transportation, it should go-around $11, which has $1 per MMBtu transportation and around $10.25 or so as a basic rate.
Unidentified Participant
Yeah. And that’s rent one.
Unidentified Speaker
Sorry to interrupt you, Mr. Rent is an old contract and that is around 7.5% inclusive of transportation as far as we are concerned.
Unidentified Participant
Okay, thank you.
Operator
Thank you. The next question is from the line of Sabri Hazarika from Emkay Global Financial Services. Please go-ahead.
Sabri Hazarika
Yeah. So sir, two questions. Firstly, your volume breakup between GA1, GA2 and GA3 and the outlook for GA3. I mean, last-time you mentioned 0.6 to-1 mms CMD sort of like potential. So any revision on that?
Rajesh Patel
So as of now, for nine months average, I will give you GA1, we have sold around 1.92 MMS CMD. GA2 is around 1.85 mmscm, 2.45.245 is GA3, that makes total sale of around 4 million per for this nine months average, okay. If you look at the growth in GA3, last year average was around 0.163 and we are today at 0.245, which is a growth of almost 49% 50% over the last year average. So that is a growth in GA3. If you consider GA1 and GA2, GA2 is double-digit and GA1 is in the normal range of 4% to 5%.
Sabri Hazarika
Okay, sure. And a small question. In terms of KG basis, what was the CNG volumes in Q3?
Unidentified Speaker
CNG in terms of KG average for the nine months. For the Q3, it is 2.14 kgs.
Sabri Hazarika
2.14 million, 2.1 per day, right?
Unidentified Speaker
Yes, yes, per day per day. Per day per day. Okay. And in terms of SCM, it is 2.92.8.
Sabri Hazarika
Fair enough. Thank you so much and all the best here. Thank you.
Operator
Thank you. The next question is from the line of from Citigroup. Please go-ahead.
Saurabh Handa
Yeah, thank you for the opportunity. Sir, on your question on your comments on the number of CVs in Mumbai, say, around 4 lakhs and currently the penetration is 10%. Hypothetically, if a similar sort of directive comes as we saw in Delhi, could this number go up to like 25% 50% that about. I mean just to get a sense of what is the realistic penetration one can assume if you have similar directives as we’ve seen in Delhi in the past.
Unidentified Speaker
Yeah, you are right. I mean the increase will happen in commercial first because as happened in NCR, the commercial vehicles are first generally the first vehicles which gets impacted because of court or the policy intervention. So in case that happens, so our penetration will go up because we have certain depos in BEST also, which we have opened on an experimental basis for commercial vehicles. So we can open further outlets also in our BST captive outlets for booking for the commercial vehicles. Further, we are increasing infrastructure and particularly in GA2 and GAC for keeping in mind the commercial vehicle increase and GA1 also, we expect that we will do some management to create more infrastructure for the commercial vehicles. Yes, the penetration can increase in coming few years.
Unidentified Speaker
Sorov, if you look at current 3/4 penetration, we have added more than 1% of the existing population is because roughly 4,600 odd commercial vehicles are added in these 3/4 put together, which is more than 1% of the total population in our GAs. And with the high code order, if that gets a little push also, I think we expect that the numbers could be high, but to give a — a penetration of exact percentage is very difficult as of today.
Saurabh Handa
And sir, what is the usage per vehicle for say, typical commercial vehicle?
Rajesh Patel
So it varies for different commercial vehicles. If I talk about heavy commercial vehicles. So usage is about 30 kgs per day. This is on an average basis. So LCV is about 25 and small commercial vehicles consume about 7.5 KGs, you know on a daily basis.
Saurabh Handa
Okay. That’s very useful, sir. Thank you so much.
Operator
Thank you. The next question is from the line of Vikash Jain from CLSA. Please go-ahead, please hi.
Vikash Kumar Jain
Hi, thanks for taking my question. I just wanted to understand currently of about 50 of gas that ONGC is producing, I think about six has been taken away as new well gas. Of the remaining which are there, which is there, roughly how much is being allocated to priority sector and city gas? And that’s question — that’s the first part of the question. Second thing is when you see a change in allocation again on 1st of April, maybe another 5%, 6% will again go away, say, about 2 to 3 mms. Is there a — is there a chance that LPG or some other sector you see could get — could be the — could bear the impact and could bear the impact more than city gas? So that’s something which I wanted to know. Thank you.
Unidentified Speaker
I think the numbers will be better available with GAIL is around 19 was coming to CGD, which got reduced to 16 in the first cut and it went down by another 2 MMSCMD in the second cut. Now two-three MMSCMD is restored out of it. So maybe around I’m not wrong, maybe around 15 MMSCMD is coming to CGG sector. And — but overall numbers from ONGC we don’t have proper clarity. Maybe not 50 MM is not MM available as far as we understand. It is lower than that.
Vikash Kumar Jain
And sir, any chance of any other sector getting reduced allocation as compared to city gas?
Unidentified Speaker
I mean, you have to ask this from ministry but yes, I mean if you see some deallocation has happened and now the restatement has happened. There are two things. The isolated fields, if they get connected to the main grid, then some gas can come to CGD or in case ONGC increases the production of APM, then the gas can be made available to our CGDs.
The other gas which is going into fertilizer and partly to the power which is on the isolated field or the gas in the Northeast, which cannot come into the main grid. So I mean, I don’t think there is much which can come up besides the fact that some isolated fields get connected to the main grid or ONGC increases the production. I don’t think fertilizer, which is already giving a lot of subsidiaries on the government side, will be taken out from the allocation?
Vikash Kumar Jain
And any chance of maybe some kind of a swap that although those isolated fields and those customers get to NGC gas, but they are charged a higher price and effective swap that you or effectively if we do that, then those become unpieable is that risk.
Ashu Shinghal
I think government is already seized of this matter. Is and Mr Petroleum is already seized of it. There are actual limitations of doing the swap also because the physical customer should be able to take at that price — at the increased price. There should be customers at that particular isolated area to consume gas physically, then only swap can happen. So the matter is between government and the physical limitation as well as maybe putting up more compasses to link isolated feeds to the main grid, then this mechanism will be able to work.
Vikash Kumar Jain
Thank you, Ashisha. Thank you.
Operator
Thank you. The next question is from the line of Jain from Aquitas Investments. Please go-ahead.
Niharika Jain
Hi, thank you for the opportunity. Sir, my first question is, I think in the call you had mentioned that we would have some impact on ForEx. Now for the ATM gas and all the contracts, are they — is there a hedge for us or all the contracts even including ATM are unhedged for us as far as ForEx is concerned.
Rajesh Patel
See, our dollar exposure because all the gas we purchased locally is dollar-denominated are not hedged, okay, it’s not hedged. And if one wants to hedge for INR transaction. See, only the price are dollar-denominated actual transaction happens in INR. On this RBI to my understanding, which I had checked few years back allows only a forward contract. So there is a spread-off between whether you want to pay upfront forward cost and increase the cost of the consumer or you remain open and see. In the past, remaining open has benefited us, whereas some entities who took forward they had a higher-cost. But yes, today the time is such that we may still evaluate what needs to be done going-forward considering probably expected movement in the forex rates, INR and the dollar.
Niharika Jain
My understanding correct if I say that only the rupee has depreciated by 3% in, say, quarter-four. So my cost directly get impacted by 3%, right?
Unidentified Speaker
So roughly my estimate is, yeah, you are right in that sense, it adds around INR22 to INR25 I say per rupee increase on an overall company basis.
Rajesh Patel
A rough ballpark. But you are right, whatever the foreign-exchange devaluation all happens, that will be reflected in the price because APL price and others are all dollar-denominated.
Unidentified Speaker
Partly we are indirectly hedged because we link our industrial and commercial prices to the alternate fuels, which are also derived from dollar and then price in India. Okay. Okay. And I suppose petrol diesel price are also linked to brand in a way, they also should be linked to forex. So in a way our input as well as output both gets natural — natural hedges there to a very large extent.
Niharika Jain
Okay. And so I assume that a lot of fertilizer plants take shutdown in-quarter four. So do we get more APM allocation if that happens? Fertilizer sector taking a lot of shutdowns.
Unidentified Speaker
That happens, I mean gain does this mechanism of what is the plan for the future or when any plant is going for shutdown or not. So that adjustment they do and do some minor adjustment in the allocation on daily nominated gas quantity. So those are things which we are not to that information. Maybe Gail will be better placed to answer that.
Niharika Jain
Okay, understood. And the last question, I think I missed the part. We said that we are invested in IBC, but when can we see the revenue getting generated from that entity.
Ashu Shinghal
So what phase we expect another 14 months time the plant will start operating our 500 megawatt plant, 14 months from now.
Niharika Jain
Okay, 14 months from now.
Unidentified Speaker
And second phase, another three, four months from that period. That means in one-and-half year time, we should be able to see one gigawatt factory coming online.
Niharika Jain
And do we have contracts in-place or will you be getting the contracts after once it gets started.
Unidentified Speaker
Sufficient time. So we will get contracts once we get more clarity about — come closer to the production, but still — now we are testing the product, the results are very good. So we will — we have not yet finalized the contracts, we will be doing it maybe one year down the line.
Niharika Jain
And just from a very macro perspective, considering that it is a very evolving technology, don’t you feel that it will be a big risk if the prices is crash down because China is known to do that. See the — see, say we see like we can talk about solar modules also, the price has crashed down and it has been crashing down every year. So being internationally linked, won’t it be a risk or are we thinking something on these stand also?
Unidentified Speaker
No, no. We don’t consider it to be a risk. You are right, China has maximum prediction of the battery sales. But again, there is a protection mechanism by the government to such type of pricing mechanism by China in past also we have seen with solar PV cells to promote indigenous PV manufacturing, the government has supported the industry quite a lot. But having said that, we are very much confident that we will be able to source very competitive raw-material, lithium-ion and other projects which are required for battery cell manufacturing.
We have a very strong partner in South Korean partners and we’ve been able to manage the market in terms of whatever be the market pricing mechanism. And government, as we understand is going to protect Indian market to a great extent in terms of duty because we think that moving away from China is a very thing, very much prevalent mechanism by different countries, including India. So we will — we are very confident we will be able to survive different price mechanisms as and when they appear in-market in the battery manufacturing.
Unidentified Speaker
Also, I would like to add one more point here. When you manufacture cells locally and you will get the live user experience, you will be able to manage the life-cycle of the cells and the battery properly when an Indian company talking to the local consumers here, whereas in case of China, when there are problems which cops up at the cell level, the battery pack manufacturer does not have any answer, okay. So there, I think technologically and in terms of performance, an Indian company will have a very, very good upside and edge over the imported cells and that is going to be one of the USP in the project which is done locally here with technology as well as the setup of the plant locally.
Operator
Sorry to interrupt, may I request Mr Jain to please rejoin the queue. We have participants waiting for the turn.
Niharika Jain
Yes, yes.
Operator
Thank you. The next question is from the line of Deevang Patel from Sameeksha Capital. Please go-ahead.
Devang Patel
Sir, if you can please quickly share data points on what is the share of BST buses and three-wheelers in our volume and what is the nine-month growth in each of these two segments?
Rajesh Patel
Could you repeat? So if I have to tell you the customer segment, you know. So Auto Rexha is the three-wheelers which you ask, they are the highest consuming segment. They consume about 34% of the total volumes that we sell. PSD and others put together, I will Call-IT the state transport undertakings, which also includes MSRTC, NMMT and TMT. They are consuming about only 6% of the total volumes that we sell. And just to add to what Mukesh has mentioned is that in three-wheelers, almost 98% is CNG — three-wheelers. As far as BEST is concerned, we have around 2,000 buses of CNG and around 1,000 buses on diesel and EVs put together.
Devang Patel
Sir, and what is the growth in the BST buses? Y-o-Y in Delhi, we’ve seen the number of ENG buses also come down with this panel being set-up, is there a risk to three-wheelers and BST buses volumes?
Rajesh Patel
No, it is the other way around. You are right, BST versus the last few years have come down from 4,000 numbers, which were running on ropes to 3,000 in total. But going-forward, we think that the electric which were expected to be around 2,000 have not come on roads. So if this particular committee will examine the whole thing and give the recommendation to the government for implementation. And in case some uptick is there, then we can see more buses coming on-road and that can include a major portion of CNG also. But we have to see wait-and-watch about how the transport ministry and BST take a call on that. But yes, the overall number of see BST buses have come down, including CNG buses have also come down.
Ashu Shinghal
And just to share the physical numbers, during the quarter, our MSRTC alone has added 142 CNG buses, okay. And BST, TMT and NMT put together has added 37 numbers of buses and the major part is BST. So probably BST because they don’t have enough number of buses to run their routes has started adding some either retrofitted or buses on CNG as well.
Devang Patel
Okay. Sir, and secondly on the — when you said there is 10% penetration in commercial vehicles, these are what tonnage vehicles, these are the 1.5.
Unidentified Speaker
So commercial vehicles, what we consider are 3.5 ton cross vehicle weight onwards, you know. So these goes up to 18 is the latest addition, goes up to 18 tonnes.
Devang Patel
Okay, sir. Thank you so much.
Unidentified Speaker
Thank you.
Operator
Thank you. The next question is from the line of Madhur Rathi from CounterCyclical Investments. Please go-ahead.
Madhur Rathi
Sir, thank you for the opportunity. Sir, I wanted to understand when we source our gas, so if there is a pricing currently considerate for an example like $6 pricing, sir, at what price do we get with all these transmission and intermediaries, how much cost does that add-up in the landed cost for us?
Rajesh Patel
See most of our gas purchase falls in zone and zone 2. Okay now if you look at the tariff for zone 1 it is INR40 per MMBtu. For zone 2, it is INR80 per MMBtu. If minor gas is coming from Zone 3, that is INR108 per MMBtu. And there is a small amount of marketing margin which is being charged on APM gas. Being the aggregator and marketing agency for the domestically produced gas, okay?
Madhur Rathi
And sir, the gas which we import of that, what would be the additional transportation as well as.
Unidentified Speaker
So as far as MGR is concerned, I’m buying from X-point to Y points or whatever the pipeline transportation I use, depending on the zone in which from where I’m buying, the rates will be applied. As I said, mostly our gas purchase is within zone 1 and Zone 2 maximum.
Madhur Rathi
Okay. Okay, got it. Sir, my second question was, sir, with this 18 gas reduction every year, so I guess that would increase our cost per SCM that we sell to our customers. So sir, what is like a steady-state margin? So what is the landed cost that you can get over the next one year?
Unidentified Speaker
So around 7% reduction of APMA is expected as per the reports and the recommendation by DGH and Committee. So I mean, it depends what is the LNG prices or the substitute gas of NWG prices of the Indian food basket. HPHT option is also there with us. So we will — and HH option is also there. So we will do a mix of the alternate sources and then determine what will be the selling price of CNG. And also we’ll have a look at petrol and diesel. So margins, as we mentioned, EBITDA per SCM will be in the range of, say, INR9 to INR11 or INR10 to INR12 depending on situation because we want to keep two things in-place.
One that the price disruption doesn’t happen or too much price variation doesn’t happen in CNG or PNG anyway 100% allocation of APM is coming. So we would like to keep prices steady and keep the growth numbers also in-line of sight. So having said these things, we will take a call on when to — what is the right time for increase or decrease of CNG prices as well as maintaining our portfolio because right now, we are not exposed to spot prices variation. So that way we are much more protected and the signals and the policy initiatives are coming that whatever APM is getting DLO kicked will be sold at NWG prices to CGD entities. So we have a clarity on what will be the deallocation and what will be the price impact, how much we can absorb or how much we can pass-on, keeping the margins and the growth numbers in-place.
Madhur Rathi
So just a final question from my side. Sir, with this EV economics getting better, so the life of — over the life of EV is getting more attractive than CNG and yet I think that increasing gas cost currently sir it is even more attractive. So how do we tackle this issue? And can this lead to consumers shipping from petrol diesel to directly move into a GV than just moving from their petrol diesel to CNG?
Rajesh Patel
I think it is not as simple as what you have mentioned. The total cost of ownership depends on several factors. One is the main cost of differential between EV and CNG and petrol diesel vehicle. The first time purchase cost. The EV is costliest, followed by there is marginal difference between CNG and petrol or CNG and diesel. And third, second is what is the electricity tariff you have to pay for charging of the EV and the petrol prices or diesel prices vis-a-vis CNG prices. So when we have seen the total cost of ownership in certain segments, the total cost of ownership like in the case of buses, we found CNG is cheaper than EVs. But for small vehicles, yes, EV can be cheaper than CNG.
In pollution also, if you see like CNG is its total cost, life-cycle cost of CNG pollution vis-a-vis the mix of what is being produced in India, the coal-based electricity, the impact on CO2 is also not much different from CNG vis-a-vis EV with the current mix of electricity generation. So we find that going-forward, depending on the electricity tariff, we will be either in some segments cheaper than EVs or some segment slightly costlier than EVs. But having said that, there is sufficient room in many segments where the per-capita consumption of CNG is very-high as we were talking about commercial segment, 10% penetration is there.
So that means 90% vehicles are still to be captured by CNG, which is currently running mostly on diesel. So that segment more than compensate for whatever small segment is lost to EVs. Like if three-wheelers goes to EV, we can more than compensate it to the commercial vehicles, which can come on CNG as compared to diesel. So as far as CGD entities and in particular, MGL is concerned, we are — we don’t find that AVs is going to be very big threat for the whole company.
Operator
Thank you. The next question is from the line of Hardik Solanki from ICICI Securities. Please go-ahead.
Hardik Solanki
Yeah. Sir, just want if you look at the effective tax-rate for the quarter, it has reduced below 20%. So is there any specific reason behind that?
Rajesh Patel
Your observation correct, we have had an assessment of the past year tax returns and we have got some refund which we have accounted and that is the reason effective tax-rate has come down marginally.
Hardik Solanki
Yes. Okay. And sir, can you just break-down the volume between industrial and commercial for this quarter versus the last quarter and how was the margin between these two segment?
Rajesh Patel
So the industry for this quarter is around 0.5 million, rest is commercial, okay. And as earlier we said, margin in case of commercial A and other commercial category is higher than industry, okay. But all these depends on the alternate fuel prices. So if you look at current industrial margins compared to the last quarter because of the LSHS and LDO prices going down has gone down slightly, whereas in case of commercial where most of the customers are linked to commercial LPG 19 kg where prices have slightly gone up, the margin is better. But this position keep on changing. So it’s not a static or one-time position which will remain. So depending on the alternate fuels, price realization will be changing in both these categories.
Hardik Solanki
Yeah. Sir, just a follow-up on this. If you look at the current the fall in crude prices and with the fuel oil getting at much discounted prices. So how do — how are we seeing the impact in this quarter? Have you seen any impact in this quarter and how do we see in upcoming quarters?
Rajesh Patel
And if you see impact on the industry, yes, there was an impact in the current quarter in the realization of — as I already said that because there was a reduction in the LDO and FO prices compared to the last quarter, okay. So I think ideally all these are linked to Brent in a way. So if the brand goes down or up, both will change. If you have to give a view, maybe brand looks softer now for some time going ahead. So there could be reduction in those realizations. Also my industrial volumes or industrial realization has gone down because the new customers which we are adding, we offer them committed discount of 10% for three years, okay. And my addition in the volume has happened a large. So on a weighted-average basis, realization has gone down. It is not only because of the fuel, but average realization is down because of the large addition of the new customers and the increase in volume.
Ashu Shinghal
So just to add to what Rajesh mentioned is that LNG market is also expected to be slightly surplus in next two, three years. So since LNG is being supplied to industries and commercial, so we think that we will be in a better position to maintain the margins or improve the margins because, I mean, most of the analysts and research, if we read, food is expected to be slightly more costlier as compared to LNG prices, which is expected to be slightly more surplus. So in that maybe one, two years or three years’ time, we will see that we will be able to maintain these margins or improve these margins. Okay. Okay, sir. That’s helpful. Thank you. Thank you.
Operator
Thank you. Ladies and gentlemen, due to time constraints, that was the last question for today. I now hand the conference over to the management for closing comments.
Ashu Shinghal
Thank you so much, all the investors and earnings calls and analysts who have joined on this call. We look-forward to your continued support and confidence in the company. Thank you so much for joining in.
Unidentified Speaker
Thank you.
Unidentified Speaker
Thank you.
Operator
Thank you. On behalf of Antique Stock Broking Limited, that concludes this conference. Thank you for joining us and you may now disconnect your lines. Thank you.