This article first appeared on GuruFocus .
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Revenue:Highest ever quarterly turnover of more than INR 5,000 crores, up 16% compared to the same quarter last year.
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EBITDA:INR 296 crores for the quarter.
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Net Income (Profit After Tax):INR 18 crores for the quarter.
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Sales Volume:Average main gas sales volume of 9.66 million cubic meters per day, up from 9.13 million in Q1 of the previous year.
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CNG Sales Volume:Increased by around 11% (net of BPC and DIMMS), with a 9% increase in Delhi NCR (excluding DTC and IMS) and a 27% growth in areas outside Delhi NCR.
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Overall Sales Volume Growth:Increased by about 6% compared to the last quarter of the last year.
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Capital Expenditure:INR 327 crores incurred during the quarter.
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Infrastructure:Steel network expanded by approximately 25 kilometers to around 2,600 kilometers; MDP pipeline increased by almost 500 kilometers.
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Customer Base:Domestic PNG connections reached around 35 lakh plus, with industrial and commercial connections at approximately 13,600; added over 1 lakh PNG customers and 530-plus industrial and commercial customers during the quarter.
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CNG Vehicle Additions:Average of 27,300 vehicles per month added or converted over the last 6 months, compared to 18,000 vehicles per month in the same quarter last year.
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Release Date: August 14, 2026
For the complete transcript of the earnings call, please refer to the full earnings call transcript .
Positive Points
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Achieved highest-ever quarterly turnover of over INR 5,000 crores, up 16% year-over-year.
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CNG sales volume grew 11% (excluding DTC and DIMTS), with a record single-day peak of 5.8 million kg.
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Domestic PNG customer base expanded to over 35 lakh connections, adding 1 lakh+ in the quarter.
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Newer geographical areas (outside Delhi NCR) saw strong CNG growth of 27%, contributing to overall volume growth.
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Commissioned new infrastructure, including a city gate station in Delhi, LNG operations in NCR, and a CNG station at Narda International Airport.
Negative Points
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Profitability was significantly impacted by higher gas costs due to geopolitical tensions in West Asia, with EBITDA at INR 296 crores and PAT at only INR 18 crores.
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Gas sourcing mix remains heavily reliant on imported gas (52%), with spot purchases at volatile prices ($17-$22/mmBtu).
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DTC bus volumes have dropped to near zero, eliminating a previously significant revenue stream.
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Delhi EV policy mandates no new registrations for three-wheelers and commercial vehicles, potentially reducing CNG volumes by 2-3% by 2030.
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Management refrained from providing near-term margin guidance due to unpredictable geopolitical and supply conditions, indicating continued uncertainty.
Q & A Highlights
Q: Can you provide the gas sourcing mix for Q1 FY27, including the breakdown between domestic and imported sources, and the share of long-term versus spot LNG? A: Mohit Bhatia, Director - Commercial, stated that approximately 48% of gas came from domestic sources (APM, Newell, or HPHT), while 52% was imported. Of the imported volume, around 3.9-4.0 mmscmd came from long-term contracts, 0.6-0.7 mmscmd from government-provided pool gas, and only about 3% (0.25 mmscmd) was sourced from the spot market. Spot prices varied from $17-18 to $21-22 during the quarter.
Q: Given the sharp gas cost spike and geopolitical uncertainty, what is the margin outlook and the company's long-term EBITDA guidance? A: Mohit Bhatia reiterated the long-term EBITDA guidance of around Rs. 7 per SCM, but acknowledged that margins are under stress due to the geopolitical situation and it will be difficult to achieve this in the immediate subsequent quarters. Kumar Shanker, Managing Director, added that the company is focusing on maintaining a healthy delta with alternate fuels like petrol and diesel, noting a current delta of around Rs. 17 with petrol, which remains favorable for CNG demand.
Q: What is the impact of the new Delhi EV policy on CNG volumes, particularly regarding auto-rickshaws and commercial vehicles? A: Mohit Bhatia explained that the policy mandates no new three-wheeler registrations from January 2027, but the impact will be limited. With only ~1 lakh autos in Delhi and a 15-year phasing out period, the impact on overall CNG volumes is estimated at less than 1% in 2027 and less than 3% by 2030. For commercial vehicles and school buses, the impact is also expected to be around 2-3% by 2030, which will be offset by strong growth in the passenger car segment.
Q: Can you provide the volume growth details for the subsidiaries MNGL and CUGL? A: Kumar Shanker reported that CUGL clocked 8% CNG growth (from 0.23 to 0.25 mmscmd) and maintained similar PNG volumes, resulting in 6% overall growth to 0.36 mmscmd. MNGL showed stronger performance with 13% CNG growth (1.27 to 1.44 mmscmd) and 29% PNG growth (0.58 to 0.75 mmscmd), leading to 18% overall growth to 2.19 mmscmd, driven by the newly commissioned pipeline supplying the Nashik GA directly.
Q: Is the company considering hedging or long-term contracting strategies to reduce spot LNG exposure? A: Kumar Shanker confirmed that the company is actively looking at hedging options, particularly using Henry Hub as a tool, and has already started hedging in May when reasonable price bands were available. This is part of the overall strategy to manage the volatile energy market and reduce reliance on spot purchases.
Q: Can you provide a breakup of CNG sales by vehicle segment? A: Mohit Bhatia provided the following breakdown: buses account for ~12%, commercial vehicles ~19%, taxis ~14%, three-wheelers/autos ~7-8%, and passenger cars dominate at ~48-50% of total CNG sales. He also clarified that the auto segment is primarily concentrated in Delhi (70-80% of that segment).
Q: What is the status of the Gurugram and Faridabad authorization disputes, and has the company changed its strategy? A: Mohit Bhatia explained that while litigation is ongoing, the company has made a conscious decision to conditionally accept and develop the part of Gurugram that was authorized to IGL but previously not developed due to the dispute. This is to avoid depriving consumers of natural gas. Kumar Shanker added that even in disputed areas where another party operates, IGL still supplies the bulk of the gas molecules.
Q: What is the CapEx guidance for FY27, and is there a step-change increase due to the focus on PNG infrastructure? A: Mohit Bhatia stated that Q1 CapEx was Rs. 327 crores. The annual plan remains around Rs. 1,800-2,000 crores, with approximately Rs. 1,200-1,500 crores allocated for core CGD business and an additional Rs. 500-600 crores reserved for business development and diversification opportunities.
Q: What was the average gas cost in Q1 FY27, and how is it trending in July? A: Mohit Bhatia indicated that the average gas cost was around Rs. 40-45 per SCM in Q1. He noted that July has seen continued turbulence with some increase in costs, but declined to provide specific figures due to commercial sensitivities.
Q: Is there any indication that natural gas will be brought under the GST regime, as recommended by a PNGRB report? A: Kumar Shanker noted that the Ministry of Petroleum and Natural Gas has consistently supported this cause, which is a positive sign. However, since GST is a dual-control subject involving both central and state governments, he stated it is very difficult to predict any outcome, and there is no available evidence to suggest a big change is imminent.
For the complete transcript of the earnings call, please refer to the full earnings call transcript .
