We formed Mahanagar LNG Private Limited (MLPL), a joint venture with a
51% equity stake, which marks a significant step towards establishing an LNG supply-side
ecosystem.
Dear Shareholders,
I am pleased to present the Annual Report for Mahanagar Gas Limited
(MGL) for the financial year 2023-24. This year has been a pivotal one, marked by
exceptional growth, strategic expansion, and a continued commitment to building a
sustainable future for all.
Today, MGL stands at a crucial point of a transformative era in
India's energy landscape. The nation's burgeoning economy and expanding
population have ignited a surge in energy demand. India's growing stature as a global
economic powerhouse is also intricately linked with its energy consumption. As the
world's third-largest energy consumer, India's energy demand is projected to
rise significantly in the coming years. This presents a tremendous opportunity for MGL, as
natural gas is poised to play a dominant role in fuelling this growth. Clean and
efficient, natural gas offers a compelling alternative to traditional fuels, aligning
perfectly with India's environmental and economic aspirations.
A Legacy of Leadership and a Vision for the Future
As the authorised distributor of CNG and PNG in Mumbai, Urban Thane and
Raigad district (Geographical Area's or GA) for over 25 years, MGL has a proven track
record of consistent growth. Your Company's extensive network of ~7,000 Kms of
pipeline and 347 CNG stations portrays its commitment to infrastructure development and
accessibility. MGL's vast infrastructure, coupled with a strong safety management
system, ensures the safe, reliable, and uninterrupted distribution of natural gas to its
ever-growing customer base.
Performance Highlights
FY 2023-24 has been a year of significant achievements for your
Company. We have made exceptional progress in expanding our Domestic PNG (D-PNG)
connection base. Together with our 100% subsidiary, Unison Enviro Pvt Ltd (UEPL), we have
connected a staggering 3,30,330 homes to provide clean and convenient PNG, highest ever by
any
CGD in the country. We along with UEPL also added 43 new CNG stations
& upgraded 45 CNG stations ensuring easy availability of CNG for almost one million
CNG vehicles plying in our GA's.
Our gas sales volume has also seen a steady rise across all segments.
The average daily sales volume for the year ended March 31st, 2024, stood at
3.61 mmscmd, with CNG contributing the most at 2.59 mmscmd. We have achieved growth of ~4%
in CNG sales volume compared to the previous year. D-PNG sales volume has also seen an
increase of ~8%, reaching 0.52 mmscmd. The industrial and commercial segment witnessed a
commendable growth of ~11%, with sales volume reaching 0.50 mmscmd. These achievements
help solidify your Company's position as a leading player in CGD sector.
Financially, the year has been equally impressive. We have witnessed a
robust growth of 56% in our EBITDA, reaching RS. 1,843 Cr. compared to the previous
year's RS. 1,184 Cr. This strong performance led to 63% increase in net
profit, reaching RS. 1,289 Cr. for FY 2023-24, the highest ever.
Building a Sustainable Future
We, at MGL are actively pursuing strategic acquisitions to solidify
your Company's position within our core business. The acquisition of UEPL expands our
service offerings and strengthens our customer base. The strategic move involved acquiring
100% of UEPL for RS. 562 Cr. Not only does it strengthen your Company's presence in
CGD Sector, but also aligns perfectly with government's plan to increase share of
natural gas in the energy mix to 15% by 2030. Through UEPL acquisition, we gain access to
new territories viz. Ratnagiri, Latur, Osmanabad in Maharashtra and Chitradurga &
Davanagere in Karnataka. This expansion allows us to broaden the customer base and
network, derive synergies, positioning us to take advantage of the burgeoning CGD sector
in India.
The Company also formed Mahanagar LNG Private Limited (MLPL), a joint
venture with a 51% equity stake, which marks a significant step towards establishing LNG
as a preferred fuel for Heavy duty trucking in the long haul & close loop segment. MGL
is already operating its 1st LNG station at Savroli since August 2023.
MLPL's construction of LNG stations within Maharashtra is underway, positioning MGL
&
MLPL to capitalise on expected growth in LNG for heavy duty trucking,
substituting diesel.
Your Company's investment in 3EV Industries Private Limited (3EV),
a manufacturer of electric three-wheeler cargo and passenger vehicles, positions it as an
entity committed to a cleaner and more sustainable future. These 3W EV's are expected
to replace mostly Diesel & Petrol fuelled small commercial vehicles. We are pushing
innovation in the electric vehicle space, and we are actively contributing to the
reduction of greenhouse gas emissions and the promotion of environmentally friendly
transportation options.
On our trajectory to build a sustainable future, we have signed a
Memorandum of Understanding (MoU) with the Municipal Corporation of Greater Mumbai (MCGM)
to establish a Compressed Biogas (CBG) plant within Mumbai. This initiative holds the
potential to significantly reduce urban pollution as well as arrest the growing menace of
landfill mountains. It will also add to MGL's portfolio "Renewable Natural
Gas".
Investing in the Future
MGL's growth strategy is focused on capitalising on India's
underpenetrated CGD market. We plan to achieve this through a multi-pronged approach.
Primarily, we will leverage your Company's expertise in Go-to-Market strategies to
drive conversions across segments, from domestic to commercial to industrial. The ongoing
digitisation efforts will enhance the customer experience, improve operational efficiency,
and allow for the creation of loyalty programs. We will also pursue inorganic CGD
expansion opportunities to broaden our geographic reach. We remain committed to securing
cost-effective and reliable gas sources through a mix of APM allocations, term contracts,
and spot purchases.
Your Company's locus of operation is expanding as is evident by
its increasing penetration within the existing markets, particularly in the Raigad
district as well as GAs of recently acquired M/s. UEPL. This strategy is fuelled by the
growing population and the increasing demand of PNG due to safety, convenience and lower
carbon footprint. We also aim to expand CNG and PNG customer base by promoting the
adoption of CNG vehicles and developing LNG stations to cater to long-haul vehicles. To
support this growth, MGL plans to invest significantly in network expansion by adding over
180 Kms of steel pipeline, 1,000 Kms of PE pipeline and 200 CNG filling stations in the
coming years.
Safety First
Safety is your Company's paramount concern. We operate under the
guiding principle of "Zero Injuries", a philosophy that underscores the
commitment to preventing accidents and ensuring the well-being of our workforce.
MGL's comprehensive training programs and ongoing safety initiatives cultivate a
culture where everyone embraces responsibility for a safe working environment. We adhere
to the highest international safety standards and empower all employees to actively
identify unsafe situations and work towards mitigating them. By prioritising safety and
well-being, we are not only building a stronger company but also contributing to a more
sustainable future for all.
"WE CARE"
MGL recognises the importance of giving back to society. Your
Company's CSR initiatives, encapsulated under the umbrella of "WE CARE"
encompass a broad range of programs designed to create a more sustainable and equitable
future. These programs span various thematic areas viz. healthcare (MGL AAROGYA), rural
development (MGL VIKAS), women's empowerment (MGL SAKSHAM), education (MGL VIDYA),
environmental protection (MGL HARIYALI), skill development (MGL HUNAR), and community
support (MGL SAATHI).
Through these initiatives, we are actively engaged in improving the
lives in the communities where we operate. MGL's CSR efforts extend beyond Mumbai
covering Navi Mumbai, Urban Thane, and the Raigad district of Maharashtra, creating a
positive and lasting impact on a wider population.
Building a Brighter Future Together
On behalf of the entire MGL team, I express my sincere gratitude to the
dedicated employees, shareholders, customers, and partners for their unwavering support.
We are committed to keeping you informed of your Company's progress in unlocking the
next phase of growth.
Regards,
Sandeep Kumar Gupta
Chairman