Mahanagar Gas Ltd - a natural monopoly

The transformation from liquid to gas economy is quite obvious but burning fossil fuel wont make any difference , So ethanol to CBG with the twist of hydrogen is future for sure, transportation of gas through pipe line through out country is future & economical as well , this is a time taking theme but huge opportunity , company controlling pipeline network with large CBG production unit can generate huge cash flow in longer period of time , any view on this

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Going by EV battery life, one can expect a max 7 years expectancy. The cost of replacing an EV battery at today’s price is half the cost of your vehicle.
let’s say after owning an EV you save X amount of money on petrol cost in 7 years, an average car owner can never cover up the savings cost compared to battery cost.
Now he has a Hobsons choice to sell his EV or replace his battery.
Compare this to a CNG car after 7 years, Guess Maruti will have the last laugh.

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Not sure what is CBG;

Ethanol has its own issues (food v/s fuel etc.) so I see it continuing to be used as a blend for traditional liquid fuels at best.

Hydrogen is a ways away on multiple fronts - https://www.iea.org/reports/hydrogen; and I believe the infrastructure for CNG / PNG is not transferrable to Hydrogen (could be wrong - not an expert on the subject)

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there is huge premium here in delhi for cng kits almost close to 10000 rs over the mrp due to huge demand ,once the elections are over ,cost of fuel is likely to rise,as crude is trading at record high valutions leading to more and more cars going the cng route.

2 cars in my joint family are now cng compared to zero for the past many years.

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Can you explain why margins have fallen so much from 36% to 10% , i was hoping them to pass the cost to consumers,this is lowest i have seen and is a cause for concern as i don’t see natural gas prices droping in the near future.

Wait for next 2 qtrs, margins shall be again at around 25% to 35%. We expect prices to rise after elections. Current margins are at its all time low. Guj Gas and MGL both are at attractive valuations.

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Results were declared a day earlier. Gas Prices have an impacted, hope this will normalize over next quarters.

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Maruti wagon R comes with CNG variant @ 34 Kms/kg, perfect for city car aggregators

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A customer review of MGL


Disclosure: Not invested.

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If I am correct, Mr. Jiten Parmar is a resident of Pune. Piped gas in Pune is provided by Maharashtra Natural Gas Limited (MNGL) a joint venture between GAIL India and Bharat Petroleum. Mahanagar Gas (MGL) has nothing to do with Pune.

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I think @jitenp bhai would be the best person to clear the confusion.

yes. wrong tag by me. sorry for the confusion.

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Excellent results margins have not recovered but top-line has increased by 140% YoY from 615 cr to 1455 cr while cng price only rose by 50 % YoY from 49.4 rs in Apr 2021 to now 76 rs in june 2022.This clearly tells many people have switched to cng.

Despite Margins falling to half the company has maintained a almost similar bottomline ,going forward i am pretty sure once natural gas price stablize and company is able to maintain similar margins of 40% plus ,I won’t be surprised if stock get re-rates as just like ciagrettes a customer who has once switched to cng would never go back to petrol as ussaly it is 5 times cheaper even in current market 2.5 times cheaper to run a cng car compared to a petrol car.This covid specially in delhi i see a lot of freinds and family who have switched to cng and it is not rare to see some 15-20 lakh suv standing in cng cues .It takes 15 to 20 min to fill gas in station and all the negative stigma which was there in the past with cng not safe and considered cheap it is now being considered a smarter choice .Moreover i don’t see electric cars replacing ice cars specially for the mass market indian cars considering battery replacement cost and our infra structure .

Disc :invested and enjoying 3 plus% divdend yeild

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Read the entire con-call, will be exiting the stock tomorrow

Reason being

A good question raised by Citigroup that gas prices might rise in october and will make cng prices in 100 rs in october which might lead to further margin reductions and might get me another chance to enter the stock again

Will pick IGL over MGL this time due to higher cagr and better market expansion points availbale to IGL while trading at same pe multiples

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Rate cut is today due to higher supply from Gov… CNG by 6 rs / kg and PNG 4 rs / scm