Mahanagar Gas plans to spend Rs 1,000 crore in the FY26 as capex compared with Rs 800 crore in the current financial year. In an interview, it’s managing director Ashu Shinghal tells Raghavendra Kamath about the company’s plans and strategy.
You plan to acquire renewable energy assets. Could you elaborate on the specific types of assets you are targeting, their expected ticket size, and other relevant details?
We primarily aim to acquire solar assets in the range of Rs 100 crore to Rs 150 crore. The acquisition will be funded through our balance sheet, utilising internal accruals without raising any debt.
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You have ambitious CNG plans. Could you share more details?
CNG contributes nearly 75% of our topline. We are adding new CNG stations. We have 410 stations and in FY25, we added 85 stations. In FY26, we will add 80 stations. We have a capex plan of Rs 1000 crore, that will go for domestic PNG, building pipelines, CNG stations, and the balance will go for operational capex.
Analysts suggest a Rs 3-4/kg CNG price hike to restore margins. What’s your take on this?
We raised prices by Rs 2 in November and Rs 1 in December. We are now at par and don’t need further hikes.
The company expects double-digit annual volume growth. What will drive this growth?
Commercial and industrial (C&I) will drive 14-15% volume growth, while CNG will contribute 10%. For nine months of FY25, growth was 11%, with an expected 1-2% in Q4, leading to 12-13% for the full year.
Why are you bullish on the C&I segment?
We are expanding into new geographies, offering flexible contracts, and ensuring competitive pricing against alternative fuels like furnace oil.
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What are your other plans in the energy segment?
We have this joint venture with IBC where we own 40% and the rest by them. This company is setting up a 1GW battery cell manufacturing plant where civil work has been started. It will be operational in 14 to 15 months.. We also have a JV with Baidyanath LNG for LNG retail outlets.
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