Global economic overview1
Despite a tumultuous 2023, the world economy demonstrated resilience and maintained a steady pace as inflation gradually returned to the target levels. With the reported year recording supply-chain disruptions, the Ukraine-Russia war leading to a worldwide food and energy crisis, an inflation spike and the tightening of monetary policies, the global economy navigated various challenges in Calendar Year (CY) 2023. Global growth, estimated at 3.2 percent in CY 2023, is projected to continue at the same pace in CY 2024, reinforcing cautious optimism that the steady recovery will persist amidst ongoing global uncertainties.
As major developing economies sustained the headwinds, the global economy avoided the predicament of a recession. According to the International Monetary Fund (IMF), most indicators for global growth are pointing towards a soft landing.
The markets responded positively to the prospect of central banks easing the tight monetary policies. Financial conditions improved, equity values surged and capital flows poured into most emerging market economies, aside from China. Certain low-income nations and frontier economies reclaimed their position in the market.
Outlook
While emerging market and developing economies (EMDE) are expected to record a slight downturn from 4.3% in 2023 to 4.2% in botRs. 2024 and 2025, advanced economies will experience growth, increasing from 1.6% in 2023 to 1.7% in 2024 and 1.8% in 2025. Looking five years ahead, the predicted 3.2% growth rate for the world economy is the lowest in decades. Global inflation is expected to decline at a normal rate from 6.8% in 2023 to 5.9% in 2024 and 4.5% in 2025, with advanced economies reaching their target inflation rates faster than developing economies.
Indian economic overview2
In FY24, the Indian economy recorded a robust 8.2% growth rate of real gross domestic product (GDP), supported by strong domestic consumption and effective governmental investments, mitigating the effects of trade deficit. The Monetary Policy Committee (MPC) has mentioned that the Gross Value Added (GVA) on the supply side increased by 6.9% in FY 2023-24, facilitated by buoyant manufacturing and construction activities.
The ability of the Indian economy to withstand global economic downturn can be attributed to substantial consumer and government expenditure, a robust services sector, expanded manufacturing witnessing a growth of 11.6% YoY and six central bank rate hikes since 2022. The Indian government aims to increase infrastructure spending and attract investment from international businesses, especially in technology production, as world seeks alternatives to China.
Outlook3
The Asian Development Bank (ADB) estimates Indias gross domestic product (GDP) growth for 2024–25 (FY25) to be 7%, catalysed by robust development in the services sector and increased public and private investments.
The main threats to Indias economy include unforeseen global shocks, such as adverse weather conditions affecting agricultural output and supply shocks to the crude oil markets. However, Indias strategic positions and proactive approach positions the country for future growth.
Industry overview
Indian oil and gas industry4
India is the worlds fourth-largest Liquefied Natural Gas (LNG) consumer, after South Korea, China and Japan. With the governments relentless pursuit to promote environmental sustainability, it is expected that LNG consumption will continue to increase with the growing demand for natural gas.
The GOI intends to raise natural gass share in Indias energy mix from the present 7.6% to 15% by 2030. Currently, local production accounts for about half of Indias natural gas supply, while the remaining comes from LNG imports. With increasing LNG demand, analysts predict that by 2025, the LNG may contribute to 70% of NG consumption and rest 30% will be domestics supplies.
India expanded its overseas supplier base of crude Petroleum, Oils and Lubricants (POL) products, anticipating future demand and forged long-term supplier arrangements with nations such as the US and Russia.
Natural Gas Consumption (including internal consumption)
| MONTH | APRIL - | MAY - | JUNE - | JULY - | AUG - | SEP - | OCT - | NOV - | DEC - | JAN - | FEB - | MAR - | TOTAL |
| 2023 | 2023 | 2023 | 2023 | 2023 | 2023 | 2023 | 2023 | 2023 | 2024 | 2024 | 2024 | ||
| Net Production | 2,671 | 2,838 | 2,844 | 3,063 | 3,111 | 2,976 | 3,111 | 2,991 | 3,078 | 3,074 | 2,887 | 3,072 | 3,5717 |
| LNG import | 2,514 | 2,854 | 2,380 | 2,355 | 2,729 | 2,584 | 2,653 | 2,416 | 2,557 | 2,831 | 2,522 | 2,522 | 3,0917 |
| Total | |||||||||||||
| 5,185 | 5,692 | 5,224 | 5,418 | 5,841 | 5,560 | 5,764 | 5,408 | 5,635 | 5,905 | 5,409 | 5,594 | 66,634 | |
| Consumption |
Indias energy basket
As per the latest Energy Statistics report 2024, there has been a notable shift in the energy demand from non-renewable to renewable sources. Despite the renewable segment gaining share in the basket, the non-renewable sector continues to dominate, with the energy sector being the largest consumer of raw coal and lignite in India. India is projected to rely on coal to meet the rising electricity demand througRs. 2026. Coal-fired generations is expected to meet 68% of Indias electricity demand by 2026, Renewable energy (RE) generation remained relatively stable with a 23% share of electricity generation in 2023-24. The rise in solar and wind was largely offset by reduced hydropower output. Close to 18.48 gigawatts (GW) of RE capacity was added during 2023-24, with RE accounting for nearly 44% of total installed capacity in 2024.
Indias electricity demand surged by 7% in 2023, driven by rapid economic growth and increased space cooling needs. The demand is further anticipated to grow by 6.5%, on an average, until 2026.
Crude Oil, LNG and Petroleum Products at a glance
| Sr. No. Details | Unit/Base | 2021-22 | 2022-23 | 2023-24 |
| 1 Crude oil production in India | MMT | 29.7 | 29.2 | 29.4 |
| 2 Consumption of petroleum products | MMT | 201.7 | 223.0 | 234.3 |
| 3 Production of petroleum products | MMT | 254.3 | 266.5 | 276.1 |
| 4 Gross natural gas production | MMSCM | 34,024 | 34,450 | 36,438 |
| 5 Natural gas consumption | MMSCM | 64,159 | 59,969 | 67,512 |
Source: May 2023 & Petroleum Planning & Analysis Cell
Indias city gas distribution network5
Indias gas distribution network supplies natural gas for industrial and commercial use, transportation, and power generation. The Petroleum and Natural Gas Regulatory Board (PNGRB) oversees licensing, establishing tariffs with a vison to create a vibrant energy market with rapid and orderly growth through facilitation of flow of investments into the basic infrastructure for efficient transportation and distribution of petroleum, petroleum products and natural gas & protection of consumer interests through fair trade practices and competition.
The recent reforms in Indias gas distribution infrastructure aim to ensure that people can access affordable and clean energy.
One of the major initiative by GOI, the Pradhan Mantri Urja Ganga project, facilitates the availability of natural gas in the hinterlands, particularly in the eastern and north-eastern region of India.
The Indian government has planned to invest $67 billion in the natural gas sector over the next six years to provide natural gas to end consumers at a stable price. This investment is expected to lead to a three-fold increase in natural gas consumption, from 185 MMSCMD to 500 MMSCMD, by 2030, and promote the development of industries. There are currently 24,623 Kms of natural gas pipelines in operation out of 33,753 Kms authorised.6
There are 308 Geographical Areas (GAs) authorized in the country for the development of City Gas Distribution (CGD) network covering 98% of the population and 88% of its area. The recent 12 and 12A bidding rounds covered more than 100 districts across 8 GAs in North East States and Union Territories.
PNG connections and CNG stations across India (Nos),
| as on 31.03.2024 | |||
| PNG Connections | |||
| CNG Stations | Domestic | Commercial | Industrial |
| 6,861 | 1,29,22,516 | 41,360 | 18,756 |
Source: Petroleum Planning & Analysis Cell
GOI has taken various steps to improve the share of natural gas in the energy basket to 15% by 2030. These, inter-alia, include expansion of National Gas Grid (24,623 Kms operational and 10,860 Kms under construction), expansion of CGD network and setting up of LNG Terminals (current 47.7 MMTPA capacity to 66.7 MMTPA).
Indias import in 2024
With significant restrictions on international maritime trade, India is closely monitoring the Houthi Red Sea conflict. While some flag countries, such as China and Russia, are continuing to sail through the Red Sea, most Western maritime operators are redirecting their vessels via the Cape of Good Hope. India imports gas and oil from the Persian Gulf, Iran, Saudi Arabia, the United Arab Emirates, Qatar and Russia. However, it has major military-economic interest in the free passage in the Suez Canal and Red Sea region & hence it has deployed its Navy in the region recently.
Indias auto fuel
Indias auto fuel consumption has seen significant fluctuations, with petrol and diesel remaining the dominant fuels.
Sustainable Alternative Towards Affordable Transportation (SATAT) aims to establish plants for producing Compressed Biogas (CBG) to be used as an alternate sustainable energy source.
It was estimated that currently, about 98% of the fuel requirement in India for transportation sector is met by fossil fuels and the remaining 2% by biofuels. Blending of ethanol up to 20% with gasoline will lead to savings of around $4 billion foreign exchange. Government has also started an interest subvention scheme for molasses and grain based distilleries to promote ethanol production. It is also foreseen that flex fuel vehicles, which are capable of utilising ethanol blended gasoline up to 85%, and are already operational in the USA and Brazil, are soon to make an entry in India.
As per PPAC, fuel demand for the financial year ending March 31, 2024 reached a record high of 233 million tonnes (4.7 mbpd), up from 223 million tonnes (4.5 mbpd). Diesel sales, primarily used by trucks, buses, and the agriculture sector, increased by 4.4% in the 2023-24 fiscal year compared to the previous year, reflecting higher levels of economic activity in India.
The drop in Compressed Natural Gas (CNG) prices, following the central governments review of new domestic gas pricing guideline 2014, is expected to drive greater adoption of CNG-powered passenger vehicles in India. Along with this, India plans mandatory blending of compressed biogas in domestic CNG and piped natural gas to cut its reliance on expensive imports of LNG. Blending will initially be voluntary for automobiles and households from the April 2024-March2025 fiscal year and become mandatory from 2025-26 as per the oil ministry.
Company overview
Established in 1995, MGL is one of Indias leading City Gas Distribution (CGD) companies. With a rich legacy spanning over nearly three decades, MGL has been instrumental in setting up gas infrastructure and promoting gas usage among various customer segments across the Mumbai Metropolitan region, such as Mumbai, Urban Thane, Mira Bhayandar, Navi Mumbai, Kalyan, Dombivali, Ambernath, Badlapur, Ulhasnagar, Bhiwandi, Panvel, Taloja and Kharghar. In 2015, MGL was entrusted by PNGRB with the responsibility of developing the city gas distribution network in the Raigad district of Maharashtra.
With an increasing awareness about environmental repercussions caused by traditional energy sources, a paradigm shift towards cleaner alternatives is being observed. Both global and Indian energy markets are inclining towards embracing renewables, energy efficiency and carbon reduction, accelerating the demand for cleaner fuels. MGL takes pride in facilitating Indias progression towards a gas-based economy.
The government aims to increase natural gas share in the total energy mix from 7.6% to 15% by 2030. With a commitment towards expanding the gas distribution network and advocating for increased gas usage, MGL has invested RS. 4,800 Cr. since inception, investments to bolster the gas distribution infrastructure. Going forward, MGL plans to add 180 Kms of steel pipeline and 1,000 Kms of PE pipeline over the next five years.
MGL takes pride in having an impeccable track record of safety in project execution and operations in one of Indias most urban and densely populated cities. With focus on the core sector, MGL is steadily increasing its pipeline and its allied infrastructure in D-PNG (Domestic Piped Natural Gas) segment comprising of households who use Natural Gas for domestic cooking purposes & CNG for Transportation.
During FY 2023-24, the Company has laid 433 Kms of (PE and Steel) pipeline, provided 3,20,125 D-PNG connectivity and constructed 36 CNG stations while upgrading capacity of 45 existing CNG stations. The Company has clocked sales of 3.61 MMSCMD through 347 CNG Stations and 2,141 dispensing point, over 16.85 lakhs D-PNG active users and 4,769 Industrial & Commercial (I&C) customers. With a Capex of RS. 802 Cr., the Companys focus remains on fortifying the core business, thereby, enhancing access to eco-friendly fuel solutions to the population in its GA. The steadfast dedication highlights MGLs commitment to fostering sustainable growth and contributing to a cleaner, greener future for all.
Presently, the Company has an extensive network comprising over 600 Kms of steel pipeline and approximately 6,400 Kms of poly-ethylene pipeline.
MGL caters to the diverse needs of its varied customer base across different categories within its operating GA.
1. Automotive segment (CNG) – MGL has ensured easy and reliable availability of CNG by developing a network of 347 CNG stations in its GAs. This has played a crucial role in adoption of CNG as a transportation fuel. Furthermore, the Company has been able to earn consumers trust to promote CNG as an alternative to traditional fuels. Today, more than 9 lakh vehicles are relying on CNG in the Companys operational areas. The neighbourhood transport undertakings (BEST, TMT, MSRTC and NMMT) have 2,346 buses on CNG in their fleet. Also, MGL, MSRTC is actively working with MSRTC to ensure conversion of 700 buses to CNG in the next two years in MGLs GA. The significant contribution of this transition towards mitigating air pollution and improving air quality in Mumbai has proven to be effective for the residents of Mumbai. MGL is committed to expanding the network further by adding 200 CNG stations over the next five years.
2. Domestic Piped Natural Gas (D-PNG) –During the fiscal year, the Company has installed 25 Kms of steel and 408 Kms of PE pipelines, cumulatively installing a total of 433 Kms of pipeline in its GA. Till date, MGL has provided connectivity to more than 24.90 lakh households, making MGL one of the highest D-PNG provider in India. MGL plans to add around 3 lakh households each year to its existing customer base going forward. This has resulted in enhancing sales for D-PNG by ~8%, growing from 0.49 mmscmd to 0.52 mmscmd.
3. Industrial and Commercial – MGL supplies PNG to 4,769 commercial and industrial establishments, including restaurants, hotels (ranging from basic to high-end), healthcare centres (from small nursing homes to large hospitals), and small to medium-sized industries within its operational areas. These establishments have transitioned from solid fuels like coal, pet coke and liquid fuels such as furnace oil and light diesel oil (LDO), to natural gas, resulting in significant emission reduction. While Indias target of net zero by 2070 and 50% energy through renewable demonstrates its focus on reducing carbon footprint; MGL ensures its positive contribution in this journey.
The Companys sales volume, including industrial and commercial, has significantly surged by ~11%, increasing from 0.45 mmscmd to 0.50 mmscd. During the year, we gained 402 new industrial and commercial customers, bringing our total to 4,769 customers.
4. Automotive segment (LNG) - LNG is another gas variant that is especially suitable for Long Haul Trucking. GOI has been aiming to increase the adoption and use of LNG in India. In pursuance of this national objective, MGL had set up its 1st LNG station at Savroli, strategically positioned for truckers just off the Mumbai-Pune expressway. With a vision to enhance LNG infrastructure nationwide, MGL has established a JVC, Mahanagar LNG Pvt Ltd., in partnership with Baidyanath LNG Pvt Ltd.
Mumbai Metropolitan Region: Transition from City of Dreams to the Global Financial Hub
In the Annual report of last FY, the following major infrastructure projects having a substantial upside for MGL were discussed viz:
1. Navi Mumbai International Airport (NMIA)
2. Mumbai Trans harbour Link (Atal Setu)
3. Mumbai Nagpur Samruddhi Expressway
4. Virar Alibaug Multimodal Corridor
The impact of these projects is already felt by MGL in both PNG as well as CNG segments. We are poised to tap every opportunity that these infrastructure projects are creating.
Construction of NMIA is in full swing & its likely to be operationalized in the coming year. Atal setu , Mumbai Trans Harbour Link, connecting Sewri in South Mumbai to Nhava Sheva in MGLs GA3 is a 21.8 Kms 6-lane expressway bridge is in operation since January 2024. Both these projects will give tremendous push to urbanisation, creating 3rd Mumbai in Raigad thereby pushing growth of CNG as well as PNG in MGLs GA3 to an unprecedented levels.
The 700 Kms Mumbai Nagpur Samruddhi Expressway which was opened to traffic between Nagpur & Shirdi in December 2022 is now operational till Igatpuri in the FY 2023-24 and is expected to be fully operational in the FY 2024-25. The Virar-Alibaug Multimodal Corridor, which is a 14-lane expressway is expected to be completed by 2030. The construction will be done in 2 phases. Phase 1 – a 98.5-Kms highway between Navghar and Balavali and Phase 2 – 129.9-Kms highway between Balavali and Alibaug. The project will incorporate various modes of transportation like roads, rail and metro to create an efficient transport network. These two projects will position JNPT & NMIA as logistic hub thereby aiding the growth of both CNG as well as LNG. Your companys CNG growth plans as well as Mahanagar LNG Pvt Ltd (MGLs JV) are in a perfect position to have a first mover advantage to cater to this green mobility opportunity.
In the next two decades or so, MMR region is expected to emerge as one of the largest urban agglomeration in the world creating unprecedented growth in services thereby emerging as economic hub of South Asia.
5. Automotive segment (EV) - In the recent years, the surge in electric vehicles marks a paradigm shift within the automotive sector. MGL has remained abreast of this consumer trend and established its footprints in EV sector by acquiring ~31% stake in 3ev, a three-wheeler electric vehicle (EV) manufacturer.
MGL stands as a trailblazer within the CGD sectors, steadfastly strengthening its core while venturing into adjacent areas having a "Right to Win".
Key business highlights
The reported year has been a year filled with opportunities, challenges and achievements for MGL. Geopolitical instability led to a spike in natural gas prices, negatively affecting the CNG sector, particularly within the commercial market. However, governmental initiatives played a crucial role in mitigating the challenges. The review of domestic gas pricing guideline 2014 by GOI post Kirit Parikh Committee report ensured stability in CNG prices. MGL has utilised this opportunity to bolster the number of CNG stations and improve adoption of CNG-based vehicles.
In the D-PNG business, MGL achieved highest ever connectivity of 3,20,125 households, surpassing the previous number of 3,05,030 households in FY 2022-23. Similarly, it has also achieved the highest ever connectivity number in a single month i.e. 54,464 in March2024, surpassing the previous highest of 37,844 in March2023. Also, MGL has achieved the highest ever conversions of 1,75,571 in the history of MGL in FY 2023-2024, surpassing the previous highest conversions of 1,38,000 in the year 2022-2023. It is pertinent to mention that the total PNG additions by MGL with MGLs 100% subsidiary, M/s. UEPL in the current year is highest by any CGD entity in the country.
In an effort to make it easier for prospective customers to avail D-PNG connection, MGL performed detailed assessment of various markets to identify consumer segments that are yet to adopt D-PNG. This has enabled the Company to devise solutions that can effectively mitigate the concerns of the customers.
MGL launched the Fixed Daily Charges payment plan for the tenant-occupied flats and low-income groups. In this scheme, customers will only pay a nominal amount of RS. 1 per day as well as Super-Easy EMI plan of RS. 99/- month, instead of paying a lumpsum amount of RS. 6,385 at the time of registration.
In order to encourage the builder community to embrace D-PNG, the Reticulated Agreement was simplified and made more customer-friendly. This has facilitated collaboration between major builders and MGL under the New Reticulated agreement. Today around 40 builders in Mumbai, Thane & Navi Mumbai are part of this model which not only simplifies the infrastructure creation but also gives the convenience of D-PNG to the flat owners once they move in.
Another notable milestone in MGLs D-PNG business was when MGL signed the Memorandum of Understanding (MoU) with the Indian Navy. This has opened the potential to supply to more than 8,000 households in the prestigious Navy Nagar in South Mumbai. MGL also has similar tie-ups with Indian Army (South Mumbai) and the Indian Navy establishments at Karanja, Ghatkopar, among other locations.
The reported year has witnessed one of the first-of-its-kind initiatives by any energy company in India. MGL introduced PNG Ka Mahostav scheme. The Company offered an incentive of
H 3,000 worth of free-gas to any customer who opted for D-PNG connection in a building which had been gasified prior to January 2023. This scheme enabled various non-users to choose MGLs PNG connection immediately.
The Company has also launched the "21 days MGL ki guarantee" scheme, where customers from gasified buildings have the option to register either via our personalized teams of Direct marketing Agent (DMA) or through MGL Website (www.mahanagargas.com), which aims to provide PNG connection within 21 days of payment.
For enhancing customer delight and hassle-free registration process, the Company has simplified the customer registration and name transfer process.
MGL achieved significant milestones in the CNG business as well. The Company has set up more than 110 MGL exclusive Retail Outlets (ROs). The Company also commissioned 20 new CNG ROs in the Raigad district. MGL has partnered with Reliance Jio-BP Mobility Pvt Ltd to co-locate CNG facilities at Jio-BP ROs in MGLs Geographical areas.
As a responsible CGD entity, MGL has always strived to bring greater value to its customers through induction of new technologies, systems and processes. As an endeavour to usher positive changes in the lives of people, the Company aims to expand its geographical footprint. The focus is not only to develop business but also to catapult the access of greener fuel to the society at large.
Core competencies
Safety and Efficiency : MGL upholds a stringent safety-first policy across all its operations, maintenance, and project-related activities. This ensures secure and efficient distribution of natural gas through pipelines and cascades to both PNG and CNG customers. The Integrated Command and Control Centre (ICCC) at Mahape highlights the expertise of the Company in the CGD industry. The ICCC is equipped to swiftly address any hazards or accidents.
Prioritising customers: With a steadfast commitment to customer satisfaction, MGL provides robust customer support services. Offering round-the-clock support through various channels such as phone, email, WhatsApp and social media, MGL ensures prompt assistance to meet the diverse needs of its customers.
Collaborative partnerships: MGL has built strong partnerships with various stakeholders, including government agencies, regulators, suppliers and customers. These collaborative endeavours have played a pivotal role in expanding MGLs business footprint, enhancing its service portfolio and in representing the sector at various forums.
New Technologies: Leveraging advanced systems and processes supported by cutting-edge technologies, MGL ensures streamlining of its daily operations. The Company has been at the forefront of technological innovation, as evident by its utilisation of top-tier software and hardware for asset integrity, control systems, engineering, planning, project monitoring and more. The Company further aims to strengthen its digital interface to enhance customers experience and facilitate seamless, digital transactions. The Company has successfully deployed in-house tools, facilities, software and technologies comprising thorough network review, flow modelling, identification of susceptible spots, proof of concept, expert field validation as well as specialized Non-Destructive Testing (NDT) of the CGS terminals, in a completely non-intrusive mode, thereby ascertaining the integrity of the pipeline network.
Further, Company has implemented automation of forecourt operations at MGL owned CNG stations, wherein, high-resolution cameras are installed in forecourt area of CNG stations and relevant information is being captured through these cameras which help to devise marketing strategies as well as monitor safety of operations at CNG stations.
Environmental Sustainability: MGL proactively implements measures to reduce its carbon footprint. Through advocating the use of natural gas as a clean and green fuel alternative to traditional polluting fuels, MGL promotes environmental sustainability. Also various ESG initiatives like Solar Rooftop, Rainwater harvesting etc. have been undertaken by MGL
Overall, MGLs core competencies encompass efficient and safe distribution, exemplary customer service, technological innovation, environmental sustainability and robust partnerships. These competencies have played a pivotal role in fortifying the Companys position as a leading CGD Company.
Strengths:
1. Leading Market Presence: MGL stands as one of the largest CGD companies in India. The Company has built a network that connects over RS. 24.90 lakh domestic households through pipeline, ensuring supply of D-PNG. Additionally, MGL operates 347 CNG stations to cater to the energy requirements of the expanding mobility customers. This extensive network highlights the Companys deep market reach and strong customer trust.
2. Impeccable Safety Record: MGL takes pride in a legacy spanning more than 28 years in one of the worlds most densely populated areas. The commitment to safety highlights MGLs reliability and credibility in the industry.
3. Extensive Infrastructure: MGL has expanded its gas network by laying 7,000 Kms of pipelines in its GA to serve RS. 24.90 lakhs DPNG customers and 347 gas stations to cater to the increasing demands for CNG. This extensive infrastructure guarantees convenience and accessibility for customers seeking affordable, greener fuel alternatives.
4. Synergistic Operations: Our presence in three adjacent GAs provides us with a unique advantage, fostering synergy in infrastructure creation and operations, leading to cost efficiencies and streamlined processes. With Ratnagiri GA coming in MGLs fold due to UEPL acquisition, today MGL has uninterrupted highway corridor to market CNG as well as LNG from Mumbai to Ratnagiri spanning 340 Kms on Mumbai-Goa highway.
5. Engineering Expertise: With expertise in engineering, planningandlayinginfrastructure,MGLhassuccessfully laid 433 Kms of Steel and PE pipeline this year, bringing the cumulative pipeline length to 7,000 Kms.
6. Agility: MGLs experience of over 28 years in the Gas Industry enables it to adapt quickly to the changing customer preferences and business scenario thereby maintaining the momentum and agility required in the dynamic energy sector. Additionally, MGL maintains a strong balance sheet and a healthy financial position, empowering the Company to invest in prospective growth opportunities and navigate market fluctuations effectively.
Weaknesses:
1. Lengthy Permitting Process: The prolonged authorisation process involving various statutory authorities poses a challenge as it leads to delays in project implementation. Streamlining this process is imperative to expedite infrastructure development of pipelines as well as rollout of CNG stations.
2. Land Availability Constraints: The limited availability of land combined with exorbitant prices hinders the ability to set up new CNG stations in the Mumbai region. It is essential to explore alternative solutions or forge partnerships for land acquisition to overcome this obstacle. Also the concentration of large number of utilities like Power, Telecom, Water etc. in a limited space is a big hindrance in laying NG pipeline.
3. Limited Project Execution Window: The extended monsoon in Mumbai region reduces the project execution window (October to April), limiting infrastructure development work to approximately 7 months in a year.
Opportunities:
1. Net Zero Target:Indias commitment towards achieving net zero emissions by 2070, along with enabling policies of the government for green fuels, presents significant opportunities to participate in newer forms of energy in the Industrial and mobility sectors. MGL is proactively diversifying its portfolio to include CBG and green hydrogen, positioning itself to capitalize on this growing market.
2. Rising Demand for CNG: With rising awareness towards sustainability and cleaner fuels, the demand for CNG is expected to surge. This presents a significant growth opportunity for the Company to capitalise on.
3. Increased OEM Variants: The introduction of more CNG variants by OEMs in both passenger and commercial vehicle segments offers potential for market expansion. Collaborating with OEMs to promote CNG adoption can further augment business prospects.
4. Urbanisation and Infra Development: Accelerated urbanisation and infrastructure development in Thane and Raigad regions are accelerating natural gas demand. It can prove to be a lucrative opportunity for the Company to unlock new avenues for business growth.
For more detail please refer to page 42 & 43.
Threats:
1. The potential expiry of both marketing and infrastructure exclusivity poses significant risks for the Company. The infrastructure exclusivity in Mumbai and Greater Mumbai areas expired, as per a notice from the Petroleum and Natural Gas Regulatory Board (PNGRB). This means MGL may have to offer up to 20% of its pipeline capacity on a common carrier basis, allowing other entities to lay and operate natural gas distribution networks in the same geography. The expiry of exclusivity rights introduces the risk of increased competition, which could impact MGLs competitiveness and margins. This uncertainty may stall future infrastructure development, potentially hindering the governments ambitious plan to establish a gas-based economy and achieve a 15% share of natural gas in Indias total energy mix by 2030.
2. Natural Gas Price Volatility: Volatility in gas prices and regulatory interventions, such as capping of fuel prices, pose a threat as it reduces the arbitrage between fuels like CNG-diesel and DPNG-LPG. This could potentially slow down vehicle conversion and adoption.
3. Reduced APM Supplies: The reduced availability of domestic gas for priority sectors (CNG & D-PNG) necessitates reliance on more expensive R-LNG (Regasified Liquefied Natural Gas). This significantly impacts cost structure and competitiveness.
4. EV penetration: With the development of charging ecosystem, evolving battery technologies and reducing battery cost, EV is gaining traction in 2,3 & 4 wheeler segment mostly for intracity commute. The matured ecosystem, availability of CNG variant across wider vehicle segments and the cost competitiveness of CNG against petrol and diesel is expected to drive penetration and growth of CNG with EV penetration mostly impacting the petrol and diesel sales. However, the long-term from EVs cannot be ignored. While CNG can co-exist with other alternate fuels but its growth will be moderate.
MGL has implemented strategic measures to mitigate the identified threats. The Company has established long-term supply contracts, employing a portfolio approach that includes a mix of Spot and Term Contracts. Furthermore, MGL has also secured Term gas supply agreements with key suppliers, ensuring a stable and reliable gas supply to meet demand beyond the APM allocation.
The Company is continuously strengthening its position as a leading player in the CGD sector by identifying opportunities, addressing weaknesses, leveraging strengths and efficiently mitigating risks.
Business Transformation
The FY 2023-24 marked a significant and eventful year for the company, characterised by a series of groundbreaking decisions and initiatives. The launch of Project Lakshya in FY 2022-23, symbolised a strategic shift in the journey of MGL so far. From September 2022, the Company has been working with the Boston Consulting Group (BCG) with an aim to reinvent the Company, accelerate growth, be more customer-focused and emerge as an employer of choice. Project Lakshya has been completed with great success with a focus on the core businesses, diversification opportunities, digitisation and improving customer connect. The company is now moving to scale up the ongoing initiatives and undertaking new endeavours as emerged. The focus will continue to be on operational excellence, leveraging technology and data to the maximum potential, building new businesses and developing a future-ready organisation.
Project Lakshya aimed at reimagining, reshaping and transforming the Company into a future-ready organisation. MGL has outlined a long-term strategy encompassing growth in its core sector and diversification into adjacent area with enhanced employee engagement and digitisation identified as key enablers. The Company aims to consolidate its CNG and PNG businesses, improve customer-centricity and bolster digital advancement while simultaneously explore new business avenues aligned with the Companys vision.
MGL is critically examining and streamlining internal processes to expedite network development, increase customer acquisition and elevate customer experience. The goal is to expand the customer base across CNG, D-PNG and I&C segments over the next five years, driving overall volume growth and margins.
Merger and Acquisition
With the intent to strengthen the core business and increase footprint beyond the operational areas, the Company completed acquisition of Unison Enviro Private Limited (UEPL) on 1st February 2024. This first MGLs historical strategic acquisition, represents a significant step for the Companys growth push into city gas distribution and fortifies the Companys commitment to its long-term growth strategy and enabled MGL to increase its foot prints in new Geographical area of Ratnagiri, Latur and Osmanabad in Maharashtra and Davangere and Chitradurga in Karnataka.
UEPLs substantial investments in gas distribution infrastructure, totalling H 329 Cr. since its inception, positions it well for future growth. The planned expansion, including the addition of 175 Kms of steel pipeline and 1200 Kms of PE pipeline over the next five years, demonstrates a forward-looking approach to meeting increasing demand for clean energy solutions.
During FY 2023-24, UEPL achieved notable milestones, including the laying of 46 Kms of (Steel and PE) pipeline, provision of D-PNG connectivity to 10,205 users, and the construction of
7 CNG stations. These accomplishments, alongside sales of 0.13 MMSCMD througRs. 56 CNG stations and the establishment of 57 I&C customers, showcase the companys operational effectiveness and market penetration.
With a focus on fortifying its core business and expanding access to eco-friendly fuel solutions within its GA, UEPL plans to invest more than RS. 250 Cr. in capital expenditure in the coming year. Presently, UEPL has network comprising over 18 Kms of steel pipeline and approximately 250 Kms of polyethylene pipeline, providing a solid foundation for future growth and service expansion.
New Business
LNG
The establishment of a Joint Venture Company with Baidyanath LNG Private Limited (BLNG), named "Mahanagar LNG Private Limited (MLPL)," on December 26, 2023, underscores the Companys commitment towards enhancing the LNG ecosystem. MGL holds 51% shareholding in the JVC which aims to facilitate the transition of long-haul transport and mining sector vehicles to greener fuel.
MLPL plans to add 6 stations by FY 2025. To develop the LNG market, MGL worked with M/s. Ashok Leyland Limited for more that a year. In October 2023, M/s Ashok Leyland Limited launched a 1st made in India LNG fuelled trucks and it is noteworthy to mention that the first twelve trucks are being used by MGL for CNG transportation through cascade. MGL has also tied-up with transporters to ply LNG fuelled vehicles resulting in LNG sales from Savroli increasing from less than 700 Kg/Day in August 2023 to almost 4,000 Kg/Day by end of FY 2023-24.
Overall, the acquisition of UEPL represents a strategic move that aligns with the Companys goals of expansion and sustainability in the energy sector.
EV
MGL entered the EV space by signing a Share Subscription Agreement (SSA) with 3ev Industries Private Limited ("3ev") on February 12, 2024, for an equity infusion of RS. 96 Cr. for acquiring upto ~31% shareholding in 3ev and has completed acquisition of 19% shareholding as on 31st March2024.
3ev is an Electric 3W Vehicle OEM established in 2019 in Bengaluru, Karnataka. The Company manufactures L5 category three-wheel cargo, passenger and ICE-to-EV converted electric vehicles. 3evs premium EVs are used to serve the transportation needs of leading e-commerce, retail and last mile logistics companies. The Company aims to utilise the investment to ramp up production capacity to meet increasing customer demand, support R&D projects focused on electronics efficiency and further develop aftermarket services including Battery-as-a-Service (BaaS). These 3W EVs are expected to replace mostly Diesel and Petrol fuelled small commercial vehicles.
CBG
Aligned with the National Policy on Biofuels, the company has inked MOU with the Brihanmumbai Municipal Corporation (BMC) for establishing one of the largest CBG plant, capable of processing around 1,000 TPD of municipal solid waste into compressed biogas in two phases, facilitating pollution reduction within the city, consequently improving the overall health and hygiene, promoting circular economy and aligning with the governments mandate of blending CBG into City Gas Distribution (CGD) network.
Hydrogen
To align with the governments vision of making India a global hub for green hydrogen production, MGL is also exploring alternatives to develop practical applications for hydrogen. Hydrogen, considered to be the fuel of the future, is being evaluated closely. MGL is exploring collaboration on the production and utilisation of Green Hydrogen and associated products for various applications. A pilot-scale plant may be established to develop insights and experience in blending and distributing hydrogen to the mobility, domestic, industrial and commercial segments.
MoU with M/s Mitsui O.S.K Lines Ltd. for Hydrogen pilot.
MGL is continuously evaluating opportunities in the energy value chain to actively participate in the Indias energy transition mission. Leveraging its strengths in customer service, operational efficiency and strategic foresight, MGL aims to navigate the evolving energy landscape and emerge as a leader in the clean energy space. MGLs strategic initiatives, commitment to innovation and focus on sustainability, positions the Company as a trailblazer in the energy sector. Through relentless pursuit of excellence, MGL continues to drive positive change in shaping the future of energy in India.
Financial Overview
Revenue from operations
During the FY 2023-24 the revenue from operations stood at RS. 6,862 crore.
EBITDA and EBITDA margins
During the FY 2023-24, the operating EBIDTA increased by 56% to RS. 1,843 crore in comparison to RS. 1,184 crore in FY 2022-23. The EBIDTA margin for FY 2023-24 is 30% as compared to 19% in the FY 2022-23.
PAT and PAT margin
Your Company registered an increase in PAT by RS. 499 crore to RS. 1,289 crore in FY 2023-24 from RS. 790 crore during FY 2022-23. The PAT Margin for the FY 2023-24 is 20.64% as compared to 12.54% in FY 2022-23.
PBT
Your Company registered an increase in profit before tax by 64.11% to RS. 1,733 crore in FY 2023-24 from RS. 1,056 crore in FY 2022-23.
EPS
Your company recorded earnings per share of RS. 130.50 per share in FY 2023-24 as compared to RS. 79.98 per share in FY 2022-23.
Details of significant changes in the key financial ratios, along with detailed explanation thereof
| Sr. No Ratios | March 2024 | March 2023 |
| 1 Debtors Turnover Ratio (No. of times) (Net Credit Sales of natural gas /Average Accounts Receivables) | 17.94 | 21.33 |
| 2 Inventory Turnover Ratio (No. of times) (Cost of Gas Sold/Average Inventory of Gas) | 2,536 | 3,968 |
| 3 Current Ratio (No. of times) (Current Assets/Current Liabilities) | 1.11 | 1.29 |
| 4 Operating Profit Margin (Operating Income - EBIT/Revenue from Operations-Net) | 29.51% | 18.80% |
| 5 Net Profit Margin (PAT/Revenue from Operations-Net) | 20.64% | 12.54% |
| 6 Return on Networth (PAT/Networth) | 27.79% | 20.44% |
a) Explanation for major change in Ratios as compared to the previous FY i. The increase in Return on equity is mainly due to reduction in gas purchase price.
ii. Decrease in Inventory turnover ratio is due to reduction in gas purchase price.
iii. Increase in Net Profit Ratio in percentage terms is mainly due to reduction in gas purchase price.
iv. Due to the increase in interest rates, the overall return on investment has improved compared to the previous year.
b) Disclosure of Accounting Treatment
Applicable Accounting Standards have been followed and there is no deviation compared to prescribed accounting standards
Company outlook
The fuel and energy sector is undergoing rapid transformations. Today, the customer can avail multiple fuel options, each with its own promises and limitations. Choosing a fuel for automobiles has thus become a daunting task. In such a scenario, the difficulty of developing strategies that keeps the Company ahead of the curve cannot be overstated.
MGL is committed to adapting to the evolving market landscape by continuously reassessing its strategy, processes and policies. The company is strategically leveraging its core expertise in CNG, DPNG and I&C segment while expanding into new energy sectors. MGL is poised to innovate and bolster sustainability in the evolving energy landscape. In order to sustain its growth trajectory, MGL has prioritised delivery of exceptional customer service across its segments. The Company continues to digitally transform its operations and enhance customer experiences.
The Company is conducting primary research to garner insights into the CNG customer segment, creating the desired marketing, loyalty and digital strategies. This initiative is targeted to enhance the perception of CNG usage among existing and potential customers, aligning with MGLs aspiration to position CNG as a premium fuel. Concurrently, efforts were made to improve the customer experience at CNG retail outlets, addressing issues like long queues through TAT reduction initiatives and enhancing amenities and streamlining payment processes. Moreover, strategic planning and optimisation of MGLs CNG network were pursued, involving benchmarking, demand analysis and increasing efficiency of setup processes. This initiative also sought to accelerate DPNG conversions, emphasising sustainability and customer engagement through coordinated efforts across multiple departments.
In the CNG business vertical, MGL introduced the first-of-its-kind consumer promotion, "CNG ka Mahotsava" to bolster adoption of CNG vehicles, wherein customers were incentivised on opting for a new CNG vehicle or getting their existing vehicle retrofitted. A customer purchasing CNG vehicle got a guaranteed benefit from MGL, ranging from RS. 19,999 to RS. 5 lakhs, depending on the category of vehicle purchased during the promotion period. This promotion also catapulted the working relationship between MGL and various OEMs. Additionally, the scheme also revived hitherto defunct Retrofitment industry in Mumbai market. It can be thus said that the sales of new Commercial vehicles grew by more than 200% over the last years volumes. Similarly, retrofitment of heavy commercial vehicles also increased by nearly 170%. Additionally, to expand the market for CNG, MGL has started working with large corporates/fleet operators like M/s Godrej & Boyce, Allcargo Logistics Limited, Mahindra Logistics Limited etc. for faster adoption of CNG/LNG fuelled vehicle on the strength of sustainability or lower carbon footprint.
MoU signing with Gati Express and Supply Chain Private Limited
MGL is extremely focussed on commissioning at least three more City Gate Stations in Raigad district. MGL, thereby, has already concluded the land acquisition process for CGS at Vile Bhagad and Usarghar. For its CGS at Alibaug, MGL is in the final stage of concluding the land negotiations. The opening of the three CGS will have a two-pronged effect; it will increase gas availability for the CNG consumer in Raigad district and will also lower operating costs for MGL.
In order to gain deeper insights into the purchasing behaviour of nearly 10 lakh CNG-based vehicles in its market, MGL has implemented automation at its CNG retail outlets. In the 1st phase,
17 MGL-owned outlets have been equipped with the Nawgati
(a BITS Pilani start up). The Company aims to introduce this initiative to more outlets in the coming year.
MGL is all set to digitise its retail outlet operations by introducing the Retail Outlet Application. In this application, the retail outlet operator will be able to assess different parameters, including sales, commercials, equipment performance statistics and supply updates, on his mobile. This is also expected to enhance customer service standards.
MGL commissioned its first-ever Mystery Customer Audit through an external agency to obtain an unbiased view of its customer service levels.
In the DPNG vertical, MGL offered free PNG worth H 3,000 to customers in gasified buildings who had previously not adopted DPNG connection. This scheme was part of the 5 month-long "PNG ka Mahotsav" a joint initiative of MGL and PNGRB .
The Industrial and Commercial business volume grew ~11% over last year. MGL signed long-term agreements for 1,52,000 scmd with various new industries during this financial year.
MGLs is taking all possible measures to increase the number of domestic, commercial and industrial customers to MGLs PNG network. The Company has ensured streamlining processes as quite evident through the various steps taken in the last financial year.
MGL has expanded its footprint into the LNG business. Its first LNG station at Savroli achieved sales volume of nearly 4 tons/ day by the end of the financial year. MGL is in discussions with various transporters to convert part of their fleets from HSD/ Diesel to LNG. MGL, through its JV, Mahanagar LNG Private Limited is committed to opening at least 6 more LNG stations in Maharashtra.
A strategic HR initiative bolstered recruitment and succession planning, resulting in a 20% reduction in turnaround time (TAT) and the implementation of Strategic Management Group (SMG) succession plans. Employee engagement was enhanced through measures, such as Annual Townhalls, MGL Sargam singing competition, revamped travel policy, Idea Dropbox for business ideas and a knowledge management portal integrated into the MGL Intranet for easy access to policies and documents. These efforts aim to create a more engaged and aligned workforce.
Additionally, MGL embarked on a digital transformation journey, aiming to enhance customer centricity and improve operational efficiency. The Company recognises the pivotal role of digital tools in modernisation. Through workshops, expert sessions, benchmarking and analysis, digital use cases were identified and prioritised. This led to the creation of specialised apps for stakeholder engagement, enhancement of the MGL Connect 2.0 app and implementation of a Gas Demand Forecasting Model to predict gas consumption patterns. MGL is also well-positioned for a significant transformation in Digital Personal Data Protection Act (DPDP), engaging with a renowned organisation to consolidate its applications and ensuring readiness for regulatory compliance through strategic partnerships. MGL has signed a license agreement with one of the leading providers of customer relationship management software to digitise its sales and services process. This will streamline the companies IT landscape and provide enhanced quality of services to the end customer. Moreover, MGL is in the process of migrating its applications to a unified platform, further advancing its digital-first strategy to enhance customer experience and operational efficiency.
Technology
MGL utilises a tailored Geographical Information System (GIS) for its gas pipeline network. Both desktop and mobile users can easily access the system, receiving regular updates relating to network growth. Continuous mapping, improved accuracy and database upgrades ensures the efficiency of the system. Integration of the "ESRI ArcGIS Enterprise" software has streamlined operations and increased accessibility for regular GIS users. Additionally, MGL has also created a cloud-based Document Management System (DMS) for technical record submission and archiving. MGL has set up an Integrated Command & Control Centre (ICCC) at Mahape, Navi Mumbai to enhance operational efficiency, quick response and resource mobilisation during emergencies. The centre ensures overall control and monitoring from one location. It is a digital platform integrated with all other operations software like SCADA, GIS, Vehicle Monitoring System, Forecourt Automation, CNG transport software and Automated meter reading. In the next phase, it will be integrated with SAP to incorporate maintenance planning and expenses. ICCC will facilitate management of operations effectively through combined view of entire operations at a single place with features like outage manager, identifying nearest emergency response team and many analytical features and dashboards for senior management.
Operationally, the Company has improved its SCADA system across 5 CGS, 329 CNG stations and 62 Cathodic Protection Transformer Rectifier Units. MGL has implemented a LoRA-based Automated Meter Reading (AMR) system for 7,000 domestic customers on a trial basis. The Company is exploring suitable technology to augment AMR implementation, enabling actual meter readings and billing for each customer. MGL aims to improve safety, security and enhance customer experience. Over a thousand business and industrial clients have been equipped with AMR technology, eliminating the need for manual meter reading. Additionally, another 500 I&C customers are scheduled to receive AMR facilities in the fiscal year 2024-25.
The Company has completed installation of 18 probes for monitoring health of the pipeline and aims to install four more probes in the FY 2024-25.
MGL aims to provide a seamless customer experience through various new initiatives and self-meter reading awareness campaigns. The Company continues to enhance the efficiency of household meter readings in the process. The initiation of using Android software for domestic meter reading has significantly improved accuracy and efficiency. The software is updated regularly to facilitate consumers to access meter reading through SMS.
An SMS system ensures that the residential consumers receive notification regarding meter reading date and details about the service technician. Customers can verify the details through the link sent on their registered mobile number.
Due to 59 Type-3/ Type-4 composite cascades for CNG transportation, MGL ensures more CNG is transported through each trip, reducing environmental impact consequently as well lowering the number of journeys and fuel usage. Additionally, more composite cylinder cascades are intended to be installed, particularly in remote locations.
The Company has set up Solar Plants at 6 MGL owned CNG stations, all 5 City Gate Stations (CGS) and MGL office at Mahape totalling to 187 kw power generation capacity. Furthermore, the Company plans to set up solar power facilities at Savroli, Ghansoli, Sion CGS etc. as a green initiative aimed at increasing its renewable power capacity, thereby reducing power intake from the grid. MGL has installed wind power turbine at CGS, Taloja and same will be replicated at few more feasible sites.
MGL has inducted Indias First 12 LNG-fuelled made in India trucks in GA-3 (Raigad district) to transport CNG between mother and daughter booster stations. These trucks will be refuelled from MGLs own LNG dispensing facility at Savroli.
MGL has started SCADA based daily CNG sales reporting and preparation of joint tickets, enabling further billing to retail CNG station operators or OMCs.
MGL has installed metering systems in 30 District Regulating Stations and planned another 40 DRSs in FY2024-25. This will complete provision of meters in all above ground DRSs and will enable reconciliation of gas quantity up to DRS and identify possible areas of gas loss.
Digital Initiatives
1. Improve PNG and CNG customer experience through revamped MGL Connect App
To enhance the CNG and PNG customer experience, some of the existing features of the MGL Connect app have been revamped. New features such as Personalised Loyalty (Like Cashback or Rewards), CNG Station Locator and Chatbot have been added.
2. Workflow Automation & Management
Workflow Automation can greatly reduce the time for getting approvals in various processes. With this objective in mind, two new workflows have been implemented in MGL. One initiative focused on expediting the Letter of Intent for new CNG stations, aiming to reduce the time required for LOI Issuance.
The second initiative was automating the approval process for any process change within the organisation.
3. Integrated Comman & Control Centre for O&M (ICCC) O&M Team is currently using three data sources-
SCADA for transaction data and key efficiency and operational parameters of assets such as steel pipelines and compressors.
GIS for geographical representation of pipeline network, location of assets like stations and valves, mapping of customer base to pipeline network.
IVMS for live monitoring of emergency vehicles and their locations.
MGL has completed the mission to implement ICCC which integrates the SCADA, IVMS and GIS systems. This will provide a combined view to the operations team and senior management, reducing response time for various emergencies, dry outs at CNG stations and can also provide metrics for various KPIs.
4. Gas Demand Forecasting Model
The objective of the model is to predict daily sales at City Gate Station (CGS) level. The input variables for the model include 5-year historical demand data, weather parameters (e.g. rain, temperature and cloud cover), holidays, weekday or weekend, price of CNG or PNG and alternate fuels and is being used for machine learning.
The model is expected to aid the commercial team in anticipating gas demand changes and provide inputs for optimal gas procurement.
5. Robotic Process Automation (RPA)
RPA is the use of software robots to automate repetitive tasks and processes, allowing employees to focus on higher-value work. RPA has the potential to transform the Companys operations and efficiency. It works by mimicking human interactions with digital systems. RPA can navigate through applications, manipulate data, trigger responses and communicate with other systems to execute defined tasks.
Benefits of RPA:
Enhanced Efficiency - Streamlines processes, reduces human errors and accelerates task completion, leading to improved productivity.
Cost Savings - Significant cost reductions by minimising manual labour and monotonous or repetitive work.
Improved Accuracy- Consistent and precise execution of tasks, reducing the chances of errors in repetitive processes.
MGL has procured a market leading RPA tool to automate some of its processes like
IT Network Outage Monitoring
Finance and Accounting – Vendor Invoice Processing
Customer Service – Duplicate Bill requests
Customer Service – Automated Meter Reading upload
Customer Service – Archival of Customer letters/communication This set of processes will be followed by wider implementation of RPA at MGL.
6. Forecourt automation
MGL has collaborated with a startup to digitise its retail outlet forecourt operations. This includes monitoring the vehicle queues and providing waiting time to CNG customers, reading vehicle number plates and using the data to query Vahan database and determine the CNG cylinder inspection date, integration with SCADA to get the type of vehicles filling at the CNG station etc.
7. Implementation of ISO 27001
MGL continues to strengthen its security posture.
MGL has obtained ISO 27001 certification which is the international framework that defines the requirements of an Information Security Management System (ISMS). ISMS is a systematic approach consisting of Processes, Technology and People that helps to protect and manage the Companys information on the following three aspects.
Confidentiality: Only authorised people have the right to access information.
Integrity: Only the authorised personnel can change or modify the information.
Availability: It ensures that only authorised users can access data whenever required.
Benefits of ISO 27001
ISMS contains 114 Security controls which improve the existing IT processes to keep the organisation secure and resilient from cyber-attacks and data breach.
ISMS implementation helps the organisation to continuously identify, monitor and mitigate security threats.
8. Internal Audit Portal
The Internal Audit Portal is a web-based platform that enables MGL to manage internal audit planning, execution and reporting in a centralised location. With this new system in place, MGL will be able to track audit progress, collaborate more effectively and enhance the quality of the audit work.
The portal also offers a user-friendly interface that allows executives to easily upload audit-related documents, including findings, recommendations and corrective actions. It can also schedule audit activities and track follow-up progress, all in one place.
9. Study and assessment for Digital Personal Data Protection Act
The Digital Personal Data Protection Act (DPDP) was enacted in August 2023 after receiving Presidents assent. The Act will come into effect after the rules are finalised and released. The DPDP Act provides the process of digital personal data in a manner that recognises both the right of individuals to protect their personal data and need to process such personal data for lawful purposes and for matters connected therewith or thereto.
Since the Company operates in both B2C and B2B segment, it requires to maintain personal data of its customers, such as name, mobile number, and address etc. MGL has engaged consultant for strengthening its existing data privacy infrastructure as envisaged in the DPDP Act.
Customer Relationship Management (CRM)
MGL has a well-defined robust mechanism dedicated to addressing customer concerns efficiently and promptly. The CRM department serves as the vital link between customers and MGL, employing a strong infrastructure and well-defined processes for effective issue resolution. Pioneering technological advancements, MGL established the first-ever live enterprise solution for its Customer Care Centre through SAP and introduced a WhatsApp solution to enhance the overall customer experience.
Setting a precedent in 2003, MGL became the first CGD company to establish an In-house Call Centre, evolving from five workstations to an impressive 108 workstations today. Expanding the Companys reach, MGL has introduced two new walk-in centres in this financial year, at Badlapur and Kharghar, bringing the total to 12 walk-in centres for better physical accessibility.
Ensuring a comprehensive approach, MGLs back-office operations diligently handles all written correspondences, acknowledging and responding within specified timelines. The
Company has also extended CRM support to CNG, commercial and industrial customers in the current financial year.
MGLs CRM setup has become the industry standard, attracting visits from various reputable CGDs, to study and replicate the exemplary processes and systems.
Health, Safety and Environment (HSE)
MGL is committed to providing a safe and healthy working environment for its employees, while minimising any negative impact on local communities due to its operations. The Company has been able to maintain a zero-harm strategy, while focusing on health, safety, environment and quality. MGL has created injury prevention, transportation and fire safety programmes which aligns with the SHEQ and risk management system.
At MGL, Health, Safety and Environment commitment is a fundamental responsibility. All employees are responsible and accountable for safety, health, and environmental protection. They demonstrate strict adherence to the HSE policy and procedures to the highest level.
Obligations
The Companys key HSE priorities include a continual improvement of our health, safety and environment performance by reducing accidents, occupational injuries, work-related illnesses and improvements on the key environmental parameters such as energy conservation, monitoring emissions etc. thereby, remains committed to:
Provide a safe & healthy workplace to prevent work-related injuries and ill-health
Comply 100 % with MGL Life Saving Rules
Monitor HSE and Quality performance
Play a leading role in promoting best industry practices
Manage HSE matters as any other critical business activity
Promote a culture wherein major stakeholders share this commitment through mutual consultations and participation
Compliance and standard
MGL has HSE and Quality Management System which complies with the following standards and has been certified for the same by third party inspection agencies:
ISO 45001:2018 for Occupational Health & Safety Management System
ISO 14001:2015 for Environment Management System
ISO 9001:2015 for Quality Management System
PNGRB ERDMP Regulation 2010 (amendment 2020)
Integrity Management System for City or Local Natural Gas Distribution Networks (PNGRB) Regulation 2013 (amendment 2020)
ISO 27001 for Information Security Management System
The company adheres to all HSE, legal and statutory requirements and aspires to achieve recognised world-class performance.
Accomplishments and appreciation
MGL has been awarded with
APEX INDIA Platinum Safety AWARD 2023 under Gas Sector.
GreentecRs.2023awardunder"ConstructionSafety"category.
Certificate of Merit 2022 from National Safety Council India – Maharashtra Chapter for CGS, Mahape, Ambernath and CGS Taloja.
CII Western Region Safety, Health & Environment (SHE) Excellence & Innovation AWARD under Service Sector from Confederation of Indian Industry.
HSE highlights for the year
A Major Mock Drill involving Fire Brigade, Disaster Management Cell, Directorate of Industrial Safety and Health, Mutual Aid Response Group (MARG) members and Police officials was conducted to demonstrate our Emergency Response and Disaster Management Plan (ERDMP). The efforts were well appreciated by the statutory authorities.
MGL has coordinated and actively participated in MARG activities in all operational areas.
Hosted first Knowledge sharing session "Gyanpravah Sahayatra" coordinated by Natural Gas Society of India for CGD Industry.
During Fire Service Week, instituted "Agnisuraksha Padak" for employees and contractual manpower for demonstration of bravery during fire fighting.
During World Environment Day, MGL undertook plantation drive on forest plots and organised Biodiversity Tour in Forest for employees with help from Forest Department, Government of Maharashtra.
Use of Online Application for capturing site compliances & observations thereby reducing paper usage.
Collaboration with City Institute of Disaster Management, Mumbai Disaster Control Centre under Mumbai Municipal Corporation for training of employees engaged in emergency response.
Collaboration with Training Ship Chanakya, Indian Maritime University for hands-on training of employees on Fire Fighting at its state of art facility at Navi Mumbai campus.
HSE Processes
In order to bring uniformity into the system, MGL has integrated Occupational Health and Safety Management System, Environment Management System and Quality Management System. A core team comprising of ISO Representative from each department has been formed for effective implementation of the system. Various trainings were imparted for effective implementation of SHEQ Management System. Furthermore, gap assessment was carried out and road map was prepared. The final documentation review was conducted by external third party and subsequently, re-certification audit was successfully completed with no major non-conformity.
HSE processes and practices such as Senior Management Tours by MGL Management, interaction and awareness sessions with frontline workers and utility coordination meets as per MGL Sahayogi Campaign, are followed to ensure compliance and to improve HSE performance.
HSE training
MGL takes every step to ensure that the safety competency of the manpower is maintained at optimum level by providing them relevant trainings on HSE by engaging competent agencies apart from inhouse training resources.
MGL has provided trainings for employees on Disaster Management, Defensive Driving, Fire Fighting, First Aid and CPR, ESG Awareness, LNG Terminal safety.
To ensure that training is provided by competent trainers and at best facilities, MGL partners with agencies such as the National Safety Council, City Institute of Disaster Management, Indian Maritime University and SGS India and Petronet LNG.
The Company also ensures that the contractual manpower engaged at ground level gets access to best infrastructure during training. Technical institutes such as Bharti Vidhyapeeth Institute of Technology, Don Bosco Centre for Learning and Ahmed Abdullah Garib Private ITI were engaged for providing Safety and Technical Competency Training.
Till date MGL has trained 120+ employees at TS Chanakya in Fire Fighting and Rescue Techniques, as well as over 400 employees and key personnel.
Project monitoring
The web-based modules and applications such as Last Mile Connectivity, Working at Height, Plumber Tracking, CWIP Ageing Analysis, and Project Cost Monitoring are being diligently used to enhance the efficiency of existing project operations. An app was also developed and implemented to facilitate monitoring of safety during risky operations like working in a high rise building or while undertaking deep excavation etc..
Furthermore, an add-on feature was also developed in LMC app, which is used for obtaining feedback from newly onboarded domestic customers to further enhance customer experience.
Regular on-line and off-line interactions are done to ensure early detection and mitigation of the issues faced by the ground staff. On the other hand, collaborating with authorities ensure laying of infrastructure without damage to the new roads and bridges being constructed by these authorities.
Security
The need for a comprehensive revaluation of the security function to strengthen business expansion of the Company amidst difficult times was essential. The Company, therefore, focused on risk assessment, emphasising asset protection and increasing use of technology in security operations.
Security procedures and guidelines were constantly examined and updated to improve the systems and reduce any weaknesses. The Company ensured the security procedures were constantly tested and updated based on inputs from stakeholders. This enabled precise access control, improved security awareness training, effective incident management exercises, comprehensive risk and vulnerability assessments and threat appraisal workouts.
With the Companys expansion into unchartered domains, the need for proper security operations increased. The installation of command-and-control software enhanced the security control rooms monitoring capabilities and on-site physical guarding. The ability of the Integrated Command and Control Centre (ICCC) to drive a single user interface streamlined operations and facilitated centralised command over them. With the incorporation of pattern analysis, AI and machine learning, swift operational decisions were made easily. The Incident Control Room allows multiple users access and provides the top management to watch, evaluate and react to any incident in a timely manner. The ability to record, store and analyse digital video images and recordings improved operating efficiency and removed false alerts. Camera with edge-based analytics were also installed for additional security.
The automation has overcome the challenges of human errors and inadequacies. The seamless integration of technology into legacy security system has improved overall efficacy of security operations.
Cybercrimes and fraudulent activities performed by scrupulous persons pose a tough challenge in the present day. MGLs clients are also vulnerable to cyber threats and hence MGL Team has been focused on reducing such incidents by proactive approach and conducting successful investigations. The security team was successful in recovering the money fleeced by these criminals, generating confidence and goodwill among the customers.
Human resources and industrial relations
At MGL, we consider our employees critical to our success. They are our key assets, and we are committed to provide an employee-centric climate, focusing on diversity and equity. We strive to create a professional atmosphere to nurture our employees to grow and achieve their career aspirations. We continue to create a work environment that supports innovation and inclusion with an ongoing focus on overall wellbeing of our employees. Our culture and reputation as a pioneer in CGD business, commitment to environment, ethical behaviour and usage of next-generation technology enables us to attract, develop and retain a highly talented workforce. We have onboarded 41 employees during FY 2023-24 and our total employee strength stands at 532 as on March 31, 2024 with Gender diversity ratio of 9:1.
Our endeavour is to engage employees and enable them to perform to their potential. Nurturing talent for the future is essential for our continued success. Our Talent Management processes focus on building talent pipeline of future leaders. This is done through transparent Performance Management system, learning interventions like Management Development Program (MDP) etc. Employees are provided with innovative platforms to learn and grow, by leveraging both digital and classroom modes of learning which is a key element of our people strategy. We have organized a wide range of learning initiatives for overall development of our employees across the Grades to enhance their skills for taking higher responsibilities. One of such initiative is ‘Udaan Programme which aims to identify high potential employees through assessment centres to develop future business leaders.
Our women workforce was trained in a special outbound program for discovering the power within. Senior Leadership team members participated in MDPs organized by various prestigious Management institutes like IIMs, etc.
POSH, Human Rights, Grievance Handling, Cybersecurity Awareness, Code of Conduct are such compliance related programs that have been conducted to make our workplace more aware and inclusive.
Special emphasis was given on strengthening our organizational culture through "voice of employees" by conducting Town Hall meeting. Leadership connects and communication throughout the year played a significant role in building a high-performance culture. Further employees were duly recognized and appreciated in various forums for their contributions to the organization. We also reached out to the family members of our employees by providing a platform to display their talent.
MGL believes that a competency based culture and the Assessment Development Centres helps in identifying top talent and fast track employee progression to build leadership and develop competencies. Learning and Leadership are inextricably linked. With this objective, a sustainable and measurable development journey is charted out for our identified Hi-potential employees, who have been consistent high performers.
Motivated employees add to the productivity and success of the organization, while also leading happier and fulfilling lives.
Policies like flexible working hours, death relief, health checkup, holiday home, long service award, reward & recognition are in place. These help in promoting a motivated, transparent and participative organization culture, while rewarding merit and sustained high performance.
We also aim to create a workplace where our employees feel supported at the hour of need. We have extended insurance coverage for our employees and their dependent family members. We have an in-house medical officer to address the health concerns of our employees and their extended family members. Tie-ups are in place with various health clinics as well as hospitals for preventive health check-up.
The Company continues to maintain harmonious relations with the Staff Union. All Labour related Statutory Compliances are continuously monitored and the compliances are adhered to.
We are proud to state that MGL is in the top quartile of employee engagement as part of Global survey undertaken by BCG, in Energy sector. Thus, all round efforts were made to drive employee motivation, experience and performance which in turn translated into excellent business results. Together, we make our company the special place it is - because we are MGL family. Each day, we make MGL greater than ever.
Risk management
Risk management is an integral part of MGL business operation as all aspects of its business are subject to market fluctuations and investor confidence play crucial roles. The Company emphasises on the commitment to ensure robust risk management practices to safeguard stakeholders interests and facilitate sustainable growth.
The risk management function, under the Risk Management Committees guidance, formulates policies, identifies risks, and monitors mitigation measures to achieve strategic objectives. Functional Heads are responsible for ongoing implementation.
Enterprise Risk Management (ERM) stands as the cornerstone of the Companys corporate strategy, ensuring that MGL effectively navigates uncertainties while capitalising on opportunities. MGL underscores its steadfast dedication to ERM, recognising its pivotal role in safeguarding shareholder value and driving sustainable growth.
The Companys ERM framework is comprehensive and adaptive, encompassing a diverse array of risks across financial, operational, strategic and regulatory landscapes. Through regular risk assessments and scenario analyses, MGL systematically identifies, evaluates and prioritises risks, enabling the Company to allocate resources effectively and proactively mitigate potential threats.
Risk management policy and plans are reviewed regularly to reflect changes in market conditions and the Companys activities. The major financial risks identified by the businesses are systematically addressed through mitigation actions on a continual basis.
MGL reaffirms its commitment to uphold stakeholder trust, long-term value creation and sustainable business practices. The Company is confident that its proactive approach to risk management will continue to fortify its resilience and drive success in the marketplace.
Internal control system
MGL has made significant efforts to establish and maintain robust internal control systems aligned with the complexities of its business operations. MGL has meticulously documented procedures, SOPs, and controls, which have been digitised and integrated into business processes. This comprehensive approach aims to mitigate risks in operations, reporting and compliance. Internal controls undergo regular testing for both their design adequacy and operating effectiveness by in-house internal audit team. This ensures that controls are not only well-designed but also functional in practice.
The Audit Committee approves a risk-based internal audit plan that focuses on key business processes and expenses. This targeted approach allows for efficient allocation of audit resources to areas of highest risk. Internal audit is conducted by a reputed external firm and significant audit observations and corrective actions are periodically presented to the Audit Committee. This external perspective adds credibility and depth to the audit processes. To maintain objectivity and independence, the Internal Auditor reports directly to the Chairman of the Audit Committee. This reporting structure helps ensure impartiality in audit activities.
The Audit Committee holds independent sessions with both the Statutory Auditor and Management to discuss the adequacy and effectiveness of Internal Financial Controls (IFC). This collaborative approach fosters transparency and accountability.
In the current year, MGL has developed and implemented an in-house module to manage the entire internal audit process. This system-driven approach enhances efficiency and creates an online repository for future reference. Similarly, the entire IFC process has been moved to an online module, streamlining scheduling, document management, and control testing. Management and Internal Auditors have conducted thorough due diligence and testing of the control environment. This rigorous process ensures that controls are effectively implemented and embedded in business processes. Despite the thorough assessment, no material weaknesses were observed in the control environment during the year under review. This indicates the effectiveness of our control systems in mitigating risks. Overall, MGLs commitment to establishing and maintaining effective internal controls and audit processes is robust. By embracing technology, engaging with stakeholders, and conducting rigorous testing, MGL assures enhanced integrity and reliability of business operations and financial reporting.
Cautionary statement
This document contains statements about expected future events, financial, and operating results of Mahanagar Gas Limited, which may be forward-looking. By their nature, forward looking statements requires the Company to make assumptions and are subject to inherent risks and uncertainties. There is significant risk that the actual results may differ from the forward- looking statements mentioned in the Annual Report. Readers are cautioned not to place undue reliance on forward-looking statements.
Closing Date: Wednesday, 23rd April, 2025 (Time 5.00pm). Effective Yield* of Upto 10.24% p.a.
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