Mahanagar Gas Ltd Management Discussions

Economic Overview

Global Economic Overview¹

The global economy achieved a growth rate of 3.3% in CY 2024, demonstrating remarkable resilience amidst myriad economic headwinds. Driven by a gradual decline in inflation, reduced commodity prices and monetary easing in many countries, the global economy is making gradual recovery, albeit with regional disparities.

While the United States exhibited robust growth, major European countries recorded subdued economic performance, creating a stark contrast in economic outcomes. For instance, Germanys performance has been lagging as compared to other Euro area countries, owing to the countrys prolonged structural challenges and fierce global competition, particularly from China. On the other hand, most developing economies have witnessed an uptick in economic growth, owing to policy reforms and greater strength against global shocks.

Global inflation continues to decline, with central banks making cautious moves in easing monetary policies. Further, global

energy demand is on the rise, despite economic uncertainty, as major economies are driving the shift towards cleaner energy sources.

Evolution of 2025 Growth Forecasts

The global growth is projected at 2.8% for CY2025 and 3% for CY2026. In the United States, underlying demand remains robust and corporate tax cuts and deregulatory measures can enhance economic activity in the short term; however, newly imposed tariffs could lead to inflationary challenges.

Global inflation is expected to average at 4.3% in CY2025, with the advanced economies reaching their targets faster than Emerging Markets & Developing Economies (EMDE). It is anticipated that major economies will focus on recovering from economic headwinds, increasing energy demand to bolster industrial activities.

With the U.S., Russia and OPEC nations increasing oil supply, decline in energy prices is expected. However, due to escalating geopolitical turmoil, particularly in the Middle East and ongoing global trade frictions, there is a revised downward projection for global trade volume in CY2025 and CY2026. Emerging Asia might witness production decline owing to diminishing exports to the US. Nevertheless, attempts at bilateral trade deals and substitution of trade partners portend positively for risk mitigation within the global economy.

Global GDP Forecast (CY 2025)

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Indian Economic Overview²

Amid a challenging global economic landscape, the Indian economy continued to exhibit resilience, growing at 6.5% for FY 2024-25. With a steady rural demand, favourable monsoons and robust performance by the service sector, inflation has taken a downward trajectory, with headline CPI inflation for the financial year at 4.6%.

Investment activity gathered momentum during the year, driven by manufacturing exports, robust output from steel and cement

industries and high capital goods imports. Further, the Indian government continued to expand infrastructure spending and facilitate several initiatives, such as the Production Linked Investment Scheme 2.0, to boost domestic industrial activity. Additionally, the RBI has reduced interest rates from 6.5% to 6.25%, marking the first cut in five years, further reducing it to 6% in April, to stimulate economic growth.

Outlook^

Moving forward, Indias economic prospects remain strong despite subdued global growth. The Indian economy is projected to be one of the fastest growing major economies in the world, driven by increased public infrastructure investment and an upswing in household investments in real estate as per world bank. On the supply side, it was supported by uptick in manufacturing and stable services activity, despite lower Agri output, gradual decline in inflation and strong consumer spending. Further, the governments proactive policy measures like Logistics policy & digital initiative to bring down cost are expected to encourage Foreign Direct Investment (FDI), taking advantage of China plus 1 opportunity.

To address food shock inflation, the government is implementing strategic initiatives to mitigate the effects. It is anticipated that increasing economic activity in tier 3 and tier 4 cities will bolster domestic demand. Additionally, Stronger monsoon in coming year coupled with healthy reservoir levels are likely to result in better performance of agriculture sector. The domestic business sentiment and consumer confidence are also projected to maintain their upward momentum. Accommodative monetary policies, coupled with additional income tax relief for salaried individuals, is expected to drive growth.

However, Indias international trade is expected to be impacted by macroeconomic challenges amid the tariff-induced transformation of global trade order. With global supply chain disruptions, prices of some raw materials might inflate affecting manufacturers margins. Global downside risk of an economic slowdown will likely affect investors sentiment in the nation in the near-term. Conversely, FII moving away from the US & China plus one strategy may find the stability of the Indian economy appealing leading to capital influx in the nation.

Indias energy requirements are also expected to grow at a higher clip as the nation moves towards a ‘Vikshit Bharat by 2047. The nation has the potential to emerge as a global manufacturing hotspot, due to notable shift in FDI, accelerated infrastructure build-out, Production-linked incentives in key sectors, on the back of the attractive home market.

Industry Overview

Indias Energy Composition³

India is the third-largest energy consumer in the world after China and the US. Driven by rapid economic development, urbanisation and industrialisation, the nations energy scenario is a dynamic and an evolving landscape. With the country planning to reduce its greenhouse gas emissions and targeting net zero emissions by 2070, its energy mix will increasingly shift towards low carbon with a strong focus on renewable energy sources. This will also reduce import growth of POL thereby enhancing energy security.

Coal continues to remain the mainstay for energy supplies but the trend especially in power generation is on decline. However, after a subdued capacity addition of thermal power generation capacity in recent past (comprising of Coal, Gas & Diesel but mostly coal), GOI has recently announced thermal capacity addition of 80 GW. This will be to meet the peak demand as well as balancing the grid as the policy shift towards Renewable is likely to be more pronounced. Thermal power still accounts for ~50% of Indias total installed electricity capacity but as per estimates of CEA, its contribution is projected to decline to ~42% by FY27 and 31% by FY32.

Presently, natural gas forms ~7% of Indias primary energy portfolio. However the nation is poised to double this figure to 15% by 2030.⁴ To facilitate the transition to a gas-based economy, the main driver will be expanding City Gas Distribution (CGD) segment coupled with marginal to modest growth emanating from Refinery, Petrochemicals & Steel sector aided by softening LNG prices worldwide & growth of Gas Pipeline as well as ramping up of LNG import capacity.

The national commitment to derive 50% of electricity from nonfossil sources by 2030 signals a major shift, resulting in India ranking 4^th in renewable energy capacity. The geographical advantage of 300 sunny days annually, Indias solar energy sector has grown tremendously at a CAGR well over 30% in last decade mainly driven by government policies and participation by national as well as international firms.

Indias Installed Power Capacity

Indias Oil and Gas Sector⁵

A critical contributor to the Indias energy basket, the oil and gas sector ensures energy security and underpins various economic activities. The consumption of petroleum products in FY 2025 with a volume of 239.2 MMT, registered a year-on-year (YoY) growth of 2.1%.

On the other hand, the use of natural gas as an important primary energy source has been steadily gaining favour. As a result, the cumulative natural gas consumption for the current financial year reached 71,314 MMSCM, marking a 5.6% increase compared

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to the previous financial year. Under the ‘One Nation, One Gas Grid initiative, the Petroleum and Natural Gas Regulatory Board (PNGRB) has approved ~34,233 km of natural gas pipeline network across the country to create a national gas grid and increase natural gas availability as on March31, 2025. Presently 25,429 Km of the National gas Grid is operational & 10,429 Km is under construction (including main and auxiliary pipeline).⁶

According to the International Energy Agency (IEA), Indias natural gas consumption is expected to increase by 60% by 2030. Policymakers continue to promote growth through slew of measures, aimed at promoting environmental stewardship and

prompting competitive pricing. Further, the sector is also recording a significant investment uptick in infrastructure mainly in CGD sector.

While domestic natural gas production remained stable at ~98 MMSCMD, the increase in Gas demand will be met primarily by LNG which is likely to register an impressive growth with supplies almost doubling by 2030.

Currently, India relies on LNG imports to fulfil more that 50% of its needs and this is expected to grow significantly by 2030 to meet the growing demand.

India Monthly Natural Gas Consumption (FY 2025)

Month	April	May	June	July	Aug	Sept	FY2024-25 Oct	Nov	Dec	Jan	Feb	March1	Total
a) Net Production	2907	3058	2945	3030	2999	2936	3073	2936	3026	3025	2712	2947	35594
b) LNG import	2499	3516	3460	3689	3056	2787	3626	2712	2829	2436	2713	2397	35720
Total Consumption (a +b)	5407	6575	6406	6719	6055	5722	6699	5648	5854	5460	5424	5345	71314

MMSCM: Million Standard Cubic Meters

Natural Gas Consumption (including internal consumption)

Source: Petroleum Planning & Analysis Cell

India Sectoral Natural Gas Consumption in FY 2024-25 (% share)

Indias Gas Import in 2025

India continues to depend substantially on LNG imports & the import dependence is likely to increase, going forward. To meet the projected demand in 2030, the existing regasification capacity needs to be augmented. Further proper investments in LNG vessels, terminals and associated infrastructure are essential. With the increase in gas prices, the government aims to focus on domestic capacity expansion and elevated Administered Pricing Mechanism (APM) allocation to promote sector growth.

Biogas

India has a huge potential of Compressed Bio Gas (CBG, also called as Renewable Natural Gas), both from Agri waste as well as Municipal Solid Waste. The CBG production also results into solving major environmental & social problem facing the country i.e. mounting landfills in urban area, GHG emissions & Air pollution due to agri-waste burning. GOI has introduced several policy initiatives to support CBG production with a target to have 5000 CBG plant operational by 2030. At the end of FY2024-25,

around 90 CBG plants were operational & additionally ~500 plants are at various stage of construction. By 2030, if these 5000 plants operate at full capacity, they can easily meet around 30MMSCMD of CNG demand saving not only foreign exchange but also reducing the landfills, GHG emissions & Air Pollution. However, challenges such as land availability for MSW based CBG plants, Waste segregation, Seasonality of Agri Waste & logistics pose significant challenges.

City Gas Distribution (CGD)⁷

CGD entities like your company, lay network of interconnected pipelines in the Geographical Area (GA) authorised to them by PNGRB serving four distinct market segments having competition to alternate fuels as outlined below:

Segment	Usage	Competition	Type of Infra	Present Infra	Infra at Completion of MWP
CNG	Transport Fuel	MS, HSD	CNG Stations	8000	18336
PNG-D	Cooking Fuel	LPG, Biomass	Connections	1.5 Cr.	12.6 Cr.
PNG-Comml	Cooking Fuel	LPG, FO	Connections	45000	NA
PNG-Industrial	Heating etc	FO, LDO, Naphtha, Propane, Coal	Connections	20,000	NA

Source: Indias NG demand projection for 2030-2040 by PNGRB (as on 31.03.2025)

PNGRB has authorised 307 GA and has renewed its thrust to complete the Gas grid covering the length & breadth of the country. Rapid urbanisation, development of CGD network encompassing CNG stations as well rapidly growing connectivity for Households, Commercial & industrial establishment, availability of wide range of CNG vehicles from OEM (Passenger, commercial), environmental considerations & convenience will propel the NG consumption making it the fastest growing segment of NG market.

As per PNGRB, the projected consumption of NG is expected to reacRs. 297 MMSCMD by 2030 in Good to Go Scenario reflecting a healthy CAGR of ~8% from the base year FY2023-24.

City Gas Distribution System demand-wise forecast (CY2021-CY2030)

The CGD segment plays a critical component in the nations broader gas ecosystem. It supports the energy distribution architecture via a network of CNG stations and PNG connections. The Indias CGD market is expected to nearly double from $11.33 billion in 2025 to $20.93 billion by 2030.⁸

As on March31, 2025, India had approximately 1.5 Cr. Domestic Piped Gas connections and approximately 8000 CNG stations. However, CGD companies aim to connect 12.6 Cr. residential consumers, substantial commercial and small industrial consumers sectors, in addition to 18,300 CNG stations in Indias CGD network by 2032 to meet the MWP (Minimum Work Programme).

Further, favourable policies granting CGD operators market exclusivity with APM gas allocation is driving sector expansion. Although infrastructural headwinds, including high capital outlays and approval-related delays, may pose challenges: the future seems optimistic for the CGD industry.

Indias Mobility Sector

In India, the growing adoption of CNG vehicles marks a significant shift towards sustainable mobility solutions. In passenger vehicles segment, the share of CNG variants sales more than tripled in last five years to 19.5%, overtaking diesel cars sales in FY25 as per Society of Indian Automobile Manufacturers (SIAM). Increase in CNG stations as well as OEM offering in addition to price advantage vis a vis Diesel & Petrol are cited as the major reason for growth in CNG variants sale. This has propelled India as one of the worlds largest markets for CNG vehicles, with ~7.7 million CNG-fuelled vehicles on the road.⁹ Further, rapid infrastructure development, driven by robust public and private investment, priority allocation of APM-priced gas to this sector are responsible for the sectors significant growth.

While Electric Vehicle (EV) adoption is on the rise, the lower initial cost as well as total cost of ownership of CNG vehicles compared to EVs & proven track record is mainly driving the CNG Vehicles growth. There is also a roll out of new CNG vehicle models by Original Equipment Manufacturers (OEMs). Since 2018, the number of models/variants of Passenger cars as well as Large & Heavy commercial vehicles have doubled & during the same period, the number of variants in Small vehicle have increased by 4 times. It is worth noting that MNC OEMs like Toyota, Hyundai, Citroen who do not have any CNG variants world over have for the 1^st time introduced CNG variants only for Indian market. This clearly demonstrates the attractiveness of Indian market for CNG, both from supply & demand side.

The freight and logistics industry is also turning towards CNG, driven by favourable economics. The rise in E-way bills for InterState transactions by 17% YoY in FY 2025 suggests stronger economic activity, as businesses increase movement of goods across the country. CNG refuelling stations, alongside LNG solutions tailored for long-haul freight, are strongly positioned to reap the rewards of the shift towards cleaner mobility solutions.

The heavy commercial vehicles usage is about 30 kgs per day on an average. LCV is about 20 kgs and the small commercial vehicles consume about 7.5 kgs daily.

Company Overview

Established in 1995, Mahanagar Gas Limited (MGL) is one of Indias leading CGD companies. MGL has played a pivotal role in expanding natural gas infrastructure and promoting its usage across the Mumbai Metropolitan Region and adjoining areas. The Company serves diverse customer segments, including domestic households, commercial establishments, industrial users and the automotive sector, through its piped natural gas (PNG) and compressed natural gas (CNG) offerings.

The Company upholds a strong commitment towards safety, operational excellence and environmental sustainability. Operating an extensive distribution network that ensures reliable access to eco-friendly fuel solutions, MGL has been instrumental in supporting Indias transition to a gas-based economy.

The Company was entrusted by the Petroleum and Natural Gas Regulatory Board (PNGRB) to expand its operations to Raigad district in 2015, achieving a significant milestone in contributing to cleaner energy adoption while maintaining sustainable urban development. For Financial year 2024-25, Sales volume increased by 12.27% y-o-y while total sales volume for the FY 2024-25 stood at 4.052 MMSCMD.

Gas Sourcing

MGL gas sourcing primarily involves sourcing of natural gas in line with the consumption of gas across different sectors like Domestic PNG, PNG (Industrial & Commercial) and CNG (transport).

MGL has prudent cost-effective sourcing strategy that involves procuring natural gas from various sources, including domestic and RLNG supplies based at different benchmark price indices. This strategy helps us maintain competitive pricing and profitability.

Various sources from which MGL sources gas include domestically produced gas i.e., APM/ Non-APM gas, New Well Gas, HPHT gas and Term RLNG, Market Determined Price (MDP) gas and Spot RLNG.

Domestically Produced Gas APM/ Non-APM Gas:

MGL sources a significant portion of its natural gas requirement through domestic allocation by the GOI under the Administered Pricing Mechanism (APM). The domestic gas being the cheapest comes with an advantage of price stability as compared to all other available sources. As per MoP&NG guidelines, APM / Non-APM gas is supplied for only to the priority segments, namely, CNG (transport) and D-PNG. The allocation of domestic gas to MGL/ any other CGD entity is based on the consumption of natural gas in D-PNG and CNG segments. APM gas prices are currently linked to the 10% of the monthly average of Indian Crude Basket and the price varies with change in crude oil prices. In FY 2024-25, APM ceiling price was at US$6.50/MMBTU. However, currently APM gas price is set at ceiling price of US$6.75/MMBTU.

New Well Gas

New Well Gas (NWG) from nomination fields of ONGC and OIL is allocated to MGL based on the consumption of natural gas in D-PNG and CNG segments, in accordance with prevailing MoP&NG guidelines. New Well Gas price priced at 12% of monthly average Indian Crude Basket price.

HPHT Gas:

While APM / Non-APM / NWG gas is allocated by MoP&NG in favour of CGD entities, such allocation is insufficient to cater to the demand of the priority segments. Under such circumstances, High Pressure High Temperature (HPHT) gas would need to be organized for commingling with domestic gas to cater to the demand of CNG and D-PNG segments. HPHT gas contract price is linked to Brent and JKM prices subject to ceiling price determined as per MoP&NG guidelines. Ceiling price is calculated using the landed cost of alternate fuels like fuel oil, weighted average import landed price of substitute fuels and LNG import landed price. In FY 2024-25, HPHT average ceiling price was at US$10.02/MMBTU. However, at present ceiling price for HPHT gas stands at US$10.04/MMBTU.

Term RLNG- Market Determined Price (MDP) Gas

The Term RLNG contracts are gas supply contracts witRs. 3-5 years period linked to brent /JKM/ Henry-Hub indices and are crucial for ensuring supply security and stability. In order to obtain a balance mix in the portfolio and for better price stability as well as security of supplies, MGL has executed term agreements with various suppliers where the price of gas is linked with different benchmarks to meet the requirement of other than priority sectors like industrial or commercial PNG and also for any shortfall in D-PNG and CNG segments.

Spot RLNG

To cater to peak requirement and fluctuation in demand, MGL sources Spot RLNG through Spot market purchases, or through Gas Exchange platform such as IGX. At present, MGL has entered into Framework Agreements / Term Sheets for Spot RLNG supplies with various suppliers across India.

To optimise our supply chain, we adopt a well-balanced gas sourcing strategy, blending Domestic, MDP gas with both Spot and Term RLNG contracts. This approach enhances price stability and ensures a reliable supply. We have established strong partnerships with major suppliers, including GAIL, IOCL, BPCL and others, formalised through Framework Agreements and Term Sheets, securing our supply chain for the future.

We also engage with industry associations such as Federation of Indian Petroleum Industry (FIPI) and Natural Gas Society

(NGS), subscription services like Bloomberg etc which offer valuable insights into market trends, regulatory developments and emerging technologies. These resources are important in enhancing resilience of our supply chain.

To further ensure cost competitiveness & reliability of spot supplies, we issue monthly tenders for Spot RLNG, either on a Reasonable Endeavour or Firm basis, allowing for greater flexibility. Our close collaboration with our suppliers & use of data analytics allows us to accurately forecast demand, plan for seasonal variations and uninterrupted supply. To streamline operations further, we execute Gas Sales and Purchase Notices (GSPN) with selected suppliers, ensuring seamless transactions under the Framework Agreements and Term Sheets.

LNG Sourcing for Automotive Sector

MGL is sourcing LNG through long term contract for supply to automotive sector at a competitive price for its LNG station at Savroli. Further Mahanagar LNG Private Limited (MLPL), a JV between MGL and Baidyanath LNG Private Limited is sourcing LNG through long term contract for supply to automotive sector at a competitive price for its first LNG station at Sambhaji Nagar. This long-term contract will also be suitably amended to further facilitate LNG supply for MLPLs upcoming LNG stations ensuring uninterrupted and steady operations.

Segment-wise Overview Automotive Segment (CNG)

The Company had 385 CNG stations at the end of FY 2025. In the Raigad area, it has established 65 CNG stations till end of FY 2025.MGL caters to around ~10% of commercial vehicles which are on CNG in its area of operation. In FY 25, the Company achieved the historically high CNG volume growth of ~11%. This growth was driven by increased adoption of CNG vehicles due to auto manufacturers expanding their CNG vehicle lineup, with the number of CNG models in passenger vehicles doubling from 11 (2018) to 25 in FY 2025, increase in CNG stations thereby ensuring ease of fuelling & Sales promotion undertaken by your company.

During the year under review, the Company launched "CNG Mahotsav 2.0" offering fuel card incentives for commercial vehicles to reduce the price gap between diesel and CNG vehicles, making CNG adoption financially attractive. It is also focusing on expanding exclusive stations in GA3 (Raigad), where 50%+ of the network is already exclusive. The Company has achieved the highest number of LOIs/ Approvals for OMC ROs for setting up CNG stations in FY 2024-25.

Domestic Piped Natural Gas (D-PNG) Segment

At the close of FY 2025, your Company established connectivity for ~2.83 million households with total length of Steel and PE pipelines reaching over 7,460 Km. In the Raigad geographical area, till FY 2025, MGL has connected 95,714 domestic households.

During the year, MGL launched ‘Khushiyaan Lakhon Ki Campaign to increase PNG adoption in gasified buildings with lucky draws and incentives. SRA (Slum Rehabilitation Authority), LIG (Low- Income Group), Mhada and Pradhan Mantri Awas Yojana flats

were also targeted for affordable PNG solutions. Monthly PNG registrations surged from 2,000 to 8,000 during the year, indicating a 3X-4X increase.

MGL partnered with builders in Badlapur, Amarnath and Taloja to install PNG connections in unsold flats to boost adoption. PNG adoption in Raigad has increased, with pipelines being laid in Mahad, Vile Bhagad, Roha and JNPT. Restaurants, bakeries, hotels and hospitals have been a key focus area for the Company due to their high PNG consumption.

Mumbai Metropolitan Regions Bakery Industry: Potential for PNG adoption

The bakery industry in the MMR is a vital part of the citys food ecosystem, encompassing approximately 628 registered bakeries and potentially many more unregistered entities. These bakeries are small-scale enterprises with majority operating single unit. The sector uses diverse types of fuels ranging from traditional wood-fired operations to modern establishments using electricity or gas.

Fuel usage patterns indicate significant reliance on wood, witRs. 47% of surveyed bakeries using it as their primary fuel. This has considerable environmental consequences, contributing ~3,200 kg/day of particulate matter (PM), which accounts for 3.5% of Mumbais total PM emissions.

In January 2024, the Bombay High Court ordered all bakeries in MMR to transition from wood-fired ovens to cleaner fuels like PNG or electricity mitigate air pollution caused by wood-burning bakeries.

The industry has responded with concerns including inadequate pipeline access, technical difficulties and financial constraints leading to slow adoption of PNG in this sector.

To address these challenges, MGL has implemented supportive measures including waiving security deposits for PNG connections and offering to bear infrastructure costs.

The successful implementation of this transition would not only reduce Mumbais air pollution but could also serve as a model for similar initiatives in other sectors and cities, potentially accelerating the broader adoption of natural gas as a cleaner fuel throughout Indias urban centres.

Industrial and Commercial Segment

MGLs Industrial and Commercial (I&C) segment demonstrated robust performance during FY 2024-25. The Company witnessed a significant increase in I&C volumes, growing from 0.50 MMSCMD in the previous year to 0.62 MMSCMD, representing an increase of 24%. This growth can be primarily attributed to the addition of 450 new industrial and commercial customers in FY 2025, increasing the I&C customer base to ~5,100 (as of March31, 2025). Addition of new customers has bolstered MGLs market presence and contributed to the Companys commitment to promoting cleaner fuel alternatives across various industries & commercial establishment.

Automotive Segment (LNG)

LNG is suitable for long-haul trucking due to higher energy density compared to CNG, enabling longer range. As diesel is the mainstay of trucking in India, LNG not only offers lower fuel costs but also lower emissions. MGL is steadily strengthening its presence in the LNG sector through its joint venture, MLPL. As a result, the first LNG station of MLPL has been commissioned in Aurangabad, Maharashtra in October 2024, touching daily sales of 4.5 tons. The second station at Seoni, MP of MLPL was mechanically completed in the current FY & commercial sales is expected to start soon.

The Company is planning to commission few more stations in the FY2025-26, which will be strategically located on the industrial belts and major transportation corridors, to ensure easy accessibility thereby maximising adoption. The planned locations are Bhiwandi, Amravati, JNPT, etc. Concurrently, MLPL is also collaborating with major OEMs to promote LNG-powered commercial vehicles while deeply engaging the Fleet owners.

Meanwhile, LNG sales at the Companys Savroli station have shown steady growth, reaching a peak sales volume of 4.6 tonnes per day. These consistent efforts position MGL as a significant contributor in transition to cleaner fuels, reducing diesel dependency and supporting Indias sustainability goals. It is also worth mentioning that MGL is the first user of made in India LNG trucks.

LNG as virtual pipeline solution for supply of PNG/CNG in non gassified areas

LNG stations/units can be set up in non-gasified areas of MGL authorised areas to supply PNG/CNG. Several MIDC areas/ Industrial and Commercial establishments where NG pipeline has not reached, the gas supply issue can be addressed with the LNG expertise of MGL & its partners. This will lead to a breakthrough in volume growth for MGL & its associate companies. The Company had initiated dialogue with one of major Industries to supply Natural gas with LNG facility in Mahad MIDC. This can be replicated to many non-gassified areas & MGL is identifying & preparing long-term plans to address such potential areas.

MMR: Infrastructure Development throughout FY 2024-25 Roads

The Mumbai Metropolitan Regional Development Authority (MMRDA) has allocated ~ RS. 42,000 Cr. for infrastructure projects in its 2024-25 budget¹⁰. This demonstrates a strong commitment to urban development and connectivity enhancement in the region. The Key projects undertaken by MMRDA are :

1. Thane-Borivali Twin Tube Tunnel: A Twin Tube tunnel witRs. 3+3 lane Highway Tunnel connecting Thane and Borivali.¹¹

2. Orange Gate to Marine Drive Underground Tunnel: A

6.5 km twin-tube underground tunnel aimed at reducing traffic congestion in South Mumbai¹².

3. Thane Coastal Road: A 13 km road connecting Kharegaon toll naka to Gaimukh at Ghodbunder.¹³

4. Chedda Nagar-Ghatkopar to Thane Eastern Freeway Extension: I 3,140 Cr. allocated for this project to improve connectivity between Mumbai and Thane.¹⁴

The Brihanmumbai Municipal Corporation (BMC) has recently completed Phase - I of coastal road in Mumbai connecting Bandra Worli Sea link to Marine drive is in process of completing Phase - II of the coastal road. BMC has also allocated RS. 3,000 Cr. for concretising ~700 Km roads in Mumbai in its 2025-26 budget.¹⁵

These infrastructure initiatives are expected to significantly improve connectivity, reduce traffic congestion and drive demand for Road transport in MMR.

Housing Development in MMR:

- To address growing residential needs, MMRDA is spearheading several significant housing development initiatives like Ramabai Ambedkar Nagar Slum Redevelopment in Ghatkopar will rehabilitate approximately 16,575 slum dwellers across 33.15 hectares of land, clearing land for the extension of the Eastern Freeway to Thane and generating approximately 5,000 extra flats for MMRDA.¹⁶

- Additionally, MMRDA is also implementing a Rental Housing Scheme across MMR (except Navi Mumbai Municipal Corporation and Matheran Council) by clearing 44 Rental Housing proposals, generating ~ 38,000 Housing Units.¹⁷

As part of our ongoing efforts to expand piped natural gas (PNG) accessibility across the Navi Mumbai, MGL is actively collaborating with the City and Industrial Development Corporation (CIDCO), which is currently developing mass housing projects to accommodate approximately 70,000 households.

During the year, MGL engaged in several rounds of discussions with CIDCO officials and submitted a draft Memorandum of Understanding (MoU) outlining the proposed development of PNG infrastructure in these mass housing complexes.

The MoU, which is presently under review by CIDCO, covers nearly 68,000 households — both existing and under construction — across key nodes such as Taloja, New Panvel, Vashi, Kalamboli, Navade, Bamandongri, Mansarovar and other regions.

Out of the total, approximately 25,000 tenements are ready for occupancy. MGL plans to prioritize the rollout of PNG infrastructure in these areas, enabling early access to a clean and efficient energy source. This initiative reinforces our commitment to accelerating city gas distribution and supporting sustainable urban development in partnership with key urban planning authorities.

The Maharashtra Housing and Area Development Authority (MHADA), established under the Maharashtra Housing and Area Development Act of 1976, plays a pivotal role in providing affordable housing solutions across the state with special focus on Mumbai. It coordinates and oversees the functioning of seven regional housing boards-Mumbai, Konkan, Pune, Nashik, Nagpur, Amravati and Aurangabad- as well as two special-purpose boards: the Mumbai Building Repairs and Reconstruction Board and the Mumbai Slum Improvement Board.

Each year, MHADA constructs approximately 3,000 to 5,000 flats in the Mumbai region, with numbers varying based on budget allocations and project plans. In line with efforts to enhance the quality of life for residents, MGL is in active discussions with MHADA to provide PNG (Piped Natural Gas) infrastructure in new housing projects, ensuring that occupants can avail the benefits from the date of possession.

These developments indicate a strong focus on addressing housing needs across various segments in MMR. As a result, it is anticipated that there will be an uptick in demand for PNG connections in the region. ^{10 11 12 13 14 15 16 17}

To address demand emanating from such Low-income group housing, MGL has launched many customised schemes for PNG connections

Automotive Segment (EV)

The traction witnessed in the adoption of electric vehicles in last mile delivery and passenger segments and considering the Governments push for EV, it is imperative that MGL, being an energy distribution company and a flagbearer of greener fuel, encourages and nurtures such transition.

MGL has established a joint venture with International Battery Company Inc, a company based out of US, to setup prismatic NMC chemistry Li-ion cell manufacturing facility at Bengaluru. The project is being implemented in two phases, with the first phase expected to be operational by the first quarter of 2026 and the second by the first quarter of 2027. The facility aims to scale up production to 5 GWh by 2030 and explore new technologies such as solid-state, sodium-ion and LFP/LFMP batteries.

10https://www.mmrda.maharashtra.qov.in/sites/defauLt/fiLes/2024-03/mumbai_metropoLitan_reqion_deveLopment_authority_s_annuaL_budqet_for_2024- 25 compressed.pdf

11https://mmrdq.mqhqrqshtrq.qov.in/proiects/infrqstructure/miLqn-rqiL-over-bridqe/overview

12https://indiqninfrqstructure.com/2025/02/24/mmrdq-secures-Loqn-for-orqnqe-qqte-mqrine-drive-underqround-roqd-tunneL-in-mqhqrqshtrq/

13https://www.hindustqntimes.com/cities/mumbqi-news/mmrdqs-pre-poLL-bonqnzq-9-infrq-proiects-worth-12-5k-crore-101725562931670.htmL

14https://www.constructionweekonLine.in/proiects-tenders/mmrdq-qcceLerqtes-construction-of-eqstern-freewqy-extension

15https://indianexpress.com/articLe/cities/mumbai/roads-concretised-bmc-3111-crore-compLete-proiect-9817673/

16https://indianexpress.com/articLe/cities/mumbai/14k-famiLies-found-eLiqibLe-mmrda-ramabai-naqar-redeveLopment-proiect-9462151/

17https://mmrda.maharashtra.qov.in/division/rentaL-housinq/overview

Additionally, MGL has acquired ~31% stake in 3EV Industries Pvt. Ltd., an electric 3-wheeler cargo and passenger vehicle manufacturing company based out of Bengaluru. This positions MGL as one of the key players in supporting the transition of the mobility sector to greener alternatives. Further, the shift from traditional fossil fuel like MS/HSD to EV will happen first, whereas CNG segment is expected to continue growing.

Key Business Highlights

The Company has made notable progress in expanding its operations and diversifying its portfolio during the period under review. It acquired three additional land parcels for setting up City Gate Station (CGS) facilities in the GA-3 area. Two CGSs are likely to be commissioned in FY2025-26 which will result in not only saving substantial cost of CTV transport but will also reduce the dependence on the lone CGS of GA-3 at Savroli & ensure elimination of Dry outs in the DBS stations of GA-3.

In South Mumbai, MGLs presence either through its own exclusive outlets or OMC outlets was not adequate to serve CNG customers. With continuous efforts, your company managed to secure two large plots on long-term leases from Mumbai Port Authority on the crucial P Dmello Road which is not only crucial link to south mumbai but also serves as main road for commercial vehicles traffic to Mumbai Port as well as connects the Mumbai Trans harbour link to Mumbai. Commissioning of these two large format CNG stations will address the gap of CNG availability in South Mumbai.

In the competitive transport fuel market, your company continues to maintain a competitive edge by offering CNG at ~50% discount compared to petrol and ~16-18% discount to HSD.

The year under review also witnessed a significant milestone of crossing 100 exclusive MGL-branded CNG stations, increasing its footprint and customer reach. Now your company has 111 exclusive MGL-branded CNG stations as on March31, 2025, enhancing brand visibility. It also co located CNG in Jio BPs 5 outlets in this FY adding one more partner amongst Oil Marketing companies.

Further improving operational efficiency, MGL implemented ‘Empower application for dealer management across all Company-Owned Company-Operated (COCO) and Dealer-Owned Dealer-Operated (DODO) stations. The Company added three mother station facilities at private CNG retail outlets to ensure uninterrupted CNG supplies to its +100 Daughter Booster Stations.

In the CNG segment, your company added 40 new CNG filling stations with offtake during the year reaching 2.8 MMSCMD.

Building on the success of the 1^st CNG Mahotsav, MGL launched CNG Mahotsav 2.0, a more refined initiative aimed at promoting the adoption of CNG as a cleaner and economical fuel.

This year, the CNG Mahotsav 2.0 laid focus on the commercial vehicles with a Gross Vehicle Weight (GVW) of 3.5 tonnes and above. The initiative commenced in September 2024 for retrofitted vehicles and in October 2024 for new CNG vehicles. OEMs viz. Ashok Leyland, Tata Motors Ltd. and VE Commercial Vehicles Ltd. wholeheartedly participated in the CNG Mahotsav. Additionally strategic collaborations were established with top CNG kit manufacturers and distributors, such as Shigan Telematics Pvt. Ltd. and Amol Prala Clean Energy Pvt. Ltd., to promote high-quality retrofitment of the diesel commercial Vehicles for CNG usage.

The CNG Mahotsav 2.0 offered compelling incentives for transporters to opt for CNG vehicles. Incentive upto RS.3,50,000 worth of free CNG was offered for the purchase of a new CNG vehicle and an equivalent discount for retrofitting a diesel vehicle to CNG. During the scheme period, OEMs witnessed a 100% increase in the monthly average CNG vehicle sales.

This initiative is a key step in strengthening the transport sectors confidence in CNG as a viable, environmentally friendly alternative, encouraging the expansion of cleaner and greener commercial fleets.

To motivate the CNG dealers while ensuring compliances of various safety & commercial guidelines, your company organised dealers meet covering new and established CNG dealers and COCO operators. The top performing dealers were awarded in various categories & interactions of the dealers with management of your company was very fruitful & motivating for the dealer network. For enrolling new CNG dealers, MGL streamlined & introduced a simplified and customer-friendly application process for new CNG dealerships, available in both English and Marathi.

During the year, the Company expanded its total PNG connectivity to ~2.83 million. Parallelly, PNG offtake stood at 1.17 MMSCMD, registering a growth of ~15% YOY. These initiatives collectively

underscore MGLs commitment to growth, operational excellence and customer satisfaction, while simultaneously expanding its footprint in the clean energy sector.

Unison Enviro Private Limited (UEPL), a CGD entity was taken over by your company in Feb 2024 & its now a wholly owned subsidiary. Its worthwhile to mention that in its 5 years of existence prior to MGLs takeover, UEPL had Constructed only 53 CNG stations but Post takeover, UEPL has added 29 CNG stations till FY 25, taking its station count from 53 to 82. The Company has also added 12,000+ new PNG connections during the year.

The increase in CNG stations, Pipeline length as well as PNG connection has resulted in ~40% increase in sale volume to

1,82,000 SCMD in FY25. During the year, UEPL has achieved highest industrial sales touching 20,000 SCMD.

Under its joint venture with International Battery Company, Inc., the Company plans to develop solid-state, sodium-ion and LFP/ LFMP battery chemistries, ensuring that it remains at the forefront of battery innovation. MGL has committed to invest I 385 Cr. in the JV for setting up of the giga plant at Bengaluru. These initiatives are in accordance with MGLs long-term vision of becoming a diversified energy player, with the objective of achieving 25% of revenue from new businesses within the next 5 years.

Strengths

1. Dominant Market Position

MGL has established a strong foothold in Indias most economically vibrant region, the commercial capital of the country & its satellites like Thane & Navi Mumbai. The Companys operations span across Mumbai, Urban Thane and Raigad, covering an impressive 8,372 sq. km. Following the strategic acquisition of UEPL, MGL has broadened its operational remit to include Ratnagiri, Latur - Osmanabad in Maharashtra and Chitradurga & Davanagere in Karnataka, thereby significantly adding geographical area under operation by ~ 37,400 sq. km.

MGLs extensive network ensures widespread accessibility and reliability of gas supply across its operational areas. The acquisition of UEPL has further bolstered MGLs infrastructure as the Ratangiri GA is contiguous to MGLs Raigad GA which will result in substantial saving going forward, enhancing last-mile connectivity in semi-urban and rural geographical areas (GAs).

In terms of market share, MGL strives to enhance volume growth aggressively in the CNG segment. Further, the Companys sales volumes represents significant YOY growth, highlighting MGLs project execution process, operational efficiency, tailor made marketing campaign and digital interventions which not only increased the overall natural gas requirement but helped in effective management of such demand.

2. Strong Financial Metrics and Profitability

MGLs financial performance in FY2024-25 has been exceptional, demonstrating the Companys financial prudence and adeptness in generating substantial profits. Net profit stood at RS. 1,045 Cr. & EBITDA of RS. 1,510 Cr. These figures indicate MGLs efficient natural gas sourcing strategy, operational efficiency, strategic decision-making and ability to control costs, even while expanding its operational reach.

MGLs liquidity position remains strong, with a current ratio of 1.03 (current assets: RS. 1891 Cr. vs. current liabilities: RS. 1840 Cr.). This ensures that the Company can comfortably meet its short-term obligations, while maintaining sufficient resources for both ongoing operations and future investments.

3. Strategic Diversification Initiatives

The key to success lies in keeping an eye on the future. MGL has structured its business model to capture the emerging opportunities in the energy sector. The Company

has entered into a joint venture with Baidyanath LNG Private Limited to build LNG stations for long-haul trucks. Apart from promoting cleaner freight transportation, this strategic move positions MGL to capitalise on the rapidly growing LNG trucking in India.

Further, MGL has acquired a stake in 3EV Industries, a threewheeler EV original equipment manufacturer (OEM). This investment allows MGL to participate in the last-mile logistics segment, particularly in e-commerce delivery vehicles, which are increasingly adopting electric powertrains.

The EV adoption across the mobility sector is increasing rapidly, witRs. 2-wheeler leading the pack. While battery packs are manufactured in India, battery cells being a major component, are currently being imported, leaving a white space for local manufacturing of such cell. MGL joining hands with International Battery Company for manufacturing of lithium-ion cells in India would be a big leap forward in serving the energy requirement of the e-mobility segment.

4. Safety and Operational Excellence

MGL drives exceptional operational performance and upholds a strong commitment to safety. The Company serves an impressive customer base of ~2.83 million domestic PNG connections and ~5,100 industrial and commercial customers, ensuring a stable revenue stream and opportunities for future growth.

Notably, MGL has maintained an impeccable safety record, with Zero Loss Time Injury (LTI) for FY 2024-25. This achievement reflects the Companys commitment to maintaining the highest safety standards in its operations, which is crucial in the gas distribution industry.

Weaknesses

1. High Capital Intensity and Infrastructure Development Challenges

While MGLs extensive infrastructure underscores the companys scale and commitment to long-term development, it also requires considerable capital investment, sans the complexity attached to execution of project in one of the most urban and densely populated region where long monsoon requires infrastructure rollout within limited time-period. The company invested RS. 1,023 Cr. in FY2024-25 for pipeline expansion and station development; further, it plans to add 200 CNG stations and 180+ kms of pipelines by 2029, requiring more capital.

Additionally, the Company has faced delays in pipeline rollout, particularly in the Raigad area, due to delayed laying permissions. These delays impact expansion plans and increase operational costs.

MGL is continuously advocating with the concerned civic body for timely release of required approvals including facility of a single window clearance for seamless project execution.

2. Dependence on Domestic Gas Allocation

While MGL benefits from APM gas allocation, this also represents a potential vulnerability. The Company relied on domestic gas to meet approximately 65% of its demand, while the remaining 35% is sourced from imports in the FY 202425. This approach exposes MGL to volatile international LNG prices, with the fluctuations ranging between $ 12 and $ 14/MMBTU in the review year. Profitability can be gravely impacted on account of any significant reduction in domestic gas allocation or sharp increase in international LNG prices.

MGL continuously scans and monitors the LNG price trends across indices and based on current long term price visibility, adopts a portfolio strategy of spot and term contracts for optimized sourcing of natural gas.

3. Land Avaliability

Mumbai, the commercial capital of India, faces significant challenges in expanding infrastructure to accommodate growing energy needs, particularly in the setting up of Compressed Natural Gas (CNG) stations. This challenge stems from a combination of factors, including land scarcity, exorbitant prices, land use reservations, encroachments, applicability of CRZ, NDZ/SEZ norms etc. Land use in Mumbai is governed by the Development Control and Promotion Regulation (DCPR) under the Brihanmumbai Municipal Corporation (BMC). These regulations restrict the types of developments including setting up of CNG fueling stations in different zones.

MGL is consistently working with Govt. of Maharashtra (GoM), BMC, Mumbai Port Authority (MbPA), State Transport Undertakings (STUs) and other Govt. agencies like MMRDA, CIDCO, MIDC, MSRDC, etc., to address such challenges and facilitate land availability for setting up CNG stations to meet the natural gas requirement of the citizens.

4. Geographic Concentration Risks

Despite recent expansions, MGLs revenue remains heavily concentrated in the Mumbai and Thane regions. Approximately 90% of the companys natural gas volume is derived from these areas, while new geographical areas such as Raigad and those acquired through UEPL contribute

to a mere 10% to the overall gas volume. This concentration exposes MGL to regional economic fluctuations and potential regulatory changes specific to these areas.

A significant chunk of the total capex is deployed to lay infrastructure in Raigad district and UEPL GAs. GA3 comprising of Raigad district is poised for significant economic growth with the upcoming of a new International Airport at Navi Mumbai. Additionally, the district has been identified for development of Mumbai 3, a plan which will transform this region into an urban area, requiring sizable volume of natural gas to meet its energy requirement, thereby steadily bringing down the disparity in sales in the three geographical areas and earmarking of this area for Mumbai 3.

5. 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.

MGL proactively follows up with civic body for timely release of approvals for faster rollout of infrastructure within the limited available time-period. Additionally MGL has also been trying to work around the constraints by using advocacy as a tool to mitigate operations constraints. A case in points is recent success in getting advance permissions from BMC & Traffic Police. Earlier, the Permission window used to open on 1^st October every year & the actual work used to start only by end October /November beginning after receipt of Demand note, its payment & followed by Traffic police permissions. Through continuous interactions & advocacy, MGL managed to convenience BMC as well as Traffic Police to agree to issue the work permission in advance enabling MGL to start the work from 1^st October itself.

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Opportunities

1. CGD Expansion

Between 2025 and 2032, the country is projected to add ~15 million new residential gas connections annually, resulting in a total of ~126 million household connections by 2032. The number of CNG filling stations is anticipated to increase by ~1,400 every year during the same period. This expansion will lead to over ~18,000 CNG stations operational across India by 2032, further supporting the countrys transition to cleaner fuel alternatives.

The acquisition of UEPL has presented new geographical areas measuring ~37,400 Sq Km for MGL with significant growth potential in Maharashtra & Karnataka covering Ratnagiri, Latur Osmanabad & Chitradurga/Davanagere. MGL can leverage its brand equity and operational expertise to increase market penetration, targeting industrial customers in these regions.

2. Policy Tailwinds and Infrastructure Investments

The Indian government targets to increase the share of natural gas in the countrys energy mix to 15% by 2030 (from 6%) which is expected to drive significant investments in LNG infrastructure. The International Energy Agency (IEA) projects $67 billion in LNG infrastructure investments in India by 2030. This presents opportunities for MGL to partner with national entities and international players for projects, further strengthening its position in the gas value chain.

The increase of Natural Gas in energy mix has to happen through the CGD route through greater adoption of natural gas by the Industrial, Commercial, Mobility and household sector. Enabling policies such as mandatory use of D-PNG by customers in gasified buildings, mandatory D-PNG connect in new buildings, discouraging use of diesel vehicles in cities, reduction in excise duty on CNG, reduction of tax on CNG vehicles, development and implementation of state CGD policy can help achieve the governments targeted share of NG by 2030.

Additionally, increased Government Capex in infrastructure development including roads and highways is expected to translate into elevated commercial freight movement. With operationalisation of Navi Mumbai airport and development of Mumbai 3 due to Mumbai Trans harbour Link operationalisation & Navi Mumbai International airport, the economic activity at Navi Mumbai and Raigad area is expected to grow manifold, leading to rapid infrastructure development and urbanization in the coming years.

Recent court rulings and policy mandates are also expected to drive CNG and PNG adoption. A recent Bombay High Court ruling not only mandates commercial establishments (Bakeries) in Mumbai to switch to PNG but also formed a committee to phase out Diesel Fueled vehicles from MMR which may push CNG & PNG growth for MGL.¹⁸

3. LNG for Long-Haul Mobility

The Indian government is aiming to convert a third of the nations long-haul heavy-duty vehicles to LNG in the next five to seven years, creating a substantial new market for natural gas consumption. MGLs joint venture with Baidyanath LNG, MLPL positions the Company to capture an estimated 15-20% market share in key corridors such as Mumbai-Pune, Mumbai-Nashik & Mumbai Nagpur in the newly opened Samruddhi Mahamarg. By leveraging its existing infrastructure and expertise in gas distribution, MGL can establish a strong presence in this growing segment.

4. Expansion of Industrial and Commercial PNG Segment

With the governments push for cleaner industrial fuels, MGL has the opportunity to expand its industrial and commercial PNG customer base. The Company can target small and medium enterprises in its operational areas, offering a cleaner and potentially more cost-effective alternative to traditional fuels. This expansion can be supported by tailored marketing campaigns, flexible pricing strategies and value-added services to attract and retain industrial customers. The commercial sector also presents a significant opportunity for natural gas adoption. LPG enjoys more popularity as compared to piped natural gas, however, it is anticipated that natural gas could fully replace commercial LPG usage by 2030.

5. Bio-CNG from Municipal Waste

MGL has entered into a MoU with the Brihanmumbai Municipal Corporation (BMC) to process 1,000 tonnes per day of municipal waste into Bio-CNG. This initiative not only contributes in reducing landfill emissions but also has the potential to secure 5-8% of MGLs gas supply locally. By expanding this project, MGL can promote environmental stewardship, reduce dependence on imported LNG and meet the GOIs compulsory blending obligations.

6. Digital Transformation and Operational Efficiency

MGL embraces advanced digital technologies to enhance operational efficiency and customer experience. The Companys MGL Connect 2.0 app, which has over 500,000 downloads, can be further developed to include features such as real-time CNG queue tracking and online PNG registration. Reduction in queue time through expansion of CNG stations and technological integration would increase convenience for the customers and promote conversion to CNG. By investing in smart metering, AI-powered demand forecasting and blockchain for supply chain management, the Company can optimise its operations, reduce costs and improve customer satisfaction.

Threats

1. APM Gas Allocation

In the coming years, production from legacy gas fields is projected to further reduce the availability of Administered Pricing Mechanism (APM) gas—which is priced by the government and predominantly allocated to the CNG and Domestic PNG (D-PNG) segments.

APM gas may meet an increasingly smaller proportion of total demand of priority segment, leading to higher blending of costly market price gas like New well gas, High Pressure High Temperature (HPHT) gas & RLNG. To bridge the gap, MGL may need to rely more heavily on costlier alternative gas sources, such as: New Well Gas allocation, Gas from HPHT fields and Long-term contracts linked to global price benchmarks. These higher-cost sources could adversely impact profit margins and challenge efforts to maintain price stability for end consumers.

In response, MGL is proactively diversifying its gas sourcing portfolio to reduce reliance on APM allocations. As part of its strategic approach, the company is securing long-term gas supply contracts with multiple suppliers. This initiative is aimed at strengthening supply security and ensuring a consistent and reliable supply of natural gas to customers, while maintaining price stability.

2. LNG Price Volatility

In addition to APM gas supplies, your company has to rely on imported LNG to meet part of CNG demand as well as for almost entire demand of Industrial & commercial segment. The spot LNG market is subject to significant price fluctuations, impacting profitability, especially if the Company is unable to pass on price increases to end-consumers.

To effectively meet such volatility of LNG price in spot market, your company takes a portfolio approach to source its LNG demand through Term & spot contracts thereby optimising overall cost of imported LNG.

3. Regulatory Volatility

The potential expiry of both marketing and infrastructure exclusivity of Mumbai and Greater Mumbai poses risks for the Company in terms of MGL offering 20% of its pipeline capacity on a common carrier basis in case of expiry of marketing exclusivity and allowing other entities

to lay and operate natural gas distribution networks in the same geography in case of expiry of infrastructure exclusivity. The expiry of exclusivity rights introduces the risk of increased competition, which could impact MGLs competitiveness and margins.

However, as a company we have challenged both the marketing and infrastructure exclusivity on core legal principles which the regulator has missed out while notifying the Authorisation Regulations and other connected regulations like Transportation Tariff and the Guiding Principles Regulations. We have also given our representation before the PNGRB wherein we have given our views on how the exclusivity can be opened while protecting the interest of the Company. Our matter is currently pending disposal before the Delhi High Court, wherein the court is seized of the matter.

In the event of loss of marketing exclusivity (which will also be applicable to other CGDs), MGL will still get the transmission tariff on the 20% of the pipeline capacity which may be used by other CGD entities. On the other hand, MGL will also have the opportunity to venture out in other CGDs GA for its growth.

4. EV Disruption in CNG Segment

The rapid advancement of EV technology poses a significant threat to MGLs core CNG business. The total cost of ownership (TCO) for EVs on the back of Government subsidies is likely to pose significant challenge for Passenger cars as well as 2/3 wheelers going forward especially due to falling battery costs.

In the three-wheeler segment, which is a key market for CNG, MGL is likely to experience tough competition due to the adoption of e-rickshaws. As EV technology improves and charging infrastructure expands along with falling battery cost, this trend could accelerate potentially impacting CNG market share. However, the Companys diversified strategy, with investment in the EV battery segment, allows it to ameliorate the threat of EV competition.

5. Infrastructure Bottlenecks

The growth of Indias natural gas sector, including MGLs expansion plans, could be constrained by infrastructure bottlenecks. The countrys current LNG regasification capacity stands at 52.7 MMTPA, however, demand for natural gas is expected to rise by 60% by 2030. To meet the projected demand, the nation is investing in LNG infrastructure with a number of projects under construction or in planning stages.^{19 20}

Mergers and Acquisitions

Strategic partnerships play as a crucial role in building strong organisations. The Company aims to build strong alliances to tap the future growth opportunities as well as to hedge the decline.

The Companys joint venture with International Battery Company, Inc. will help establish MGL as a multi-faceted energy provider in the years to come. The joint venture aims to capture the demand generated by the increasing adoption of EVs by exploring new technologies in energy storage solutions.

The Companys joint venture with Baidyanath LNG provides increased security within its supply chain, whereas the acquisition of Unison Enviro Private Limited, a CGD with three geographical areas, extends operational reach and improves natural gas accessibility for consumers. At the end of FY 2025, Unison Enviro Private Limited had 82 CNG stations while cumulative household connections were

39,000 and industrial and commercial customers were 66.

MGL is steadily exploring new opportunities and leveraging synergies to ensure long-term business sustainability.

New Business

Compressed Biogas (CBG)

MGL has made significant progress in its Compressed Biogas (CBG) initiatives, actively pursuing opportunities within its authorised Geographical Areas (GAs) while also exploring expansion in new regions too. As part of this strategy, MGL has entered into a MOU with Brihanmumbai Municipal Corporation (BMC) to set up one of the largest CBG Plants in India based on municipal Solid Waste MSW) in Deonar Mumbai with a Source Segregated Organic MSW processing capacity of 1000 Tonnes Per Day (TPD). Maharashtra State Cabinet has accorded the approval for leasing of land at concessional rate to MGL in May 2025 through a cabinet decision for setting up the CBG project at Mankhurd and Deonar landfill area using the Bio-methanation technology. As per GR (Government Resolution) issued on May 28, 2025, total 18 acres of land will be leased to MGL.

Further, Company intends to increase its CBG footprints and replicate the model in other Municipalities offering a significant potential in the CBG sector. MGL has signed a MOU with City Corporation of Davanagere to establisRs. 150TPD CBG plant again based on MSW. Additionally, MGL is also exploring collaborations with other players and stakeholders to set up the CBG Plants on alternative feedstocks viz. Napier Grass, Press Mud, Cow Dung etc. These initiatives are in line with Indias broader goals of lowering the greenhouse gas (GHG) emissions, promoting a

circular economy, reducing fuel imports and improving the waste management practices.

Through these efforts, MGL is poised to establish itself as a key player in Indias renewable energy landscape contributing to environmental sustainability and domestic biofuel production.

Renewable Energy

Indias renewable energy sector is poised for significant growth, driven by ambitious government policies, increasing investments,and a strong push for energy transition. The country has set a target of achieving 500 GW of non-fossil fuel capacity by 2030 with a focus on solar, wind, hydropower and green hydrogen. As of March2025, Indias total installed electricity generation capacity is approximately 475.21 GW. Renewable energy sources, including solar, wind, hydro and biomass, contribute about 220.10 GW to this capacity, representing approximately 46.3% of the total. To meet its ambitious target of 500 GW of non-fossil fuel capacity by 2030, India needs to double its annual additions of solar and wind capacity over the next five years.

MGL is taking a proactive approach towards renewable energy to support Indias clean energy goals. Your company is actively expanding its footprint in renewable energy, starting with a 6.5 MW plant to meet the power requirement at COCO (Company- Owned, Company-Operated) CNG stations. Going forward, MGL is in the process of developing its entry strategy in the renewable energy value chain.

Hydrogen

As part of companys diversification strategy, new and emerging energy sector is always prioritized above others.

Though green hydrogen is in its nascent stage, the company is exploring opportunities of developing use cases for CGD applications. A DFR is being prepared for setting up pilot facility to blend Hydrogen with natural gas for industrial and applications and to run Hydrogen powered FCEV buses.

Bases on positive outcome of the DFR, the company may set up small scale pilot facility by FY27.

Investor Relations

Investor Relations (IR) continues to play a pivotal role in your Companys corporate strategy, fostering transparency, trust and meaningful engagement with all stakeholders including shareholders, investors and analysts. The core objective of our IR initiatives is to ensure timely, accurate and consistent

communication, thereby enabling stakeholders to make informed decisions.

During fiscal year 2024-25, your Company remained committed to proactive and transparent engagement with the investor community. Key investor relations initiatives undertaken during the year include:

• Investors & Analysts Meet 2024: Our first in-person event post-IPO received an overwhelming response, with participation from over 50 unique organisations.

• Quarterly Earnings Call: Conducted promptly following the announcement of financial results to ensure timely communication with analysts and investors.

• Institutional Outreach: Participated in multiple one-on-one and group meetings with institutional investors and analysts, including office visits and virtual interactions as required.

• Global Roadshows: Investor engagement programs were conducted across Hong Kong, Singapore and the United States, reinforcing relationships with international investors and enhancing global visibility.

• Dissemination of Investor Presentations: Presentations were made available through stock exchanges and the Companys official website, ensuring equitable access to information for all stakeholders.

• Shareholder Participation at AGM: Continued facilitation ol speaker registration for shareholders, encouraging greater transparency and inclusiveness.

All investor interactions were led by members of the Senior Management Team, including the Managing Director, Deputy Managing Director, CFO and Marketing Head, thereby reflecting your Companys emphasis on accessible leadership and high- level engagement.

Additionally, your Company has maintained its track record of rewarding shareholders through consistent dividends, reaffirming its focus on long-term value creation. The strong trading volumes of your Companys shares reflect sustained investor confidence in its performance and strategic direction.

Your Company remains highly attuned to the evolving expectations of investors, including matters related to capital allocation, sustainable growth, corporate governance and risk management. In this regard, your Company continues to strengthen its investor engagement strategy with a forwardlooking approach rooted in innovation, performance and responsible leadership.

Your Companys investor-centric philosophy is rooted in its core values of accountability, integrity and sustainable value creation. Through continuous dialogue, transparent disclosure and disciplined execution, your Company strives to meet and exceed the expectations of the investor community.

Financial Overview Revenue from Operations

Revenue from operations During the FY 2024-25 the revenue from operations stood at Rs. 7,590 Cr.

EBITDA and EBITDA Margins

During the FY 2024-25, the operating EBITDA decreased by 18% to RS. 1,510 Cr. in comparison to RS. 1,843 Cr. in FY 2023-24. The EBITDA margin for FY 2024-25 is 21.81% as compared to 29.51% in the FY 2023-24.

PAT and PAT Margin

The Company registered a decreased in PAT by RS. 244 Cr. to RS. 1,045 Cr. in FY 2024-25 from RS. 1,289 Cr. during FY 2023-24. The PAT Margin for the FY 2024-25 is 15% as compared to 21% in FY 2023-24.

PBT

The Company registered a decrease in PBT by 21% to RS. 1,374 Cr. in FY 2024-25 from RS. 1,733 Cr. in FY 2023-24.

EPS

The Company recorded earnings per share of RS. 105.78 per share in FY 2024-25 as compared to RS. 130.50 per share in FY 2023-24.

Details of significant changes in the key financial ratios, along with detailed explanation thereof:

Sr. Ratios No.	March2025	March2024
1 Debtors Turnover Ratio (No. of times) (Net Credit Sales of natural gas /Average Accounts Receivables)	13.78	14.19
2 Inventory Turnover Ratio (No. of times) (Cost of Gas Sold/Average Inventory of Gas)	3,179	2,527
3 Current Ratio (No. of times) (Current Assets/Current Liabilities)	1.03	1.11
4 Operating Profit Margin (Operating Income - EBIT/ Revenue from Operations- Net)	21.81%	29.51%
5 Net Profit Margin (PAT/ Revenue from Operations- Net)	15.09%	20.64%
6 Return on Net worth (PAT/ Net worth)	18.94%	27.80%

a) Explanation for major change in Ratios as compared to the previous FY2024-25

Reduction in Operating Profit Margin, Net Profit Ratio and Return on Net Worth is mainly due to increase in gas cost due to reduction of APM allocation.

Increase in Inventory turnover ratio is due to increase in gas purchase price.

b) Disclosure of Accounting Treatment

Applicable Accounting Standards have been followed and there is no deviation compared to prescribed accounting standards.

Company OutlookJ

Mahanagar Gas Limited (MGL) will enter the fiscal year 202526 with a robust growth trajectory, supported by strategic infrastructure expansion and diversification initiatives. The companys highest-ever capital expenditure program focuses on developing CNG stations across various models and expanding its pipeline network by 200 km. This infrastructure push aligns with rising demand, as evidenced by total connectivity to 2.83 million customers and achieving over 1.17 MMSCMD domestic PNG volume in FY 2024-25.

MGLs geographic expansion strategy is already yielding results, particularly in GA3 (Raigad), which now contributes over 50% of newly commissioned CNG stations and has seen a 50% surge in PNG domestic connections. The acquisition of Unison Enviro Private Limited (UEPL) has further expanded MGLs footprint into new areas of Maharashtra and Karnataka, increasing its total area under operation to ~45,700 sq. km and positioning the company to serve a growing proportion of Maharashtras urban population and Karnatakas industrial corridors.

The Company is actively diversifying its portfolio to capture emerging opportunities in the energy sector. MGLs joint venture, MLPL formed to establish LNG stations for long-haul trucking, positions it to capitalise on the rapidly growing LNG trucking in India. MLPL has one operational station in Aurangabad, Maharashtra & one station at Seoni, MP was mechanically completed in the FY 2025. The company plans to commission four LNG stations in FY 2026 and targets 26 operational stations by 2030, with daily LNG sales expected to reacRs. 1,35,000 kg by 2030, potentially generating over RS. 1 Cr. in daily revenue.

Looking ahead, MGL anticipates continued growth in the CGD sector, driven by government initiatives to increase natural gas consumption to 15% of Indias energy mix by 2030 as well as compelling benefits of lower cost & lower emissions. There is an increasing likelihood that diesel vehicle restrictions will be imposed in major cities like Mumbai due to worsening pollution levels which could further accelerate CNG demand. To capitalise on this trend, the company plans to increase the number of outlets in underserved areas based on analytics-driven planning. This strategic expansion will help MGL meet the growing demand for cleaner fuel alternatives while optimizing its network coverage.

MGL is also making significant strides in technological advancements to enhance operational efficiency and customer experience. The company is exploring IoT (Internet on Things)- based dispensing systems to streamline fuel management, which could lead to improved service delivery and reduced operational costs. These initiatives, combined with MGLs existing digital transformation efforts position the company at the forefront of innovation in the CGD sector.

Solar panels have also been installed at selected offices, with electricity generation contributing to the grid. The company will assess further investment in solar and renewable projects based on the initial rollout.

As MGL navigates the evolving energy landscape, it remains cautiously optimistic about its ability to capitalise on emerging opportunities while managing potential risks. The companys strategic initiatives in LNG, EV infrastructure and renewable energy, combined with its strong market position in the CGD sector, position it well to contribute significantly to Indias decarbonisation agenda and drive sustainable growth in the years ahead.

Technology

MGL has significantly strengthened its IT security and compliance measures in FY 2024-25. While it has implemented Privilege Access Management (PAM) and Secure File Transfer Protocol (SFTP) to enhance data protection, it also conducts Vulnerability Assessment and Penetration Testing (VAPT) for critical applications and deployed automated capacity monitoring for servers. The BIS team has upgraded its ISO 27001:2013 certification to ISO 27001:2022.

To proactively counter cybersecurity threats, MGL is planning to deploy a Security Operations Center (SoC) to monitor, detect and respond to security incidents in real time. Further, the Company plans to implement Data Loss Prevention (DLP) mechanisms to prevent unauthorised sharing or leakage of sensitive business and customer data.

In compliance with the Digital Personal Data Protection (DPDP) Act, MGL has conducted a two-phase Data Privacy Infrastructure Assessment, establishing a Data Privacy Governance framework, appointing a Data Protection Officer and implementing robust privacy policies.

The Company also conducted organisation-wide Personally Identifiable Information (PII) discovery, assessed privacy risks and provided employee training. It also updated departmental privacy risk registers, evaluated Privacy Enhancement Technologies (PETs) and developed an internal audit framework aligned with DPDPA 2023.

These initiatives highlight MGLs commitment to data privacy, regulatory compliance and developing a securityconscious culture.

Digital Initiatives and Automation MGL Tez

MGL Tez App allows commercial vehicle operators to prebook fuel slots at designated BEST depots. This reduces wait times for the customers and alleviates manoeuvrability issues. This has been a boon for commercial vehicle owners of Mumbai.

Digital PNG Billing

As part of our ongoing commitment to sustainability and environmental protection, we have strengthened our Go Green initiative by promoting digital billing and reducing paper consumption. In just three months since the launch of our Go Green campaign, over 65,000 customers have already enrolled in paperless billing. To date, more than 1.5 Lakh customers have chosen to make the shift, helping us conserve approximately 100 trees annually. Building on this success, we are setting an ambitious goal to transition over 80% of our existing customers to digital billing starting from April 1, 2025. To encourage more customers to join the movement, we will be offering an incentive of RS. 10 per digital bill for the next six months to our existing customers. This transition to digital billing helps reduce our carbon footprint, minimize waste and enhance customer convenience. Additionally, by eliminating the need for physical bill delivery, we reduce people movement, thereby lowering emissions. Together, we are taking a significant step towards a greener and more sustainable future. We appreciate our customers continued support in making this initiative a success as we work towards a planet-friendly tomorrow.

App for Inside Kitchen Activity

MGL developed the Inside Kitchen Mobile App to enhance safety and improve ESG compliance during Last Mile Connectivity (LMC)

work. The app enables real-time safety audits, ensuring all necessary equipment is available before LMC activities begin. It digitises self-authorisation permits, eliminating paper usage and supporting the Companys ESG initiatives. The apps data analytics feature allows remote audits by supervisors, significantly improving compliance and operational efficiency.

MGLs Automation Journey

MGL has implemented Robotic Process Automation (RPA) to improve efficiency, reduce costs and optimise human resources. The first phase automated five critical business processes, resulting in savings of 6.5-7 FTEs, annual cost savings of RS. 30+ lakhs and a one-year payback period. This approach enhanced workforce productivity, witRs. 20-25% of employees assigned to the respective tasks, redeployed to higher-value tasks and enabled 24x7 operations. The key RPA implementations include duplicate bill processing, network monitoring, automated retrieval system, automated meter reading as well as SES and MIRO automation. It has successfully enabled to scale-up RPA across various departments. By enabling forecourt automation, it has integrated dispensing units with POS machines for automatic billing and digital receipts and also uses CCTV & AI to track vehicle footfall and hydrotesting compliance.

Story of a startup: By Mr. Vaibhav Kaushik, CEO Nawgati

Nawgatis real growth story began in 2022, when we teamed up with MGL for a pilot at the Khopat CNG station in Thane. Back then we were a $4 million startup testing whether our platform could truly quantify queues, identify fuelling bays, track attendants through uniform recognition, monitor every transaction and spot loyal customers. The pilot worked, the data proved it and it gave us the credibility to think bigger.

In 2023, we took that same toolkit to 15 MGL COCO stations. During this phase, we rolled out both the Nawgati Billing App and our plug and play ANPR module almost in parallel, piping dispenser data straight into the POS while automating vehicle identification and compliance checks down to seconds. For the CGD space it was a first, immediately tightening accuracy and setting a new bar for transparent CNG operations.

MGL kept pushing boundaries. They launched queue-free refuelling at select BEST depots using MGL Tez and also allowed for slot booking through app, giving commercial vehicles a taste of friction-less CNG refueling.

The partnership took centre stage again at CNG Mahotsav

2.0 in 2024. MGL asked Nawgati to run the events fleet programme, so we built a closed-loop system that let MGL load incentives via MGL coins and let fleet operators transact using a physical and virtual card and track consumption in real time. The execution showed the wider industry that digital fuel management at scale is already possible.

Today, Nawgati is valued at roughly $36 million which is about nine times where we started when MGL first gave us the pilot opportunity. With additional deployments planned for other locations this year, the collaboration is set to keep redefining what efficient, transparent CNG retail can be.

Working with MGL has shaped Nawgati more than any pitch deck or demo day ever could. Their O&M, Marketing and R&T teams opened up stations, compressors and dispensers for us to dissect long before we had a full-strength ops crew. That early access sharpened our tech and perhaps even more important lent us the credibility only an industry leader can provide. Many prospects took our calls simply because MGL did first.

From the first pilot through the simultaneous rollout of ANPR and integrated billing, MGL kept challenging us to iterate and trusted us enough to deploy. We are especially grateful to the MGL leadership team for their vision, openness and steady encouragement; their backing turned a young startup into a recognised partner across the energy world in India.

Looking ahead, were gearing up to roll out the same plug-and- play stack across Indias next wave of CNG corridors and to pilot our Aaveg tech overseas. Were excited to keep raising the bar together and to set new benchmarks for Indias energy and mobility sector.

Project PRISM

The Company partnered with Salesforce and Appstrail to implement Project PRISM, a CRM transformation initiative. The project aims to establish a single customer view, break data silos and implement the Companys first AI-driven use case. The project kicked off in January 2025, with the Business Requirement Document signed off in February 2025. While development is currently in progress, it plans to go live in the third quarter of 2025.

RISE with SAP: Project Utkarsh

MGL became the first CGD company in India to go for implementation of RISE with SAP on private cloud and SAP ISU, transitioning from SAP ECC 6.0 to SAP S/4HANA. This implementation preserves prior SAP investments while enabling a seamless cloud transition. It lowers TCO with AWS-hosted infrastructure and reduces IT complexity with SAP-managed operations. The system supports on-demand upgrades and custom extensibility for future innovations.

Innovation

Multi-Layered Composite (MLC)

MGL explored the usage of MLC pipes as an alternative to copper tubes, aligning with the PNGRB Technical Standards & Specifications including Safety Standards for City or Local Natural Gas Distribution Networks (also known as T4S).

Besides enhancing safety, these MLC pipes increase productivity and provide cost efficiencies of ~25-30% as compared to copper piping system. Further, by being chemically inert, these

pipes offer a longer service life thereby making them a budget- friendly option.

Multi Coil Tubing (MCT)

MGL has introduced MCT technology at its Patalganga CNG station, utilising stainless steel tubes to transport high-pressure CNG without traditional RCC trench construction. Available in longer lengths, MCT is quicker and easier to install, requires fewer fittings and joints and reduces both installation and maintenance costs. This approach allows for nearly trenchless forecourt construction, improving station aesthetics and safety by minimising fittings while maintaining conventional manufacturing standards.

Prefab Building (PFB)

MGL has installed prefab sales offices at CNG outlets in Kalamboli, Dombivali, Pen and Roha to accelerate execution and reduce costs. Factory-made for precise quality, these structures are quickly assembled onsite, minimising equipment use, material waste and environmental impact. This innovation halves construction time while delivering aesthetically appealing and sustainable buildings.

CRM

MGL believes in comprehensive customer service strategy to enhance convenience and engagement. The Company operates a 24/7 Call Centre, provides WhatsApp and email support, maintains a strong digital presence and manages 13 Walk-in Centres across its service areas.

MGLs Customer Relationship Management (CRM) Department, supported by over 180 trained professionals, serves as the critical link between customers and the Company through an omni-channel setup. In FY 2024-25, the key initiatives customer outreach campaigns to raise awareness about fraudulent activities, extension of CRM services to CNG and commercial customers, introduction of WhatsApp Live Chat for real-time query resolution and integration of robotic automation to streamline operations.

The Company also launched a new Walk-in Centre at Navy Nagar for Army and Navy officials as well as introduced QR code bill payments and electronic feedback systems at its centres. MGL takes pride in building a CRM setup that has become an industry benchmark, attracting visits from leading CGD companies seeking to adopt similar practices.

Health, Safety and Environment

MGL is dedicated towards providing a safe and healthy workplace for its employees and strives to reduce any adverse effects on local communities from its operations. The company has successfully upheld a zero-harm approach.

Policy

MGLs main HSE priorities are focused toward constantly improving health, safety and environmental performance by reducing accidents, injuries, work-related illnesses and enhancing key environmental measures like energy conservation and emission monitoring. MGL is committed to:

• Providing a safe and healthy workplace to prevent work- related injuries and illnesses

• Ensuring full compliance with MGL Life Saving Rules

• Regularly monitoring HSE and quality performance

• Leading in the adoption of best industry practices

• Managing HSE as a critical business priority

• Promoting a culture of shared commitment among stakeholders through consultation and participation.

The HSE Steering Committee is convened quarterly by the Managing Director to discuss the Companys performance on health, safety and environment. During these sessions, critical safety indicators are monitored and tasks are allocated to enhance HSE standards. This periodic review assists the organization in minimising risks, ensuring a safe working environment and promoting long-term success.

Training and Awareness

As part of MGLs continued commitment to integrating Environmental, Social and Governance (ESG) principles across its operations, a focused training program on ESG was conducted for 196 employees. This initiative aimed to enhance awareness, build internal capabilities and nurture a culture of sustainability and responsible governance within the organisation. The training covered key ESG themes, including climate action, resource efficiency, ethical business practices, stakeholder engagement and regulatory compliance.

MGLs meticulous training programs and constant safety initiatives nurture a culture where everyone takes responsibility for maintaining a safe workplace. The Company adheres to top international safety standards and encourages all employees to identify and address unsafe situations. Additionally, MGL maintains documents on Code of Practices, Operation Control Procedures and Standard Operating Procedures to ensure safe execution of various tasks.

The company ensured that the contractual manpower engaged at ground level gets access to best infrastructure during training before start of the job for which various technical institutes such as Bharti Vidyapeeth Institute of Technology, Don Bosco Centre for Learning and Ahmed Abdullah Garib Private ITI were engaged for providing Safety and Technical Competency Training.

MGL also uses display materials like signboards, route markers etc. to help general public easily identify its pipelines. On all major assets important contact numbers are displayed alongside key precautions to be taken in vicinity of these assets.

Regular interactions are held with community and authorities through PNG Awareness Sessions to raise awareness about product safety. On festive seasons, special drives are taken for prevention of unwanted events.

The Company conducted Fire prevention and Fire Fighting Training for Women Special batch over two days at T.S. Chanakya campus. During this training, the participants were given theoretical as well as practical knowledge allowing active participation in firefighting exercises.

The Company conducted the Annual Major Mock Drill (Level III) at CGS Mahape with the activation of MGLs Business Continuity Plan (BCP) demonstrating a proactive approach to emergency preparedness. The involvement of key statutory authorities like Director of Industrial Safety and Health (DISH), Police, Local Disaster Management Team and Mutual Aids Response Group (MARG) ensures a well-coordinated response mechanism in case of real emergencies. Activating the Incident Control Room (ICR) at MGL House during the drill provided valuable insights into crisis management and response efficiency.

Additionally, in FY 2024-25, MGL conducted a total of 154 Mock drills, including Level I and Level II for various locations including operational sites, offices, stores, CGS and CNG retail outlets. The Company had also conducted 23 night mock drills at its factories.

MGL also operates a strong around-the-clock response mechanism via its district network across its Geographical Areas. The system is evaluated during real-time incidents and regular mock drills, with oversight from a centralised Emergency Control Room.

By empowering employees with the knowledge and tools to incorporate ESG considerations into their daily roles, MGL is strengthening its foundation for long-term sustainable growth and aligning its workforce with global best practices.

HSE Developments

MGL upholds a stringent safety-first approach across all its operations, maintenance and project related activities. This ensures safe and efficient distribution of natural gas through pipelines and cascades to both PNG and CNG customers.

MGL has strong quality norms to be followed for materials as well as for work execution so that its assets do not pose any hazard to the community. These assets are regularly inspected, serviced and monitored for maintain its integrity. The patrolling of the assets is done by dedicated teams of Patrolmen and District teams. MGL has implemented injury prevention, transportation and fire safety programme which aligns with the SHEQ and risk management system.

MGL has introduced an App-based Near Miss and Hazard Reporting System to strengthen emergency preparedness and enhance workplace safety. The system is designed to facilitate quick, easy and real-time reporting of near misses, hazards and unsafe conditions, especially during emergencies. It is accessible through the MGL Safety App, available to all employees, contractors and key stakeholders.

To reinforce its firefighting measures, MGL has augmented multipurpose portable fire pumps, each at City Gate Station Savroli and Mahape. These pumps are designed to provide effective fire suppression in emergency situations, ensuring the safety of personnel and infrastructure.

On the occasion of World Environment Day 2024, MGL encouraged responsible disposal of electronic waste by installing collection

bins at selected offices for 15 days. The initiative successfully collected 50 Kilograms of e-waste while educating individuals on sustainable waste management practices.

With the MGL expansion into unchartered domains, the need for proper security operations has increased. The ICCC at Mahape highlights the expertise of the Company in the CGD industry. The ICCC is equipped with state-of-the-art facilities like SCADA, GIS to swiftly address any hazards or accidents in the pipeline network and CNG stations. 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 are 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. This feature has helped to be proactive during any kind of Emergencies handled by MGL. 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.

MGL supports the governments energy decarbonisation and Net Zero goals by promoting natural gas as a cleaner alternative to conventional fuels for businesses and by expanding the use of CNG, PNG and LNG in domestic, automotive and industrial sectors. The company is also transitioning its own energy consumption to solar power through rooftop solar installations and is exploring renewable power purchase agreements to further reduce reliance on conventional electricity sources.

MGL is developing a major Compressed Bio Gas (CBG) plant in Mumbai, in partnership with the Brihanmumbai Municipal Corporation, to process municipal solid waste into clean fuel. This initiative is aligned with the governments Sustainable Alternative Towards Affordable Transportation (SATAT) scheme and aimed at reducing greenhouse gas emissions and promoting circular economy practices. Other sustainability efforts include carbon sequestration through methods like Miyawaki Forests. MGL integrates sustainability into its long-term strategy by aligning with ESG principles, focusing on environmental stewardship, social responsibility and strong governance. The company implements water conservation measures such as rainwater harvesting and sewage treatment and its CSR programs support healthcare, education, skill development and community wellbeing. Safety, risk management and ethical business practices are strictly enforced to ensure operational resilience.

MGL is also investing in renewable energy assets, exploring opportunities in the EV sector and leveraging digital innovations to future-proof its sustainability efforts. An ESG Committee, chaired by the Deputy Managing Director, provides oversight on these initiatives with quarterly progress reviews. MGL intends to align its Net Zero targets with national objectives, highlighting its commitment to a sustainable and low-carbon future.

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.

Audits

MGL has successfully finished its 2^nd surveillance ISO audit at several locations including CGS Sion, CGS Ambernath, Parinee, Nahur office, Borivali office, MGL House, Kalyan office and locations in GA1 and GA2, with zero major or minor non-conformities. The external certification organisation TUV India Pvt. Ltd. conducted the audit and ensured that MGL was conforming to international management system standards. Further, MGL conducts internal audits annually in stages in all its sites, offices, CGS, warehouses and CNG retail outlets.

In addition, MGLs Raigad GA has been re-certified for conformity to the Emergency Response and Disaster Management Plan (ERDMP) after site inspections in line with PNGRB Regulations, 2010 and the 2020 amendment. The certification confirms MGLs adherence to regulatory safety standards, emergency preparedness and efficient risk management, promoting a safe and secure operating environment.

Awards

MGL has been consistently recognised for its exemplary Health, Safety and Environment (HSE) practices, receiving several prestigious awards in FY 2024-25. In August 2024, MGL was honoured with ‘Four Golden Stars by the National Safety Council of India (NSCI) for its exceptional Occupational Health and Safety (OHS) Management Systems at the CGS Mahape facility. Additionally, on September 27, 2024, the NSCI Maharashtra Chapter awarded MGL with the ‘Certificate of Merit for Meritorious Performance in Industrial Safety, acknowledging outstanding safety standards at the CGS Ambernath, Mahape and Taloja facilities.

Further, on September 14, 2024, MGL received the ‘Platinum Award for Best Warehouse Safety Practices in the Public Utility Service Sector from the APEX India Foundation, reflecting operational efficiency and safety excellence. On January 9, 2025, MGL was proclaimed as the ‘Winner in ‘Excellence in Safety Training under the 22^nd Greentech Global Workplace Safety Award 2024. This recognition serves to highlight MGLs commitment to developing a culture of on-going learning in safety procedures.

Continuing to receive appreciation for safety practices, MGL was awarded the ‘Prashansa Patra in January 2025 by NSCI for its outstanding performance in Occupational Safety and Health (OSH) during 2021-2023 in the Manufacturing Sector (Group A1).

These recognitions collectively support MGLs excellence in HSE practices and its constant dedication to delivering a safe and sustainable work environment.

Security

MGLs Security Philosophy: A Holistic Approach to Asset Protection

Security forms the cornerstone of the Companys operational excellence strategy, adopting a risk-based approach to proactively identify and mitigate threats. This strategy ensures seamless operations, regulatory compliance and the safety of employees and stakeholders. The security framework ensures a safe workplace, enhancing productivity and confidence among the workforce. The Company prioritises the protection of critical assets, including City Gate Stations, offices, retail outlets and pipelines, ensuring seamless natural gas distribution.

Securing Critical Assets

MGL employs a comprehensive security framework that combines vigilant human resources, advanced surveillance systems, access controls and robust digital monitoring tools. Stringent protocols and proactive risk management strategies safeguard infrastructure resilience against potential threats, ensuring uninterrupted operations and long-term sustainability.

Strengthening IT Security and Compliance

MGL has continued its efforts to fortify IT security by implementing industry-best practices and deploying robust security frameworks. To safeguard critical business operations and customer data, MGL has taken the following steps:

• Privilege Access Management (PAM) has been implemented to control and monitor privileged user access.

• Secure File Transfer Protocol (SFTP) has been deployed to ensure safe and encrypted data exchange.

• Vulnerability Assessment and Penetration Testing (VAPT)

was conducted for all critical web-facing applications and mobile apps.

• Automated Capacity Monitoring was implemented for critical servers to prevent performance bottlenecks and security threats.

To strengthen cybersecurity governance, MGL has engaged a Virtual Chief Information Security Officer (VCISO) who is actively guiding the IT security team in:

• Ensuring compliance with ISO 27001:2013 certification and working towards upgrading to the latest ISO 27001:2022 standards.

• Evaluating and implementing new security tools to enhance risk mitigation measures.

In alignment with the Digital Personal Data Protection (DPDP) Act, MGL has conducted a structured Data Privacy Infrastructure Assessment in two phases which included- Phase 1: Data Discover and Governance

• Setting up a Data Privacy Governance model with a resident Data Protection Officer (DPO).

• Enforcing data privacy policies in accordance with the DPDP Act.

• Executing a corporate-wide PII discovery effort across MGL and third-party vendors.

• Evaluating privacy risks associated with business processes, applications and vendor relations.

• Providing employee and vendor training on handling PII and privacy best practices.

Phase 2: Sustenance & Implementation

• Implementing updated privacy risk registers to maintain continuous compliance.

• Assessing Privacy Enhancement Technologies (PETs) for secure data handling.

• Establishing an internal audit framework in line with DPDPA 2023.

These actions highlight MGLs dedication to data privacy, regulatory compliance and strong security culture.

Security Team: A Strong Line of Defence

MGLs efficient security team includes supervisors, guards and specialised technical personnel, who operate the Integrated Security Control Room to ensure real-time monitoring. The team also includes ex-police personnel who bring their expertise in crisis management. While Queue Controllers at retail outlets ensure safety and order, patrolmen conduct regular pipeline surveillance to mitigate risks proactively. Each member performs their duty diligently, upholding MGLs commitment to safety and reliability.

Enhancing Vigilance through Training

MGL conducts regular training programmes for its security personnel, covering key topics such as access control, emergency

response, fire safety and crowd management. Additionally, specialised training is also provided to equip the team to handle scenarios such as terrorist attacks, bomb threats or natural disasters. This structured approach ensures a proactive and well- equipped security force capable of safeguarding operations.

State-of-the-Art Integrated Security Control Room

MGLs Integrated Security Control Room leverages advanced technology for real-time incident management. Equipped with C4i

Human Resource

The success of an organisation is written by its employees. MGL acknowledges the value of its employees and therefore nurtures a workplace environment that promotes diversity, equity and drives innovation. In FY 2024-25, MGL welcomed 78 new employees, bringing the total count to 584 (as of March31, 2025), with a gender diversity ratio of 9:1.

software, bezel-less video walls and intelligent video analytics, the facility encompasses CCTV cameras, fire detection systems, vehicle tracking and intruder alarms into a unified command centre. The centre is connected to the Primary Incident Control Room at BKC, enhancing coordination during emergencies while ensuring rapid responses.

Industry Recognition

The advanced capabilities of MGLs Integrated Security Control Room have earned recognition from various esteemed organisations, including BARC, NPCIL and PNGRB. These accolades serve as a testament to MGLs leadership in innovative security infrastructure.

Honouring Security Personnel

For the people that ensures there is no scratch on the Companys reputation, the dedication of the security personnel is acknowledged through awards such as the "Extra Mile" Award. From exemplary service in managing queues at retail outlets to patrolling pipelines, their swift responses and adherence to protocols reinforce MGLs culture of excellence in asset protection.

The Company has built a structured Performance Management System and targeted developmental programmes to equip the workforce with necessary skills to prepare them for the future. The Companys flagship initiatives, such as ‘Discover the Power Within for unlocking potential and ‘iLead for the first-time managers have proven to be beneficial for the employees. Further, the members of the Leadership Team participate in prestigious

Management Development Programmes at renowned institutions, including international training programmes, to cultivate a global perspective and increase adaptability and innovation.

The Companys journey of excellence has been built on a solid foundation of robust governance practices. MGL conducts extensive awareness programmes covering Prevention of Sexual Harassment, Human Rights, Grievance Handling, Cybersecurity Awareness and Code of Conduct. To establish a culture of recognition and engagement, MGL has also established awards such as ‘Going the Extra Mile (GEM) Award, ‘Extra Mile Award and ‘Special Contribution Award.

Beyond the workplace, MGL organises events such as ‘MGL Got Talent to celebrate creativity and strengthen the sense of community among employees and their families. Further, to facilitate consistent growth, the Company follows the method of recruiting Graduate Engineering Trainees and Management Trainees to maintain the level of excellence in the upcoming years.

At MGL, employee well-being is prioritised through progressive policies, including flexible working hours, health check-ups and comprehensive insurance coverage. The Company also maintains a harmonious relationship with its Staff Union and adheres meticulously to all labour-related statutory compliances. The acknowledgement as a top-quartile organisation in employee engagement by the Global Energy Sector Survey conducted by BCG highlights reflects the Companys commitment to developing a high-performance culture.

Risk Management

MGL integrates robust risk management practices into its operations to safeguard stakeholder interests. Overseen by the Risk Management Committee and implemented by Functional Heads, the Companys Enterprise Risk Management (ERM) framework addresses risks across financial, operational, strategic and regulatory domains. This structured approach enables MGL to navigate uncertainties while capitalising on opportunities.

The comprehensive and adaptive ERM framework incorporates regular risk assessments and scenario analyses to identify, assess and manage potential threats as well as allocate resources effectively. Led by the Chief Risk Officer (CRO), the risk evaluation aligns with MGLs financial objectives, corporate strategy, statutory compliance, operational goals and reporting requirements. Further, a collaborative ERM software tool embeds the robust risk management practices across all business operations.

MGL operates in a dynamic market landscape, which makes it crucial to adopt risk policies that reflect the changes efficiently. By encouraging a culture of accountability and maintaining a well-established governance structure, MGL

has been efficient in upholding resilience, trust and long-term value creation.

Mitigation Strategies

• Financial Risks: Continuous monitoring of market

fluctuations and implementing mitigation actions to address exposure.

• Operational Risks: Regular risk assessments, scenario analyses and resource allocation for critical operations.

• Strategic Risks: Alignment of risk management processes with corporate strategy to ensure adaptability.

• Regulatory Risks: Strict adherence to statutory compliance and proactive engagement with regulatory bodies.

• Uncertainty Management: Implementation of ERM

software for real-time tracking, reporting and improvement of risk processes.

This risk management framework ensures uninterrupted operations and drives sustainable growth, even amidst a competitive marketplace.

Exchange Rate Fluctuation

Gas contracts, especially long-term and spot LNG imports, are denominated in US dollars (USD). So, when the local currency depreciates against the dollar, LNG becomes more expensive in local terms and vice versa. In such case CGDs like your Company, using LNG must pay more in local currency for the same amount of gas when the local currency weakens.

Three options emerge in such eventuality. Either PNG and CNG price maybe increased to pass on the higher input cost to consumers or operating with reduced margins, if price increases are not passed on to the consumer or cover the exchange rate fluctuations through hedging. Studied view of this risk was taken and it was decided to pass on the increased cost to the customer in case of exchange rate fluctuations. This is better than taking a upfront hedge cover in the long run as observed from the past data.

Internal Control System

The Company has strong internal control systems that align with the complexities of its business operations, ensuring reliable financial reporting, operational efficiency and compliance. The Company thoroughly documents policies, procedures and Standard Operating Procedures (SOPs), which are digitised and integrated into business processes. These controls undergo regular testing for design adequacy and operational effectiveness by both internal and external auditors, ensuring their functionality in practice.

The Audit Committee oversees the risk-based internal audit plan, focusing on high-risk areas within key business processes and expenses. Internal audits are conducted by a reputed external firm, complemented by MGLs in-house Internal Audit team. Significant observations and corrective actions are periodically presented to the Audit Committee, which ensures impartiality by having the Internal Auditor report directly to the Companys Chairman. This structure develops transparency and accountability while enhancing the credibility of audit processes.

MGL has implemented in-house modules for managing internal audit and Internal Financial Controls (IFC) processes, streamlining scheduling, document management and control testing. The companys SAP ERP system incorporates transactional controls such as segregation of duties and Maker-Checker mechanisms to ensure compliance and operational integrity. Regular reviews of risk management policies reflect changing market dynamics, while audits track deficiencies and recommend improvements.

Through continuous assessments, no material weaknesses were identified in the control environment during the year under review. MGLs alignment with strong governance practices, ethical behaviour and proactive risk management reinforces stakeholder trust and supports sustainable business growth.

Cautionary Statement

This document includes forward-looking statements regarding the expected future events, financial performance and operational results of Mahanagar Gas Limited (MGL). These statements are based on assumptions and are inherently subject to risks and uncertainties. Actual outcomes may differ materially from those expressed or implied in these statements due to various factors, including market fluctuations, regulatory changes and other unforeseen circumstances. Readers are advised not to place undue reliance on forwardlooking statements as they reflect the companys current expectations and strategic plans, which may evolve over time. MGL does not undertake any obligation to update or revise these statements in light of new information or future events unless required by applicable laws.