we discuss about India's leading cng and png distribution companies.about their valuation - YouTube

Hi Everyone!

Today in this video, we will discuss about market leader companies of gas distribution sector.

And, the outlook of each these 4 companies.

We have already discussed about this industry and sector.

You can watch previous video,I have attached link of the video in I-link above.

Now a brief review

Per capita Gas consumption is lowest in India as compared to other countries.

Because of pollution government is focusing on clean fuels

Government is working to reduce dependence on Petrol and Diesel.

Companies have to bid in auction to open new CNG station in each state, which is regulated by Petroleum and Natural Gas Regulatory Board.

Till date 10 round of bidding have happened, last occurred in 2019.

There is no restriction on companies to operate in particular states only.

Wherever company wins bid, can start their operations.

Now the usage of CNG and PNG.

Private vehicles constitutes 23%, buses 6%, auto-rickshaw 47%, Cab and Taxi 23%

In upcoming future, the consumption of CNG is expected to increase with CNG Vehicles sale.

Now another product PNG,

Fertiliser 44%, Power 27%, Petrochemical 10% approx, Refinery 21% and others 19%

The sales of PNG is expected to increase with demand from fertilizer and power sector.

Now, number of CNG station per state.

We will consider states with significant number of CNG station only and which company is operating there.

Like Delhi NCR, Noida, Ghaziabad have 450 CNGstations.

Gujarat have 470 approx. next Maharashtra

Now, companies with presence in these states

In Delhi IGL. In Gujarat Gujarat Gas, Adani Gas.

In Maharashtra MGL.

Now, number of CNG station company-wise

MGL have 256 open station in present

IGL 555, Gujarat Gas 401, Adani Gas 115

The biggest network of PNG pipeline is Gujarat gas.

Now, volume mix. MGL have 72% of revenue from CNG, 28% from PNG including both commercial and domestic.

Likewise IGL 73%, Gujarat gas have only 15% from CNG and rest 84% from PNG

And maximum of it comes from industrial use. Whenever there is industrial growth, which we have seen in previous slide

Fertilizer, power, refinery. Gujarat Gas is expected to benefitted most.

In Adani Gas contribution between CNG and PNG is 50-50. But, number of CNG station and PNG pipeline is also less.

Now, last 5 years performance of IGL, MGL, Gujarat gas and Adani Gas

The highest return is given by IGL

The reason behind these return is, company is having most number of CNG and it's rapid expansion in Delhi NCR.

Now valuation of all these companies

The PE of MGL is 12.37, price to book is 3.32, ROE is also decent. Company is also having some debt and net growth is also decent.

As per the valuation in this comparison MGL is leading among all.

As of industrial PNG, Gujarat Gas and Adani Gas are expected to get benefitted

For Adani Gas we have to look into Quarterly results and updates for better understanding

I hope this video helped you to understand the industry and we have also discussed individual companies.

If you are already invested in these companies, it would have helped you to understand it better.

And for fresh investment, please consult your financial advisor

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