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Reliance Securities Report
Total sales volume of Mahanagar Gas Ltd. is expected to clock only 3% compound annual growth rate over FY20-23E on the back of
1. very little space to more vehicle addition in Mumbai owing to the highest vehicular density (1,900/km);
2. no new geographical area to aid volume growth story; and
3. no allocation for adding compressed natural gas buses in 2020-21 budget of Municipal Corporation of Greater Mumbai (MCGM).
The company had earlier guided that sales volume from Raigad geographical area to touch 0.6 million metric standard cubic meter per day (mmscmd) in FY23E.
To achieve this target, Mahanagar Gas should have set up approximately 100 CNG stations, while it set up only 15 CNG stations so far and is expected to add five to 10 CNG stations annually over the next three years.
We believe these new stations will add only 50,000kg/day to Mahanagar Gas’s CNG sales volume by FY23E, which is less than 2% of expected total sales volume of 3.2 mmscmd.
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