Gas Distribution

Q2 FY2026 Gas Distribution Sector Overview

10 December 2025

The Gas Distribution sector in India is evolving with government backing for a gas-based economy, expanded infrastructure, and rising demand across end-user segments.

Gas Distribution Sector: Comprehensive Industry Analysis

The Gas Distribution sector in India is undergoing a transformative phase, driven by robust government support for a gas-based economy, expanding infrastructure, and increasing demand across various end-user segments. This comprehensive analysis synthesizes data from key players like GAIL (India) Limited, Adani Total Gas Limited (ATGL), and Mahanagar Gas Limited (MGL) to provide an in-depth understanding of the industry's market landscape, financial health, competitive dynamics, operational characteristics, growth drivers, risk profile, capital allocation strategies, and future outlook. The sector is characterized by significant capital intensity, regulatory oversight, and a strategic shift towards cleaner energy sources, including natural gas and emerging segments like electric vehicle (EV) charging and renewables.

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A. INDUSTRY OVERVIEW & MARKET LANDSCAPE

The Gas Distribution sector in India is a critical component of the nation's energy infrastructure, playing a pivotal role in transitioning towards a cleaner and more sustainable energy mix. It encompasses the transmission, marketing, and distribution of natural gas to industrial, commercial, domestic, and vehicular (CNG) consumers. The market is structured with large integrated players like GAIL, which dominates the midstream (transmission and marketing) and has significant downstream interests, alongside dedicated City Gas Distribution (CGD) companies like ATGL and MGL, which focus on last-mile connectivity.

**Total Addressable Market Size and Growth Rates:** While an explicit total market size for the entire gas distribution sector is not provided, the combined revenues of the analyzed companies offer a glimpse into the scale. GAIL (India) Limited, a Maharatna company, reported a consolidated turnover of INR 1,41,949 crore in FY25, with H1 FY26 reaching INR 70,964 crore. This indicates a substantial scale for the largest player in the value chain. Adani Total Gas Limited (ATGL) recorded H1 FY26 revenue from operations of INR 3,060 crore, demonstrating a robust 20% year-on-year (YoY) growth. Mahanagar Gas Limited (MGL), including its amalgamated entity, posted H1 FY26 standalone revenues of INR 4,130.71 crore, reflecting a 19.66% YoY growth. MGL also boasts a 3-year Revenue CAGR of 27.10%, highlighting the rapid expansion within the CGD segment. These figures collectively underscore a rapidly expanding market, driven by increasing gas penetration.

**Market Structure and Segmentation:** The industry exhibits a multi-layered structure: 1. **Upstream (E&P):** Companies like GAIL have interests in Exploration & Production (E&P), though this is a smaller component of their overall business (2% of FY25 Capex, 13% of FY26(E) Capex). Major sources for domestic gas include ONGC (APM & MDP), Ravva, Ravva satellite, and CBM. 2. **Midstream (Transmission & Marketing):** GAIL is a dominant player in natural gas transmission and marketing. * **Transmission:** GAIL's natural gas transmission volumes were 127 MMSCMD in FY25, projected at 122 MMSCMD for H1 FY26. The composition in H1 FY26 was 72% APM/NAPM, 26% RLNG/Spot, and 2% RIL & BP MDP. * **Marketing:** GAIL's natural gas marketing volumes were 101 MMSCMD in FY25, reaching 105 MMSCMD in H1 FY26. The H1 FY26 marketing mix was 49% APM/NAPM, 35% RLNG/Spot, 3% RIL & BP MDP, and 13% Overseas Sales. 3. **Downstream (City Gas Distribution - CGD):** This segment is the primary focus of ATGL and MGL, involving the distribution of natural gas to various consumer categories. GAIL also has significant equity investments in CGD companies (21% of FY25 Capex, 26% of FY26(E) Capex). * **CNG (Compressed Natural Gas):** For vehicular use. This is a high-growth segment, with ATGL reporting 19% YoY growth in CNG volumes for H1 FY26, and MGL's CNG volumes (amalgamated) reaching 3.255 MMSCMD in Q2 FY26, comprising 69.87% of its total sales volume. * **PNG (Piped Natural Gas):** * **Domestic PNG (DPNG):** For household cooking and heating. MGL's DPNG volumes (amalgamated) were 0.757 MMSCMD in Q2 FY26, making up 13.31% of sales. ATGL's PNG domestic allocation was 105% in Q2 FY26, and it surpassed 1 million total PNG consumers in Q2 FY26. * **Industrial & Commercial (I&C) PNG:** For industrial processes and commercial establishments. MGL's I&C volumes (amalgamated) were 0.582 MMSCMD in Q2 FY26, accounting for 16.82% of sales. ATGL added 304 new I&C consumers in H1 FY26, reaching 9,603 total. 4. **Other Segments:** * **Petrochemicals:** GAIL has a significant presence in petrochemicals, with sales of 399 TMT in FY25 and 386 TMT in H1 FY26. This segment accounts for a substantial portion of GAIL's capex (25% in FY25, 28% in FY26(E)). * **Liquid Hydrocarbons (LHC) & LPG Transmission:** GAIL also deals in LHC sales (951 TMT in FY25, 420 TMT in H1 FY26) and LPG transmission (4,478 TMT in FY25, 2,298 TMT in H1 FY26). * **Net Zero/Renewables & E-mobility:** GAIL is investing in Net Zero/Renewables (6% of FY25 Capex, 11% of FY26(E) Capex). ATGL is aggressively expanding into EV charging points, with 4,209 points installed by H1 FY26 and a target of 10-15 points added daily. This represents a diversification into future energy solutions.

**Key End Markets and Applications:** The major demand for natural gas comes from: * **Fertilizers:** A significant consumer, accounting for 37.04 MMSCMD (38%) of GAIL's marketing supply in H1 FY25, though it decreased to 34.78 MMSCMD (33%) in H1 FY26. * **Power:** Consumed 14.02 MMSCMD (14%) of GAIL's marketing supply in H1 FY25, declining to 10.92 MMSCMD (10%) in H1 FY26. * **CGD:** A growing segment, utilizing 26.75 MMSCMD (27%) of GAIL's marketing supply in H1 FY25, increasing to 28.86 MMSCMD (27%) in H1 FY26. This highlights the importance of CGD companies as key customers for gas marketers like GAIL. * **Transportation (CNG):** Driven by the economic benefits and environmental advantages of CNG vehicles. * **Households (DPNG):** For cooking, offering convenience over LPG cylinders. * **Industrial & Commercial:** For various heating and process applications, often competitive with alternative fuels like LPG and furnace oil.

**Geographic Distribution and Regional Dynamics:** The sector is expanding its footprint across India: * **GAIL:** Operates a vast national pipeline network for transmission and marketing, serving diverse regions. * **ATGL:** Has a consolidated nationwide CGD network (including its JV with Indian Oil Corporation, IOAGPL) covering 53 geographical areas (GAs) and 125 districts across 26 states and Union Territories. ATGL's own GAs are 34 (95 districts), while IOAGPL covers 19 GAs (30 districts). Its EV charging footprint is also spread across 26 states/UTs and 226 cities. * **MGL:** Primarily concentrated in the Mumbai Metropolitan Region (Mumbai GA 1, Thane GA 2, Raigad GA 3). Through the amalgamation of erstwhile UEPL, it has expanded into new GAs like Latur, Osmanabad, Ratnagiri, Davengere, and Chitradurga, indicating regional diversification.

**Market Maturity and Lifecycle Stage:** The gas distribution sector, particularly the CGD segment, is in a growth phase. While established metropolitan areas like Mumbai (MGL's core market) show higher penetration, many new GAs awarded by PNGRB are still in the initial infrastructure development stage. The rapid addition of CNG stations, PNG connections, and pipeline infrastructure by ATGL and MGL signifies this growth. The EV charging segment is nascent but rapidly expanding, representing an early-growth stage for diversification. LNG retailing is being traded cautiously, indicating an exploratory stage for that specific sub-segment.

**Industry Value Chain and Ecosystem:** The value chain starts with gas sourcing (domestic APM, NWG, imported RLNG/Spot, Brent-linked, Henry Hub-based). GAIL plays a crucial role in gas transmission and large-scale marketing. CGD companies like ATGL and MGL then procure gas from marketers (like GAIL or directly from importers) and distribute it through their pipeline networks and CNG stations to end-consumers. The ecosystem also includes vehicle manufacturers (for CNG vehicles), appliance manufacturers (for PNG), and increasingly, EV manufacturers and charging infrastructure providers. Regulatory bodies like PNGRB govern the allocation of GAs, tariffs, and infrastructure development.

B. FINANCIAL & ECONOMIC PROFILE

The financial performance of companies in the Gas Distribution sector reflects a mix of stable, regulated income streams (transmission, domestic PNG, CNG with APM allocation) and market-sensitive segments (industrial PNG, petrochemicals, spot gas marketing). Overall, the sector demonstrates significant capital requirements for infrastructure development, with varying profitability and return profiles influenced by gas prices, regulatory policies, and operational efficiency.

**Industry Aggregate Revenue Scale and Growth Trajectory:** The sector shows a strong growth trajectory, albeit with some volatility for integrated players due to commodity price fluctuations. * **GAIL (India) Limited:** As the largest player, GAIL's consolidated turnover has seen substantial growth and subsequent normalization. * FY22: INR 92,636 crore * FY23: INR 1,45,531 crore (Significant 57.13% YoY growth, likely due to high gas prices) * FY24: INR 1,33,130 crore (9.1% YoY decline, possibly due to moderating gas prices) * FY25: INR 1,41,949 crore (6.62% YoY growth) * H1 FY26: INR 70,964 crore (projected annual turnover of ~INR 1,41,928 crore, indicating stable growth) * Standalone turnover shows similar trends: FY22 (91,426 Cr) -> FY23 (1,43,976 Cr) -> FY24 (1,30,284 Cr) -> FY25 (1,36,960 Cr) -> H1FY26 (69,707 Cr). * **Adani Total Gas Limited (ATGL):** Demonstrates strong revenue growth in its core CGD business. * H1 FY26: INR 3,060 crore (up 20% YoY) * Q2 FY26: INR 1,569 crore (up 19% YoY) * **Mahanagar Gas Limited (MGL):** Exhibits robust growth, partly aided by amalgamation. * 3 years Revenue CAGR: 27.10% (indicating strong historical growth). * H1 FY25-26 (Amalgamated): INR 4,130.71 crore (up 19.66% YoY from H1 FY24-25: INR 3,452.01 crore). * Q2 FY25-26 (Amalgamated): INR 2,049.33 crore (up 14.73% YoY from Q2 FY24-25: INR 1,786.25 crore).

The overall trend points to healthy revenue expansion across the sector, driven by increasing gas consumption and infrastructure build-out.

**Profitability Levels Across Companies (Gross Margin, EBITDA, Net Margin):** Profitability varies significantly based on business mix and gas sourcing strategies. * **GAIL (India) Limited:** * **Consolidated Gross Margin (EBITDA):** * FY22: INR 18,086 crore * FY23: INR 10,323 crore (Significant drop, likely due to higher gas procurement costs not fully passed on or lower petrochemical margins) * FY24: INR 16,986 crore (Strong recovery) * FY25: INR 20,643 crore (Further improvement) * H1 FY26: INR 8,210 crore (Projected annual EBITDA of ~INR 16,420 crore, indicating a slight moderation from FY25) * **Consolidated Profit After Tax (PAT):** * FY22: INR 12,256 crore * FY23: INR 5,616 crore (Significant drop, mirroring EBITDA trend) * FY24: INR 9,899 crore (Strong recovery) * FY25: INR 12,450 crore (Further improvement) * H1 FY26: INR 4,342 crore (Projected annual PAT of ~INR 8,684 crore, indicating a moderation from FY25) * Standalone figures show similar trends. * **Adani Total Gas Limited (ATGL):** Maintains relatively stable margins. * Overall EBITDA margin: around 20%. * Overall gross margin: 29%. * EBITDA: Q2 FY26: INR 302 crore; H1 FY26: INR 603 crore. * PAT: Q2 FY26: INR 162 crore; H1 FY26: INR 324 crore. * ATGL noted that while volume growth was significant, EBITDA was not growing proportionally due to a slight reduction in APM vs new well gas allocation and dollar appreciation (4%). This highlights the sensitivity of margins to gas sourcing mix and currency fluctuations. * **Mahanagar Gas Limited (MGL):** Shows strong gross profits but recent pressure on EBITDA margins. * **Standalone Gross Profit (Gas Sales Less Gas Cost) (INR/SCM):** * Q2 FY25: 17.07 * Q1 FY26: 19.04 * Q2 FY26: 14.78 (Significant decline QoQ and YoY, indicating pressure on per-unit profitability) * H1 FY25: 17.54 * H1 FY26: 16.87 * **Standalone EBITDA Margins:** * Q2 FY25-26: 16.49% * Q2 FY24-25: 23.15% (YoY Growth: -18.27% in absolute EBITDA) * Q1 FY25-26: 24.06% * H1 FY25-26: 20.30% * H1 FY24-25: 24.63% (YoY Growth: -1.37% in absolute EBITDA) * The decline in MGL's gross profit per SCM and EBITDA margins in Q2 FY26 is a key concern, attributed to higher gas costs (Q2 FY26: 33.59 INR/SCM vs Q2 FY25: 28.96 INR/SCM) not fully offset by revenue per SCM (Q2 FY26: 48.49 INR/SCM vs Q2 FY25: 46.17 INR/SCM).

**Range of Margins with Median and Outliers Noted:** * EBITDA margins range from MGL's Q2 FY26 low of 16.49% to ATGL's consistent ~20% and MGL's Q1 FY26 high of 24.06%. GAIL's overall consolidated EBITDA margin can be calculated by dividing EBITDA by turnover, which shows variations (e.g., FY25: 20643/141949 = ~14.5%, H1 FY26: 8210/70964 = ~11.5%). * The median EBITDA margin for CGD players appears to be in the 20-24% range under normal conditions, but can dip significantly due to gas price volatility and allocation changes. GAIL's integrated nature means its margins are influenced by petrochemical cycles and transmission tariffs, leading to a broader range.

**Return Profiles (ROCE, ROE, ROIC) by Company:** * **GAIL (India) Limited:** * **Standalone PAT to Net Worth (ROE proxy):** * FY22: 21% * FY23: 10% (Significant dip) * FY24: 16% * FY25: 18% * H1 FY26: 12% (Annualized would be 24%, but H1 is usually lower) * **Standalone Return on Capital Employed (ROCE):** * FY22: 20% * FY23: 10% (Significant dip) * FY24: 14% * FY25: 17% * H1 FY26: 12% (Annualized would be 24%) * GAIL's returns show sensitivity to its profitability, with FY23 being an outlier low. The recovery in FY24-FY25 indicates improved operational performance. * **Mahanagar Gas Limited (MGL):** * RoE (FY25): 18.91% (Healthy return, comparable to GAIL's FY25 figures).

These return metrics indicate that the sector can generate attractive returns on capital when market conditions are favorable and gas sourcing is optimized.

**Working Capital Characteristics and Cash Conversion Cycles:** No explicit data on working capital or cash conversion cycles is provided. However, the nature of the business, with regulated tariffs and long-term contracts for gas supply and distribution, suggests relatively stable working capital requirements. Inventory management for gas is less complex than for other commodities due to pipeline delivery. Receivables from a large customer base (domestic, commercial, industrial) and government entities (for APM gas) could be a factor.

**Capital Intensity Requirements:** The Gas Distribution sector is highly capital-intensive, requiring substantial investments in infrastructure. * **GAIL (India) Limited:** Plans significant capital expenditure. * FY 2024-25: Total INR 10,512 crore * Pipeline: 4,570 crore (44%) * City Gas Distribution (Equity): 2,244 crore (21%) * Petrochemical: 2,653 crore (25%) * E&P: 237 crore (2%) * Net Zero/Renewables: 618 crore (6%) * Equity Investments: 113 crore (1%) * Operational Capex & Others: 77 crore (1%) * FY 2025-26 (E): Total ~INR 10,700 crore * Pipeline: 1,900 crore (18%) * City Gas Distribution (Equity): 2,750 crore (26%) * Petrochemical: 3,000 crore (28%) * E&P: 1,400 crore (13%) * Net Zero/Renewables: 1,200 crore (11%) * Equity Investments: 200 crore (2%) * Operational Capex & Others: 250 crore (2%) * GAIL's capex profile highlights continued investment in core infrastructure (pipelines), strategic growth areas (CGD, petrochemicals), and future-oriented segments (Net Zero/Renewables, E&P). The shift in FY26(E) shows increased focus on CGD, petrochemicals, E&P, and renewables, with a relative decrease in pipeline capex, possibly indicating completion of major trunk lines. * **ATGL:** Actively expanding its network. * Adding 12 new CNG stations in Q2 FY26. * Adding nearly 27,000 home PNG connections in Q2 FY26. * Rapidly progressing towards 10,000 EV charging points, adding 800 points in Q2 FY26. * Steel pipeline infrastructure of 14,524-inch kilometers (ATGL standalone) and 26,411-inch kilometers (ATGL + IOAGPL JV). * **MGL:** Total Assets as of 30th September 2025 were INR 8,649 crore, up from INR 8,284 crore on 31st March 2025, reflecting ongoing asset creation. The amalgamated entity has 485 CNG stations, 701 km of steel pipeline, and 7,361 km of PE pipeline.

The high capital intensity necessitates strong balance sheets or access to capital markets, as evidenced by GAIL's relatively low debt-equity ratio and ATGL's upgraded credit ratings (AA+ stable by ICRA, CARE, CRISIL).

**Revenue Quality (Recurring vs One-time, Contract Length):** The majority of revenues in the CGD segment are recurring. * **Domestic PNG:** Highly recurring, with long-term customer relationships. * **CNG:** Recurring, driven by daily vehicle usage. * **Industrial & Commercial PNG:** Often based on long-term supply contracts, providing stable recurring revenue. * **Gas Transmission:** Long-term contracts with gas marketers and large consumers. * **Petrochemicals:** More susceptible to commodity cycles and spot market dynamics, leading to less predictable revenue. The recurring nature of CGD and transmission revenues provides a stable base, while other segments introduce some cyclicality.

C. COMPETITIVE STRUCTURE & DYNAMICS

The Gas Distribution sector in India presents a complex competitive landscape, characterized by a mix of state-owned giants, private sector players, and joint ventures, all operating under a robust regulatory framework. The competitive dynamics are influenced by infrastructure development, gas sourcing capabilities, pricing strategies, and diversification into new energy segments.

**Number of Players and Market Concentration:** The market is not highly fragmented but features a few dominant players. * **GAIL (India) Limited:** A Maharatna Company, it holds a near-monopoly in the national gas transmission pipeline network and is a major gas marketer. Its scale (consolidated turnover of INR 1,41,949 crore in FY25) dwarfs other players, making it a critical upstream and midstream entity for the entire sector. GAIL also has significant equity stakes in various CGD companies, including MGL (32.5% shareholding). * **Adani Total Gas Limited (ATGL):** A leading private sector CGD player, rapidly expanding its footprint across 53 GAs and 125 districts. Its 50-50 JV with Indian Oil Corporation (Indian Oil Adani Gas Private Limited, IOAGPL) further consolidates its position, bringing its total CNG stations to nearly 1,100 and PNG home connections to over 1.2 million. * **Mahanagar Gas Limited (MGL):** One of the largest CGD companies in India, with a strong presence in the Mumbai Metropolitan Region and expanding into new GAs through amalgamation (erstwhile UEPL). It serves over 1.22 million CNG vehicles and 2.95 million households (amalgamated entity). * **Other CGD Players:** Numerous other regional CGD entities exist, many of which are JVs between public sector undertakings (PSUs) and private players, or standalone entities. The PNGRB's rounds of bidding for GAs ensure a competitive allocation process for new areas.

Market concentration is high in the midstream (GAIL) and becoming increasingly consolidated in the CGD segment through strategic JVs and expansions by large players like ATGL and MGL.

**Market Share Distribution (with specific percentages):** Specific market share percentages for the entire gas distribution market are not provided. However, based on operational metrics: * **GAIL's dominance:** Its natural gas transmission volumes (127 MMSCMD in FY25) and marketing volumes (101 MMSCMD in FY25) indicate its significant share in the midstream. * **CGD Market:** ATGL's consolidated network of 1,095 CNG stations and 1.2 million PNG connections, alongside MGL's 485 CNG stations and 2.95 million PNG connections, position them as major players in their respective GAs and collectively in the national CGD landscape. MGL's Mumbai GA is a high-density, mature market, while ATGL's broader, newer GAs represent significant growth potential.

**Competitive Intensity Assessment (Porter's 5 Forces style):** 1. **Threat of New Entrants (Low to Medium):** * **Barriers to Entry:** High capital expenditure for pipeline infrastructure, CNG stations, and last-mile connectivity. Regulatory hurdles (PNGRB authorization for GAs). Long gestation periods for infrastructure development. Complex gas sourcing and supply chain management. * **Mitigation:** While new GAs are periodically auctioned, the scale and existing infrastructure of incumbents create a significant advantage. 2. **Bargaining Power of Buyers (Medium):** * **CGD Customers:** Domestic PNG and CNG customers have limited direct bargaining power due to the essential nature of the service and lack of direct alternatives within a specific GA. However, they are sensitive to price competitiveness against substitute fuels (petrol/diesel, LPG). * **Industrial & Commercial Customers:** Have more bargaining power as they can switch to alternative fuels like LPG, fuel oil, or propane if natural gas prices are not competitive. ATGL notes propane prices becoming very competitive to natural gas for industrial PNG. * **Large Gas Marketers/Transmitters (e.g., GAIL's customers):** May have significant bargaining power due to large volume commitments. 3. **Bargaining Power of Suppliers (Medium to High):** * **Gas Suppliers (Domestic & International):** The price of natural gas (APM, NWG, RLNG, Spot, Brent-linked, Henry Hub-based) is a major cost component. Geopolitical situations can lead to high gas prices, increasing supplier power. Natural gas field depletion also impacts allocation proportionality. * **Infrastructure Suppliers:** For pipelines, compressors, etc., may have some power, but the large scale of projects allows for competitive bidding. 4. **Threat of Substitute Products or Services (Medium to High):** * **CNG:** Faces direct competition from petrol and diesel. MGL's data shows CNG is significantly cheaper (Sep-25: CNG 46.56% of petrol price, Oct-25: 46.56% of petrol price). However, vehicle purchase cost and range anxiety can be factors. The rise of EVs is a long-term threat to all fossil fuels, including CNG. * **Domestic PNG:** Competes with LPG cylinders. MGL's data shows Domestic PNG (INR 10,618/year in Sep-25) is slightly more expensive than Domestic LPG (INR 10,230/year), but offers convenience. * **Industrial & Commercial PNG:** Competes with Commercial LPG, fuel oil, and propane. MGL's data shows Commercial PNG (INR 56.75/SCM in Sep-25) is cheaper than Commercial LPG (INR 83.29/kg). However, ATGL notes propane becoming very competitive. 5. **Rivalry Among Existing Competitors (Medium):** * Within a specific GA, CGD companies typically have a monopoly or duopoly, reducing direct competition. However, competition exists for winning new GAs. * Indirect competition comes from pricing against alternative fuels. * Competition for gas allocation (APM, NWG) from government sources. * Diversification into new areas like EV charging (ATGL) introduces new competitive fronts.

**Entry Barriers and Competitive Moats:** * **Regulatory Moat:** PNGRB authorization for GAs grants exclusive rights for a period, creating a natural monopoly. * **Infrastructure Moat:** Extensive pipeline networks (steel and PE), CNG stations, and established distribution systems are costly and time-consuming to replicate. * **Gas Sourcing & Supply Chain Expertise:** Long-term contracts, diversified sourcing portfolios (APM, RLNG, Spot, various indices), and efficient logistics are critical. * **Brand & Customer Base:** Established players like MGL and ATGL have built significant customer bases and brand recognition. * **Financial Strength:** High capital intensity requires strong financial backing, as demonstrated by GAIL's Maharatna status and ATGL's AA+ credit ratings.

**Pricing Power Dynamics and Pricing Trends:** * **Regulated Pricing:** APM gas prices are regulated by the government, impacting the cost structure for CGD players. * **Market-Determined Pricing:** RLNG, Spot gas, and gas for non-priority segments (I&C) are market-determined, leading to price volatility. * **Competitive Pricing:** CGD companies must balance gas costs with competitive pricing against alternative fuels to attract and retain customers. ATGL's decision to pass on VAT benefits to customers highlights this. * **Tariff Zones:** PNGRB's move from three zones to two zones for transmission tariffs (Zone 1: 0-300 km, Zone 2: rest) will impact CGD for home PNG and CNG, standardizing tariffs across the country for these segments. This could affect margins depending on the GA's location. * **MGL's Pricing Data (Sep-25 / Oct-25):** * CNG vs Petrol: CNG is 46.56% of petrol price. * Commercial PNG vs Commercial LPG: PNG is significantly cheaper (INR 56.75/SCM vs INR 83.29/kg in Sep-25). * Domestic PNG vs Domestic LPG: PNG is slightly more expensive on an annual basis (INR 10,618 vs INR 10,230 in Sep-25) but offers convenience. This data indicates strong price competitiveness for CNG and Commercial PNG, which is a key driver for demand.

**Differentiation Strategies Employed:** * **GAIL:** Differentiation through its integrated value chain (E&P, transmission, marketing, petrochemicals, CGD equity), scale, and strategic investments in Net Zero/Renewables. * **ATGL:** * **Aggressive Expansion:** Rapid addition of CNG stations, PNG connections, and EV charging points. * **Customer-Centricity:** Leading in promotion and discounting schemes (up to 4 years, fleet cards, Independence Day INR 10 price, Diwali scheme). Won PNGRB awards for HSE, sustainability, customer delight. * **Diversification:** Strong push into EV charging infrastructure (4,209 points, target 10,000). Cautious exploration of LNG retailing. * **JV Strategy:** Partnership with IOC (IOAGPL) to enhance utilization and expand reach. * **MGL:** * **Established Market Presence:** Strong hold in high-density Mumbai Metropolitan Region. * **Consistent Track Record:** Over 30 years of consistent growth. * **HSE Commitment:** Strong focus on Health, Safety, and Environment. * **Amalgamation:** Strategic move to expand geographical footprint and customer base.

**Consolidation Trends and M&A Activity:** The amalgamation of erstwhile UEPL with MGL is a clear example of consolidation in the CGD space, allowing MGL to expand its geographical areas and customer base. ATGL's JV with IOC also represents a form of strategic consolidation to leverage combined strengths and expand faster. This trend is likely to continue as smaller, less efficient players may be acquired by larger entities seeking to expand their GAs and achieve economies of scale.

**Competitive Advantages of Each Player:** * **GAIL:** * **Scale and Integration:** Dominant national gas pipeline network, diverse business segments (transmission, marketing, petrochemicals). * **Maharatna Status:** Government backing, access to capital, strategic importance. * **Gas Sourcing Prowess:** Ability to procure gas from diverse domestic and international sources. * **ATGL:** * **Aggressive Growth Strategy:** Rapid infrastructure build-out and customer acquisition. * **Diversification into New Energy:** Early mover advantage in EV charging. * **Strong JV Partner:** Partnership with IOC provides synergy and market reach. * **Customer Focus:** Innovative promotional schemes and service excellence. * **MGL:** * **Dense Market Penetration:** Strong presence in high-demand, mature GAs like Mumbai. * **Operational Efficiency:** Long track record of consistent growth and service delivery. * **Stable Customer Base:** Large, loyal customer base for CNG and PNG. * **Strategic Amalgamation:** Expanded reach and diversified GAs.

D. OPERATIONAL CHARACTERISTICS

Operational efficiency, robust infrastructure, and effective gas sourcing are paramount in the Gas Distribution sector. Companies manage vast networks, complex supply chains, and diverse customer segments, with performance heavily influenced by volume growth, cost management, and technological adoption.

**Capacity and Utilization Trends Across Companies:** * **GAIL (India) Limited:** * **Natural Gas Transmission (MMSCMD):** * FY22: 111 * FY23: 107 * FY24: 120 * FY25: 127 * H1FY26: 122 (Indicating high and relatively stable utilization of its pipeline network) * **Natural Gas Marketing (MMSCMD):** * FY22: 96 * FY23: 95 * FY24: 98 * FY25: 101 * H1FY26: 105 (Consistent growth in marketing volumes, reflecting increasing demand and GAIL's ability to source and supply gas) * **Petrochemicals Sales (TMT):** * FY22: 790 * FY23: 787 * FY24: 845 * FY25: 399 (Significant drop, possibly due to plant shutdowns, maintenance, or market conditions) * H1FY26: 386 (Annualized ~772 TMT, indicating recovery towards previous levels but not yet at FY24 peak) * **Liquid Hydrocarbons Sales (TMT):** * FY22: 1,004 * FY23: 929 * FY24: 998 * FY25: 951 * H1FY26: 420 (Annualized ~840 TMT, indicating a slight decline from FY25) * **LPG Transmission (TMT):** * FY22: 4,199 * FY23: 4,335 * FY24: 4,396 * FY25: 4,478 * H1FY26: 2,298 (Annualized ~4,596 TMT, showing consistent growth in LPG transmission) * **Adani Total Gas Limited (ATGL):** * **Overall volume growth:** 16% year-on-year (H1 FY26). * **CNG volume growth:** 18% year-on-year (Q2 FY26), 19% year-on-year (H1 FY26). * **PNG volume growth:** 11% (Q2 FY26), 9% (H1 FY26). * **New CNG stations added:** 12 in Q2 FY26, total 662 (ATGL standalone), 1,095 (ATGL + IOAGPL JV). * **New home PNG connections added:** nearly 27,000 in Q2 FY26, around 54,000 in H1 FY26, total surpassed 1 million. * **EV charging points installed:** 4,209 (approx. 800 added in Q2 FY26). * **Mahanagar Gas Limited (MGL):** * **Total Volumes (MMSCMD - Amalgamated):** * Q2 FY25: 4.205 * Q1 FY26: 4.454 * Q2 FY26: 4.593 (Consistent quarter-on-quarter growth) * FY 2024: 4.116 * FY 2025: 4.524 (Strong annual growth) * **CNG Volumes (MMSCMD - Amalgamated):** * Q2 FY25: 3.038 * Q1 FY26: 3.185 * Q2 FY26: 3.255 (Consistent growth, forming the bulk of MGL's volumes at 69.87% in Q2 FY26) * **Domestic PNG Volumes (MMSCMD - Amalgamated):** * Q2 FY25: 0.637 * Q1 FY26: 0.698 * Q2 FY26: 0.757 (Strong growth, reflecting increasing household connections) * **I&C Volumes (MMSCMD - Amalgamated):** * Q2 FY25: 0.530 * Q1 FY26: 0.571 * Q2 FY26: 0.582 (Steady growth) * **Cumulative Connections/Stations:** 1.22mn+ CNG vehicles, 2.95mn+ households, 485 CNG stations (amalgamated).

The data indicates high utilization rates for existing infrastructure and continuous expansion of capacity to meet growing demand across all segments.

**Production Economics and Cost Structures:** * **Gas Cost:** This is the most significant component of the cost structure for CGD companies. * **MGL's Standalone Gas Cost (INR/SCM):** * Q2 FY25: 28.96 * Q1 FY26: 32.12 * Q2 FY26: 33.59 (Shows a clear upward trend in gas procurement costs) * **Gas Sourcing Mix:** Companies aim to optimize their gas sourcing portfolio to manage costs. * **ATGL's H1 FY26 Gas Sourcing:** APM and new oil gas combined allocation was 59% (down from 70% previous year), with Q2 at 57%. APM only for CNG (excluding PNG domestic) in Q2 was 35%-36%. PNG domestic allocation was 105%. Brent-linked volumes were around 13%, Henry Hub-based volumes around 16%-17%. This diversified mix helps mitigate price volatility. * **GAIL's H1 FY26 Natural Gas Marketing:** APM/NAPM 49%, RLNG/Spot 35%, RIL & BP MDP 3%, Overseas Sales 13%. * **MGL's Gas Availability:** Secured from APM, HPHT, Term RLNG. Gas for D-PNG is 100% APM allocation. Gas for CNG is partially from APM and balance from Market determined price (Term & SPOT). Non-Priority Segment (I&C) is market determined price. * **Impact on Margins:** Higher gas costs, especially from market-determined sources, can compress margins if not fully passed through to customers. ATGL noted that EBITDA was not growing proportionally to volume due to reduced APM/NWG allocation and dollar appreciation (4%). MGL's declining gross profit per SCM and EBITDA margins in Q2 FY26 directly reflect this challenge. * **Transportation Costs:** ATGL mentioned transportation cost reduction (INR 8 to INR 10 a kg) with online stations, indicating efforts to optimize logistics. * **VAT vs CST:** ATGL's realignment of supply chain for APM and new oil gas resulted in a 2% CST instead of 15% VAT (effective from Oct 1, 2025) for gas supplied outside Gujarat, providing a 13% net benefit. This benefit will be passed through to customers, impacting revenue but improving competitiveness.

**Supply Chain Structure and Dependencies:** * **Gas Sources:** * **Domestic:** ONGC (APM & MDP), Ravva, Ravva satellite, CBM. * **Imported:** Long Term RLNG, RLNG, Spot. * **Transmission:** GAIL's extensive pipeline network is a critical backbone for transporting gas from import terminals and domestic fields to CGD networks. * **Distribution:** CGD companies rely on their own steel and PE pipeline networks for last-mile delivery. * **Dependencies:** The sector is heavily dependent on stable domestic gas production, reliable international LNG supplies, and efficient pipeline infrastructure. Geopolitical events can disrupt LNG supplies and increase prices.

**Technology Landscape and Innovation Pace:** * **Pipeline Technology:** Continuous advancements in pipeline materials (PE for last-mile), monitoring systems, and safety protocols. * **CNG Station Technology:** Faster filling, online stations (reducing transportation costs). * **Smart Metering:** For PNG connections to improve billing accuracy and efficiency. * **Digitalization:** ATGL's focus on customer delight and promotion schemes likely involves digital platforms. * **EV Charging Technology:** Rapid evolution in charging speeds, network management, and payment systems. ATGL's target of 100 megawatt EV capacity soon indicates significant investment in this area. * **Net Zero/Renewables:** GAIL's capex allocation to this segment suggests investment in green hydrogen, biogas, or other renewable gas technologies.

**Operational Efficiency Benchmarks:** * **EBITDA per SCM:** MGL provides this metric (Q2 FY26: 8.00 INR/SCM, H1 FY26: 10.13 INR/SCM), which is a key indicator of operational efficiency in the CGD business. The decline from Q1 FY26 (12.35 INR/SCM) highlights efficiency challenges or cost pressures. * **Network Expansion Rate:** ATGL's addition of 12 CNG stations and 27,000 home PNG connections in a quarter demonstrates rapid deployment capability. * **Customer Acquisition Cost:** Not explicitly provided, but aggressive promotion schemes (ATGL) suggest a focus on efficient customer acquisition.

**Key Performance Indicators (Company-specific and Industry Averages):** * **Volumes (MMSCMD/TMT):** Natural Gas Transmission, Natural Gas Marketing, Petrochemicals Sales, Liquid Hydrocarbons Sales, LPG Transmission (GAIL). Total Volume, CNG Volume, Domestic PNG Volume, I&C Volume (ATGL, MGL). * **Network Size:** Number of CNG stations, PNG home connections, I&C customers, steel and PE pipeline length (ATGL, MGL). * **EV Infrastructure:** Number of EV charging points, installed capacity (ATGL). * **Gas Sourcing Mix:** Proportion of APM, NWG, RLNG, Spot, Brent-linked, Henry Hub-based gas (GAIL, ATGL). * **Safety Metrics:** HSE performance (MGL's commitment, ATGL's PNGRB award).

**Asset Efficiency Metrics:** * **GAIL's Standalone Assets (30th Sep 2025):** INR 1,19,026 crore. * Non-current Assets: INR 99,269 crore (PPE: INR 43,517 crore, CWIP: INR 20,151 crore, Investments: INR 18,761 crore). * The significant CWIP (Capital Work In Progress) indicates ongoing large-scale projects, which will contribute to future asset base and revenue generation. * **MGL's Standalone Total Assets (30th Sep 2025):** INR 8,649 crore. These asset bases underscore the capital-intensive nature and the need for efficient utilization to generate adequate returns.

E. GROWTH DYNAMICS & DRIVERS

The Gas Distribution sector is poised for sustained growth, propelled by a confluence of government initiatives, economic advantages of natural gas, expanding infrastructure, and diversification into new energy segments.

**Historical Growth Trajectory (3-5 year view with specific rates):** * **GAIL (India) Limited:** * Consolidated Turnover: Grew from INR 92,636 crore (FY22) to INR 1,45,531 crore (FY23), then moderated to INR 1,33,130 crore (FY24), and recovered to INR 1,41,949 crore (FY25). This shows a CAGR of approximately 15.5% from FY22 to FY25, with significant volatility in between. * Natural Gas Transmission: Grew from 111 MMSCMD (FY22) to 127 MMSCMD (FY25), a CAGR of 4.6%. * Natural Gas Marketing: Grew from 96 MMSCMD (FY22) to 101 MMSCMD (FY25), a CAGR of 1.7%. * **Adani Total Gas Limited (ATGL):** * Revenue from operations: H1 FY26 grew 20% YoY, Q2 FY26 grew 19% YoY. This indicates strong and consistent double-digit growth. * Overall volume growth: 16% YoY in H1 FY26. * CNG volume growth: 19% YoY in H1 FY26. * PNG volume growth: 9% YoY in H1 FY26. * **Mahanagar Gas Limited (MGL):** * 3 years Revenue CAGR: 27.10%, demonstrating exceptional historical growth. * H1 FY25-26 Revenues: Grew 19.66% YoY. * Total Volumes (Amalgamated): Grew from 4.116 MMSCMD (FY24) to 4.524 MMSCMD (FY25), a 9.9% YoY growth.

The sector has demonstrated robust historical growth, particularly in the CGD segment, driven by increasing penetration and infrastructure development.

**Current Growth Rates and Acceleration/Deceleration:** * Current growth rates for CGD players (ATGL at 19-20% revenue growth, MGL at 14-19% revenue growth) are strong. * GAIL's H1 FY26 consolidated turnover suggests a stable growth trajectory for the full year, potentially matching or slightly exceeding FY25. * The acceleration in CNG vehicle sales (projected 1 to 1.2 million for FY25-26, an 18% jump from 780,000 in FY24-25) indicates an acceleration in demand for vehicular gas. * MGL's Q2 FY26 EBITDA margins show deceleration in profitability growth despite volume growth, highlighting cost pressures.

**Volume vs Price Contribution to Growth:** * **Volume:** Clearly a major contributor to growth. ATGL's overall volume growth of 16% YoY (H1 FY26) and MGL's total volume growth of 9.9% YoY (FY24-FY25) are significant. The increase in CNG stations, PNG connections, and pipeline length directly translates to higher volumes. * **Price:** While prices are competitive, they are also subject to gas costs and regulatory oversight. ATGL noted that EBITDA was not growing proportionally to volume due to a slight reduction in APM vs new well gas allocation and dollar appreciation, implying that price realization or cost management has not kept pace with volume growth in some instances. MGL's declining gross profit per SCM also points to price/cost challenges.

**Organic vs Inorganic Growth Components:** * **Organic Growth:** All companies are pursuing significant organic growth through network expansion (new CNG stations, PNG connections, pipeline laying) in existing and newly awarded GAs. ATGL's rapid addition of EV charging points is also organic diversification. * **Inorganic Growth:** * **MGL's Amalgamation:** The amalgamation of erstwhile UEPL with MGL significantly boosted MGL's geographical reach and customer base, contributing to its strong growth figures. * **ATGL's JV with IOC:** The Indian Oil Adani Gas Private Limited (IOAGPL) JV is a key inorganic strategy, contributing to ATGL's consolidated network and volume growth (IOAGPL volume: 1.8 MMSCMD, 19% growth this quarter). * **GAIL's Equity Investments:** GAIL's consistent equity investments in CGD companies (21% of FY25 Capex, 26% of FY26(E) Capex) represent an inorganic growth strategy to participate in the downstream market.

**Geographic Expansion Opportunities and Progress:** * **ATGL:** Expanding rapidly across 53 GAs and 125 districts. The 11th round GAs are waiting for National Transmission Line connection, indicating future expansion potential. * **MGL:** Expanded beyond its core Mumbai region through the UEPL amalgamation, adding GAs in Ratnagiri, Latur, Osmanabad, Chitradurga, and Davanagere. * **National Gas Grid:** GAIL's pipeline network expansion facilitates gas availability to new regions, enabling CGD expansion.

**Product/Service Innovation Pipeline:** * **EV Charging:** ATGL is a leader in this space, with 4,209 points installed and a target of 10,000. This is a significant diversification into future energy. * **LNG Retailing:** ATGL is cautiously exploring LNG retailing, waiting for business development/OEM commitments. This could be a future growth avenue for long-haul transportation. * **Propane Supply:** ATGL has propane supply on the table, indicating readiness to offer alternative fuels if market conditions are compelling. * **Net Zero/Renewables:** GAIL's capex allocation (6% in FY25, 11% in FY26(E)) signals investment in sustainable energy solutions, potentially including green hydrogen, biogas, or carbon capture.

**Adjacent Market Opportunities:** * **E-mobility:** The most prominent adjacent market, with ATGL making aggressive strides. * **Industrial Fuel Switching:** Continued conversion of industries from polluting liquid fuels to cleaner natural gas. * **Hydrogen Economy:** Long-term potential for natural gas infrastructure to be repurposed or blended with hydrogen.

**Customer Acquisition and Penetration Trends:** * **ATGL:** Added nearly 27,000 home PNG connections in Q2 FY26 (54,000 in H1 FY26), surpassing 1 million total PNG consumers. Added 147 new industrial and commercial consumers in Q2 FY26 (304 in H1 FY26). * **MGL:** Cumulative PNG household connections reached 2.95 million, and CNG vehicles 1.22 million (amalgamated entity). * **New GA Growth (ATGL):** CNG 26%, PNG 99% (due to low base), indicating rapid penetration in new areas. The consistent addition of new connections and customers highlights the ongoing penetration of natural gas in Indian households, industries, and transportation.

F. RISK LANDSCAPE

The Gas Distribution sector, while offering significant growth potential, is exposed to a range of risks, including commodity price volatility, regulatory changes, competitive pressures, and geopolitical factors.

**Industry-wide Systematic Risks:** * **Commodity Price Volatility:** Natural gas prices (both domestic and international LNG) are highly volatile, influenced by global supply-demand dynamics, geopolitical events, and currency fluctuations. High gas prices can squeeze margins for CGD companies if they cannot fully pass on costs to consumers, or reduce the competitiveness of natural gas against alternative fuels. ATGL explicitly mentions geopolitical situations leading to high gas prices as a risk. * **Inflation and Interest Rates:** Rising inflation can increase operational costs and capital expenditure, while higher interest rates can increase borrowing costs for capital-intensive projects. * **Economic Slowdown:** A general economic slowdown can reduce industrial demand for gas and impact consumer spending on vehicles (affecting CNG sales) or household connections.

**Cyclicality and Economic Sensitivity:** * **Gas Prices:** As noted, gas prices are cyclical. The significant drop in GAIL's profitability in FY23 (PAT down from INR 10,364 Cr in FY22 to INR 5,302 Cr) illustrates the sector's sensitivity to gas price cycles. * **Industrial Demand:** Industrial gas consumption is linked to manufacturing activity, making it sensitive to economic cycles. * **Petrochemicals:** GAIL's petrochemical segment is highly cyclical, influenced by crude oil prices, naphtha prices, and polymer demand. The drop in GAIL's petrochemical sales in FY25 (from 845 TMT in FY24 to 399 TMT) could be indicative of such cyclicality or operational issues.

**Regulatory and Policy Risks by Geography:** * **Gas Allocation Policy:** Changes in government policy regarding the allocation of cheaper APM (Administered Price Mechanism) gas and New Well Gas (NWG) to CGD companies directly impact their cost structure and profitability. ATGL noted a reduction in APM and NWG combined allocation from 70% (previous year) to 59% (H1 FY26), which impacted its EBITDA proportionality. The industry hopes for stabilization of APM and new well gas allocation. * **Tariff Regulations:** PNGRB's decisions on transmission tariffs (e.g., moving from three zones to two zones for CGD for home PNG and CNG) can affect profitability and pricing strategies across different geographical areas. ATGL expects Zone 1 tariff implementation sooner than later after industry consultations. * **Taxation:** Changes in VAT/CST or other taxes can impact the cost of gas. ATGL's 13% net benefit from VAT vs CST realignment highlights the importance of tax policies. * **Environmental Regulations:** Stricter environmental norms, while generally favorable to natural gas as a cleaner fuel, could also introduce new compliance costs or impact related segments.

**Technology Disruption Threats:** * **Electric Vehicles (EVs):** The rapid growth of EVs poses a long-term threat to CNG as a vehicular fuel. While ATGL is diversifying into EV charging, this also represents a competitive threat to its core CNG business. CNG vehicle sales are projected to grow (1 to 1.2 million in FY25-26), but the long-term trajectory of EV adoption is a key monitorable. * **Renewable Energy:** Advancements in solar, wind, and battery storage could reduce demand for gas-fired power generation in the long run. * **Alternative Fuels:** Development of cost-effective green hydrogen or other synthetic fuels could eventually challenge natural gas.

**ESG and Sustainability Challenges:** * **Methane Emissions:** Natural gas is primarily methane, a potent greenhouse gas. Fugitive emissions from pipelines and infrastructure pose an environmental challenge. * **Transition Risk:** While natural gas is considered a transition fuel, the long-term push towards net-zero emissions could eventually pressure investments in gas infrastructure. GAIL's investment in Net Zero/Renewables (11% of FY26(E) Capex) indicates awareness of this. * **Health and Safety:** Operating extensive gas networks carries inherent risks of leaks, fires, and explosions, necessitating a strong focus on Health, Safety, and Environment (HSE), as emphasized by MGL and ATGL.

**Supply Chain Vulnerabilities:** * **Import Dependency:** India relies on imported LNG, making the supply chain vulnerable to global market disruptions, shipping issues, and geopolitical tensions. * **Domestic Gas Depletion:** Natural gas field depletion can impact the proportionality of APM/NWG allocation, forcing reliance on more expensive market-determined gas. * **Infrastructure Bottlenecks:** Delays in pipeline connectivity (e.g., ATGL's 11th round GAs waiting for National Transmission Line connection) can hinder expansion.

**Competitive Threats (New Entrants, Substitutes):** * **Substitutes:** As discussed in Section C, petrol, diesel, LPG, and propane are direct substitutes. The competitive positioning of CNG vs petrol/diesel and PNG vs LPG/commercial alternatives is crucial. ATGL notes propane prices becoming very competitive to natural gas for industrial PNG. * **New Entrants:** While high entry barriers exist for CGD, new players can emerge in new GAs or in adjacent segments like EV charging.

**Customer Concentration Risks:** * **GAIL:** Major demand from Fertiliser and CGD companies. Any significant policy change or demand reduction from these sectors could impact GAIL. * **CGD Players:** While they have a diversified customer base (CNG, domestic PNG, I&C), a significant portion of their revenue often comes from CNG, making them sensitive to changes in vehicular fuel preferences or policies.

G. CAPITAL ALLOCATION & INVESTOR RETURNS

Capital allocation in the Gas Distribution sector is heavily skewed towards infrastructure development, reflecting the capital-intensive nature of the business. Companies balance growth investments with shareholder returns, while maintaining prudent financial health.

**Capex Trends and Requirements (Growth vs Maintenance):** * **GAIL (India) Limited:** Demonstrates a clear strategic allocation of capital, with a significant portion dedicated to growth projects. * **Total Capex:** INR 10,512 crore in FY25, estimated ~INR 10,700 crore in FY26. This consistent high capex indicates ongoing expansion and modernization. * **Growth-Oriented Capex:** * **Pipelines:** 44% in FY25 (INR 4,570 Cr), 18% in FY26(E) (INR 1,900 Cr). While a core asset, new pipelines are primarily for network expansion. The relative decrease in FY26(E) might suggest completion of major trunk lines or a shift in focus. * **City Gas Distribution (Equity):** 21% in FY25 (INR 2,244 Cr), 26% in FY26(E) (INR 2,750 Cr). This is a direct investment in the high-growth CGD segment. * **Petrochemical:** 25% in FY25 (INR 2,653 Cr), 28% in FY26(E) (INR 3,000 Cr). Significant investment in expanding or upgrading petrochemical facilities. * **E&P:** 2% in FY25 (INR 237 Cr), 13% in FY26(E) (INR 1,400 Cr). A substantial increase, indicating a renewed focus on upstream activities for gas sourcing. * **Net Zero/Renewables:** 6% in FY25 (INR 618 Cr), 11% in FY26(E) (INR 1,200 Cr). A rapidly increasing allocation, highlighting strategic diversification into sustainable energy. * **Equity Investments:** 1% in FY25 (INR 113 Cr), 2% in FY26(E) (INR 200 Cr). For strategic stakes in other companies. * **Maintenance Capex:** Operational Capex & Others (1% in FY25, 2% in FY26(E)) likely covers maintenance and minor upgrades. * **ATGL:** Continuously invests in expanding its CGD network (CNG stations, PNG connections, pipelines) and EV charging infrastructure. This is primarily growth capex. * **MGL:** Total Assets increased from INR 8,284 crore (Mar 2025) to INR 8,649 crore (Sep 2025), reflecting ongoing capital deployment.

The sector's high capex requirements are a testament to its growth phase and the need to build out extensive infrastructure.

**R&D Investment Levels as % of Revenue:** No specific R&D investment figures are provided. However, GAIL's allocation to Net Zero/Renewables and ATGL's aggressive push into EV charging suggest investments in innovation and new technology adoption, which could be considered R&D-like expenditures.

**Dividend Policies and Payout Ratios:** * **Mahanagar Gas Limited (MGL):** Has a consistent track record of paying dividends, indicating a shareholder-friendly policy. * FY 20: Normal (20 Rs), Special (15 Rs) * FY 21: Normal (23 Rs) * FY 22: Normal (25 Rs) * FY 23: Normal (26 Rs) * FY 24: Normal (30 Rs) * FY 25: Normal (30 Rs) This shows a steady increase in normal dividend per share over the years, reflecting healthy cash generation and profitability. * No dividend information is provided for GAIL or ATGL in the extracted data, but as established companies, they likely have dividend policies.

**Share Buyback Programs:** No information on share buyback programs is provided in the extracted data.

**M&A Activity and Strategy:** * **MGL:** The amalgamation of erstwhile UEPL is a significant M&A activity, aimed at expanding geographical reach and consolidating market position. * **ATGL:** Its 50-50 JV with Indian Oil Corporation (IOAGPL) is a strategic partnership for growth and market penetration, akin to an M&A in terms of shared operations and capital. * **GAIL:** Its equity investments in CGD companies can be seen as a form of strategic M&A or partnership to gain exposure to the downstream market. The trend suggests that M&A and JVs are key strategies for inorganic growth and market consolidation in the CGD segment.

**Cash Generation and Free Cash Flow Profiles:** While explicit free cash flow figures are not provided, the healthy PAT and EBITDA figures across companies (e.g., GAIL's consolidated PAT of INR 12,450 crore in FY25, ATGL's H1 FY26 PAT of INR 324 crore, MGL's H1 FY26 PAT of INR 512.93 crore) indicate strong operational cash generation. However, the high capital expenditure requirements mean that a significant portion of this cash is reinvested into the business for growth. GAIL's low debt-equity ratio (H1 FY26: 0.23) suggests strong internal accruals and financial prudence.

**Capital Efficiency Improvements:** * **ATGL's Credit Rating Upgrade:** Upgraded to AA+ stable by ICRA, CARE, and CRISIL, indicates improved financial health and capital efficiency, potentially leading to lower cost of debt. * **Optimizing Gas Sourcing:** Companies like ATGL and MGL continuously optimize their gas sourcing mix (APM, NWG, RLNG, Spot) to manage costs and improve profitability per unit of gas sold. * **Operational Efficiency:** Efforts to reduce transportation costs (ATGL's online stations), improve network utilization, and streamline operations contribute to better capital efficiency. * **Technology Adoption:** Investing in advanced pipeline materials, smart metering, and digital platforms can enhance asset utilization and reduce operational costs over the long term.

H. FUTURE OUTLOOK & PROJECTIONS

The future outlook for the Gas Distribution sector in India remains positive, underpinned by strong government support, increasing demand for cleaner fuels, and strategic diversification initiatives. Companies are focused on expanding their networks, optimizing gas sourcing, and exploring new growth avenues.

**Industry Growth Projections (with timeframes):** * **CNG Vehicle Sales:** Projected to reach 1 to 1.2 million in FY25-26, representing an 18% jump from 780,000 in FY24-25. This indicates strong growth in the vehicular segment. * **CGD Network Expansion:** Continued rapid expansion of CNG stations, PNG connections, and pipeline infrastructure is expected as new GAs are developed and existing ones deepen penetration. * **EV Charging:** ATGL's target of 10,000 EV charging points and 100 megawatt capacity soon indicates aggressive growth in this emerging segment. * **Overall Volume Growth:** ATGL is confident of delivering double-digit or impressive volume growth. MGL's historical CAGR of 27.10% and recent 19.66% YoY revenue growth suggest continued strong performance.

**Management Guidance Across Companies:** * **ATGL:** * **Volume Growth:** Confident of delivering double-digit or impressive volume growth. * **Regulatory Environment:** Expects Zone 1 tariff implementation sooner than later, after industry consultations. Hopes for stabilization of APM and new well gas allocation. * **Government Support:** Believes government and regulator focus on CGD remains strong, with continued focus on priority home PNG and CNG. * **Pricing:** Aim to remain relevant in the market for all consumer segments by maintaining prudent pricing. * **JV Performance:** JV EBITDA is growing, expects PAT to follow in a couple of more quarters. * **Gas Sourcing:** Will continue with a mixture of portfolio and flexible contractual operations, maximizing cheaper allocation (APM, NWG) and optimizing other indices (Brent, Henry Hub). * **MGL:** * **HSE Commitment:** Strong focus on Health, Safety, and Environment. * **Revenue Adjustments:** Net Revenue (CY Q1 & PY Q4) includes reversal of OMC Trade Margin provided earlier. Comparative financial information for amalgamated entity has been restated. * **GAIL:** Scheduled an Earnings Conference Call Presentation for Q2 FY 2025-26 on Friday, 31st October 2025, to discuss financial results and operational performance. This indicates ongoing communication and transparency regarding its outlook.

**Emerging Opportunities and Whitespace:** * **E-mobility Infrastructure:** The rapid expansion of EV charging networks (ATGL) presents a significant whitespace opportunity. * **LNG as a Transportation Fuel:** LNG retailing for long-haul heavy vehicles is an emerging area, which ATGL is cautiously exploring. * **Propane as an Alternative:** ATGL keeping propane supply on the table indicates flexibility to cater to industrial demand with alternative fuels if competitive. * **Green Hydrogen/Biogas:** GAIL's increasing capex in Net Zero/Renewables suggests future opportunities in these areas, aligning with India's broader energy transition goals. * **New Geographical Areas:** Continued PNGRB bidding rounds for new GAs will open up fresh markets for CGD players.

**Transformation Themes and Inflection Points:** * **Energy Transition:** The overarching theme is the shift towards a gas-based economy and eventually, a net-zero future. Natural gas acts as a crucial transition fuel. * **Digitalization:** Adoption of smart technologies for network management, customer service, and operational efficiency. * **Diversification:** CGD companies diversifying into adjacent energy services (like EV charging) to future-proof their businesses. * **Regulatory Evolution:** PNGRB's tariff reforms (e.g., zone changes) will streamline the regulatory landscape and potentially impact business models.

**Long-term Structural Trends (5-10 year view):** * **Increasing Gas Penetration:** Continued growth in household, industrial, and vehicular gas consumption, driven by urbanization, industrialization, and environmental awareness. * **Infrastructure Build-out:** Expansion of the national gas grid and CGD networks to cover more regions and districts. * **Cleaner Fuels Mandate:** Government push for cleaner fuels will favor natural gas over polluting alternatives. * **Integration of Renewables:** Natural gas infrastructure may play a role in supporting intermittent renewable energy sources or blending with green hydrogen. * **Competitive Landscape Evolution:** Further consolidation in the CGD sector and emergence of new players in niche segments.

**Potential Disruptions on the Horizon:** * **Rapid EV Adoption:** Faster-than-expected adoption of EVs could significantly impact CNG demand in the long term. * **Breakthrough in Green Hydrogen:** If green hydrogen production becomes economically viable at scale, it could eventually displace natural gas in some applications. * **Geopolitical Instability:** Prolonged global energy crises or supply chain disruptions could severely impact gas availability and prices.

**Expected Margin Evolution:** * Margins for CGD players are expected to remain sensitive to gas sourcing costs (APM vs market-determined gas) and the ability to pass on costs to consumers while remaining competitive. * Regulatory changes (like Zone 1 tariff) could standardize margins for priority segments. * Diversification into new, higher-margin segments (like EV charging) could help offset potential pressures on core gas distribution margins. * GAIL's margins will continue to be influenced by the cyclicality of its petrochemical business and the stability of its transmission and marketing segments.

I. COMPANY-BY-COMPANY PROFILES

GAIL (India) Limited

**Brief Description:** GAIL (India) Limited is a Maharatna Company and a Government of India Undertaking, serving as India's leading natural gas company. It operates across the entire natural gas value chain, including transmission, marketing, processing (LPG, Liquid Hydrocarbons, Petrochemicals), and has significant equity interests in City Gas Distribution (CGD) projects. It is a critical player in India's energy infrastructure.

**Scale Metrics:** * **Consolidated Turnover (FY25):** INR 1,41,949 crore (H1 FY26: INR 70,964 crore) * **Standalone Assets (30th Sep 2025):** INR 1,19,026 crore * **Natural Gas Transmission (FY25):** 127 MMSCMD (H1 FY26: 122 MMSCMD) * **Natural Gas Marketing (FY25):** 101 MMSCMD (H1 FY26: 105 MMSCMD) * **LPG Transmission (FY25):** 4,478 TMT (H1 FY26: 2,298 TMT) * **Petrochemicals Sales (FY25):** 399 TMT (H1 FY26: 386 TMT) * **Market Capitalization (H1 FY26):** INR 1,15,853 crore

**Financial Performance Summary:** * **Consolidated Turnover Growth (FY22-FY25 CAGR):** ~15.5% * **Consolidated EBITDA (FY25):** INR 20,643 crore (H1 FY26: INR 8,210 crore) * **Consolidated PAT (FY25):** INR 12,450 crore (H1 FY26: INR 4,342 crore) * **Standalone PAT to Net Worth (FY25):** 18% (H1 FY26: 12%) * **Standalone Return on Capital Employed (FY25):** 17% (H1 FY26: 12%) * **Standalone Debt Equity Ratio (H1 FY26):** 0.23 (indicating a strong balance sheet) * **EPS (FY25):** 17 Rs/Share (H1 FY26: 12 Rs/Share) GAIL's financials show strong recovery in FY24-FY25 after a dip in FY23, demonstrating resilience and effective management of its diverse portfolio.

**Strategic Priorities and Focus Areas:** * **Infrastructure Expansion:** Continued investment in pipelines (18% of FY26(E) Capex) to expand the national gas grid. * **CGD Growth:** Significant equity investments in City Gas Distribution (26% of FY26(E) Capex) to capitalize on downstream market growth. * **Petrochemicals:** Sustained investment in petrochemicals (28% of FY26(E) Capex) as a core business segment. * **Upstream Focus:** Increased capex in E&P (13% of FY26(E) Capex) to secure gas sourcing. * **Energy Transition:** Aggressive push into Net Zero/Renewables (11% of FY26(E) Capex), indicating a strategic shift towards sustainable energy solutions. * **Gas Sourcing:** Diversified gas sourcing strategy including APM/NAPM, RLNG/Spot, RIL & BP MDP, and Overseas Sales.

**Competitive Advantages and Positioning:** * **Dominant Market Position:** Maharatna status and control over the national gas transmission backbone provide a significant competitive moat. * **Integrated Value Chain:** Presence across E&P, transmission, marketing, and processing offers synergies and risk diversification. * **Financial Strength:** Strong balance sheet and access to capital for large-scale projects. * **Strategic Investments:** Equity stakes in CGD companies provide exposure to the rapidly growing downstream market.

**Key Metrics and KPIs Specific to the Company:** * Natural Gas Transmission Volumes (MMSCMD) * Natural Gas Marketing Volumes (MMSCMD) * Petrochemicals Sales (TMT) * LPG Transmission Volumes (TMT) * Capital Expenditure Profile by segment

**Management Outlook and Guidance:** Management regularly communicates performance through earnings calls (Q2 FY 2025-26 call scheduled on Oct 31, 2025). The capex plan indicates a clear growth-oriented outlook, with increasing focus on future energy segments like renewables and E&P.

**Recent Developments and Initiatives:** * Significant capital allocation towards Net Zero/Renewables and E&P in FY26(E). * Consistent growth in LPG transmission volumes. * Recovery in petrochemical sales towards previous levels.

Adani Total Gas Limited (ATGL)

**Brief Description:** Adani Total Gas Limited (ATGL) is a leading City Gas Distribution (CGD) company in India, focused on distributing natural gas (CNG and PNG) to industrial, commercial, domestic, and vehicular customers. It is rapidly diversifying into the e-mobility sector with an extensive EV charging network. ATGL operates through its standalone entity and a 50-50 Joint Venture with Indian Oil Corporation (IOAGPL).

**Scale Metrics:** * **Revenue from operations (H1 FY26):** INR 3,060 crore (Q2 FY26: INR 1,569 crore) * **Total ATGL CNG stations:** 662 (Consolidated ATGL + IOAGPL: 1,095) * **Total ATGL PNG consumers:** Surpassed 1 million (Consolidated ATGL + IOAGPL: 1.2 million+) * **Total ATGL industrial and commercial consumers:** 9,603 * **Steel pipeline infrastructure (ATGL):** 14,524-inch kilometers (Consolidated ATGL + IOAGPL: 26,411-inch kilometers) * **EV charging points installed:** 4,209 (H1 FY26) * **EV installed capacity:** 42 megawatt

**Financial Performance Summary:** * **Revenue Growth (H1 FY26):** 20% YoY * **EBITDA (H1 FY26):** INR 603 crore (Q2 FY26: INR 302 crore) * **Overall EBITDA margin:** around 20% * **Overall gross margin:** 29% * **PAT (H1 FY26):** INR 324 crore (Q2 FY26: INR 162 crore) ATGL demonstrates strong revenue and volume growth, maintaining healthy EBITDA margins despite gas cost pressures.

**Strategic Priorities and Focus Areas:** * **Aggressive CGD Expansion:** Rapidly adding CNG stations (12 in Q2 FY26) and home PNG connections (27,000 in Q2 FY26) across its 53 GAs. * **E-mobility Leadership:** Targeting 10,000 EV charging points and 100 megawatt capacity soon, adding 800 points in Q2 FY26. This is a key diversification strategy. * **Customer-Centricity:** Implementing promotion and discounting schemes to attract and retain customers, winning PNGRB awards for customer delight. * **Optimized Gas Sourcing:** Managing a diversified gas sourcing portfolio (APM, NWG, Brent-linked, Henry Hub-based) to mitigate price volatility. * **JV Synergy:** Leveraging the 50-50 JV with Indian Oil Corporation (IOAGPL) to enhance utilization and expand market reach. * **Prudent Pricing:** Maintaining competitive pricing against alternative fuels.

**Competitive Advantages and Positioning:** * **Rapid Growth & Scale:** One of the fastest-growing CGD networks with a significant national footprint. * **First-Mover in E-mobility:** Strong position in the nascent but high-potential EV charging market. * **Strategic Partnership:** JV with IOC provides access to resources and market intelligence. * **Strong Credit Profile:** Upgraded to AA+ stable by ICRA, CARE, and CRISIL, indicating financial robustness. * **Customer Focus:** Differentiated by aggressive marketing and customer engagement.

**Key Metrics and KPIs Specific to the Company:** * Overall Volume Growth (YoY) * CNG Volume Growth (YoY) * PNG Volume Growth (YoY) * Number of new CNG stations added * Number of new home PNG connections added * Number of EV charging points installed and capacity * Gas Sourcing Portfolio mix

**Management Outlook and Guidance:** * Confident of delivering double-digit volume growth. * Expects Zone 1 tariff implementation for CGD. * Hopes for stabilization of APM and new well gas allocation. * JV EBITDA growing, with PAT expected to follow. * Continued focus on prudent pricing and market relevance.

**Recent Developments and Initiatives:** * Realignment of supply chain for VAT benefit (2% CST instead of 15% VAT) for gas supplied outside Gujarat, effective Oct 1, 2025. * Surpassed 1 million total PNG consumers. * Aggressive expansion of EV charging network (4,209 points installed). * Won three PNGRB awards for CGD development.

Mahanagar Gas Limited (MGL)

**Brief Description:** Mahanagar Gas Limited (MGL) is one of the largest City Gas Distribution (CGD) companies in India, with a dominant presence in the Mumbai Metropolitan Region (Mumbai, Thane, Raigad). Through its recent amalgamation with erstwhile UEPL, it has expanded its geographical footprint to include GAs in Karnataka and Maharashtra. MGL supplies CNG for vehicles and PNG for domestic, commercial, and industrial use.

**Scale Metrics:** * **Standalone Revenues (H1 FY25-26):** INR 4,130.71 crore (Q2 FY25-26: INR 2,049.33 crore) * **Amalgamated Entity Area:** 45,691 sq Km * **Amalgamated Entity CNG Stations:** 485 * **Amalgamated Entity CNG Vehicles:** 1.22 million+ * **Amalgamated Entity PNG Household Connections:** 2.95 million+ * **Amalgamated Entity Industrial Commercial Customers:** 5,340 * **Amalgamated Entity Steel Pipeline Length:** 701 Km * **Amalgamated Entity PE Pipeline Length:** 7,361 Km * **Total Volumes (Amalgamated, Q2 FY26):** 4.593 MMSCMD * **Market Capitalisation (Jun-25):** INR 14,651 crore

**Financial Performance Summary:** * **3 years Revenue CAGR:** 27.10% * **RoE (FY25):** 18.91% * **Standalone Revenues Growth (H1 FY25-26):** 19.66% YoY * **Standalone EBITDA (H1 FY25-26):** INR 838.66 crore (Q2 FY25-26: INR 337.95 crore) * **Standalone EBITDA Margins (H1 FY25-26):** 20.30% (Q2 FY25-26: 16.49%) * **Standalone PAT (H1 FY25-26):** INR 512.93 crore (Q2 FY25-25: INR 193.37 crore) * **Standalone EPS (H1 FY25-26):** 51.93 Rs/Share (Q2 FY25-26: 19.58 Rs/Share) MGL has a strong revenue growth trajectory and healthy return on equity. However, recent quarters show pressure on EBITDA margins and per-unit profitability due to rising gas costs.

**Strategic Priorities and Focus Areas:** * **Market Deepening:** Continued penetration in its core, high-density GAs (Mumbai, Thane, Raigad). * **Geographical Expansion:** Expanding into new GAs (Latur, Osmanabad, Ratnagiri, Davengere, Chitradurga) through the amalgamation of erstwhile UEPL. * **Operational Excellence:** Focus on Health, Safety, and Environment (HSE) and maintaining a consistent track record of growth. * **Gas Sourcing:** Securing gas availability from diverse sources (APM, HPHT, Term RLNG) to ensure supply stability. * **Competitive Pricing:** Leveraging the economic benefits of natural gas to maintain price competitiveness against alternative fuels.

**Competitive Advantages and Positioning:** * **Established Market Leader:** Dominant position in a mature, high-demand metropolitan area. * **Extensive Network:** Large existing infrastructure and customer base provide a strong moat. * **Consistent Performance:** Over 30 years of consistent growth and operational stability. * **Shareholder Returns:** Consistent dividend payout policy. * **Strategic Amalgamation:** Enhanced scale and diversified geographical presence.

**Key Metrics and KPIs Specific to the Company:** * Total Volumes (MMSCMD) by segment (CNG, Domestic, I&C) * Cumulative Domestic Household Connections * Cumulative CNG Vehicles and Stations * Cumulative Industrial & Commercial Customers * Gas Cost (INR/SCM) and Gross Profit (Gas Sales Less Gas Cost) (INR/SCM) * EBITDA (INR/SCM)

**Management Outlook and Guidance:** Management emphasizes its commitment to HSE and provides detailed financial and operational performance updates. The amalgamation is expected to contribute to future growth, though recent margin pressures are a key focus.

**Recent Developments and Initiatives:** * Amalgamation of erstwhile UEPL, significantly expanding its operational footprint and customer base. * Consistent increase in dividend per share over the years. * Continuous expansion of CNG stations and PNG connections in its GAs.

J. TABLES

Table 1: GAIL (India) Limited - Standalone Financial Metrics Summary

| Metric | FY22 | FY23 | FY24 | FY25 | H1 FY26 | | :----------------------------------- | :---------- | :---------- | :---------- | :---------- | :---------- | | Turnover (Gross) (Rs. crore) | 91,426 | 1,43,976 | 1,30,284 | 1,36,960 | 69,707 | | Gross Margin (EBITDA) (Rs. crore) | 15,876 | 9,384 | 15,583 | 19,168 | 7,609 | | PBT (Rs. crore) | 13,590 | 6,584 | 11,555 | 14,825 | 5,357 | | PAT (Rs. crore) | 10,364 | 5,302 | 8,836 | 11,312 | 4,104 | | PAT to Net Worth (%) | 21 | 10 | 16 | 18 | 12 | | Return on Capital Employed (%) | 20 | 10 | 14 | 17 | 12 | | Debt Equity Ratio | 0.15 | 0.22 | 0.29 | 0.26 | 0.23 | | Share Price (Rs./Share) | 105 | 105 | 181 | 183 | 176 | | Earning Per Share (/Share) | 23 | 8 | 13 | 17 | 12 | | Market Capitalization (/Crore) | 69,203 | 69,137 | 1,19,108 | 1,20,160 | 1,15,853 |

Table 2: GAIL (India) Limited - Consolidated Financial Metrics Summary

Table 3: GAIL (India) Limited - Standalone Assets & Liabilities (30th Sep 2025)

| Category | Amount (Rs crore) | | :------------------------ | :---------------- | | **Total Assets** | **1,19,026** | | Non-current Assets | 99,269 | |    PPE | 43,517 | |    CWIP | 20,151 | |    Investments | 18,761 | |    Others | 16,841 | | Current Assets | 19,757 | | **Total Equity & Liabilities** | **1,19,026** | | Equity | 73,635 | |    Equity Share Capital | 6,575 | |    Other Equity | 67,060 | | Liabilities | 45,391 | |    Non Current Liabilities | 22,894 | |    Current Liabilities | 22,497 | | Capital Employed | 94,140 | | Net Worth | 66,687 | | LT Loan Outstanding | 10,588 |

Table 4: GAIL (India) Limited - Capital Expenditure Profile

| Category | FY 2024-25 (Crore) | % | FY 2025-26 (E) (Crore) | % | | :---------------------- | :----------------- | :--- | :--------------------- | :--- | | **Total Capex** | **10,512** | **100** | **~10,700** | **100** | | Pipeline | 4,570 | 44 | 1,900 | 18 | | City Gas Distribution (Equity) | 2,244 | 21 | 2,750 | 26 | | Petrochemical | 2,653 | 25 | 3,000 | 28 | | E&P | 237 | 2 | 1,400 | 13 | | Net Zero/Renewables | 618 | 6 | 1,200 | 11 | | Equity Investments | 113 | 1 | 200 | 2 | | Operational Capex & Others | 77 | 1 | 250 | 2 |

Table 5: GAIL (India) Limited - Operational Metrics

| Metric | FY22 | FY23 | FY24 | FY25 | H1FY26 | | :---------------------------- | :---- | :---- | :---- | :---- | :----- | | Natural Gas Transmission (MMSCMD) | 111 | 107 | 120 | 127 | 122 | | Natural Gas Marketing (MMSCMD) | 96 | 95 | 98 | 101 | 105 | | Petrochemicals Sales (TMT) | 790 | 787 | 845 | 399 | 386 | | Liquid Hydrocarbons Sales (TMT) | 1,004 | 929 | 998 | 951 | 420 | | LPG Transmission (TMT) | 4,199 | 4,335 | 4,396 | 4,478 | 2,298 |

Table 6: GAIL (India) Limited - Natural Gas Transmission & Marketing Mix (H1 FY'26)

| Segment | Transmission (MMSCMD) | % | Marketing (MMSCMD) | % | | :---------------------------- | :-------------------- | :-- | :----------------- | :-- | | APM/NAPM | 72% | | 49% | | | RLNG/Spot | 26% | | 35% | | | RIL & BP MDP | 2% | | 3% | | | Overseas Sales | - | | 13% | | | **Total** | **122.11** | | **105.47** | |

Table 7: GAIL (India) Limited - Natural Gas Marketing - Sector Wise Supply (MMSCMD)

| Sector | H1 FY'25 (98.02 MMSCMD) | % | H1 FY'26 (105.47 MMSCMD) | % | | :-------------- | :---------------------- | :-- | :----------------------- | :-- | | Fertilizers | 37.04 | 38 | 34.78 | 33 | | Power | 14.02 | 14 | 10.92 | 10 | | CGD | 26.75 | 27 | 28.86 | 27 | | Overseas Sales | 4.11 | 4 | 13.58 | 13 | | Others* | 16.10 | 17 | 17.33 | 17 | | Total APM/NAPM | 4.11 | 4 | 13.58 | 12 | | Total RLNG | 54.59 | 56 | 52.27 | 50 | | Total Domestic | 39.32 | 40 | 39.62 | 38 |

Table 8: Adani Total Gas Limited (ATGL) - Financial Metrics Summary

| Metric | Q2 FY26 (INR Cr) | H1 FY26 (INR Cr) | YoY Growth (H1 FY26) | | :-------------------------- | :--------------- | :--------------- | :------------------- | | Revenue from operations | 1,569 | 3,060 | 20% | | EBITDA | 302 | 603 | - | | EBITDA margin | ~20% | ~20% | - | | Gross margin | 29% | 29% | - | | Profit before tax (PBT) | 217 | 436 | - | | Profit after tax (PAT) | 162 | 324 | - |

Table 9: Adani Total Gas Limited (ATGL) - Operational Metrics Summary

| Metric | Q2 FY26 | H1 FY26 | YoY Growth (H1 FY26) | | :-------------------------------------- | :----------- | :----------- | :------------------- | | Overall volume growth | - | 16% | 16% | | CNG volume growth | 18% | 19% | 19% | | PNG volume growth | 11% | 9% | 9% | | New CNG stations added | 12 | - | - | | Total ATGL CNG stations | 662 | - | - | | CODO/DODO CNG stations | 129 | - | - | | Steel pipeline infrastructure (ATGL) | 14,524-inch km | - | - | | New home PNG connections added | ~27,000 | ~54,000 | - | | Total ATGL PNG consumers | >1 million | >1 million | - | | Total ATGL industrial & commercial consumers | 9,603 | - | - | | New industrial & commercial consumers added | 147 | 304 | - | | EV charging points installed | 4,209 | 4,209 | - | | EV installed capacity | 42 megawatt | 42 megawatt | - |

Table 10: Adani Total Gas Limited (ATGL) - Consolidated Nationwide CGD Network (ATGL + IOAGPL)

Table 11: Adani Total Gas Limited (ATGL) - Gas Sourcing & Allocation (H1 FY26)

| Metric | Previous Year | H1 FY26 | Q1 FY26 | Q2 FY26 | | :----------------------------------- | :------------ | :------ | :------ | :------ | | APM and new oil gas combined allocation | 70% | 59% | 60% | 57% | | APM only for CNG (excl. PNG domestic) | - | - | - | 35%-36% | | PNG domestic allocation | - | - | - | 105% | | Brent-linked volumes | - | ~13% | - | - | | Henry Hub-based volumes | - | ~16-17% | - | - |

Table 12: Adani Total Gas Limited (ATGL) - Volume Composition (H1 FY26)

| Segment | % of Total Volume | | :-------------------- | :---------------- | | PNG domestic | ~7% | | PNG industrial | 22% | | Total PNG | 31% | | CNG | 69% |

Table 13: Mahanagar Gas Limited (MGL) - Standalone Financial Metrics Summary

| Metric | Q2 FY25-26 (Cr) | Q2 FY24-25 (Cr) | YoY Growth (%) | Q1 FY25-26 (Cr) | QoQ Growth (%) | H1 FY25-26 (Cr) | H1 FY24-25 (Cr) | YoY Growth (%) | | :-------------------------- | :-------------- | :-------------- | :------------- | :-------------- | :------------- | :-------------- | :-------------- | :------------- | | Revenues | 2,049.33 | 1,786.25 | 14.73 | 2,081.38 | -1.54 | 4,130.71 | 3,452.01 | 19.66 | | Gross Profit | 624.59 | 660.57 | -5.45 | 771.67 | -19.06 | 1,396.26 | 1,321.24 | 5.68 | | EBITDA | 337.95 | 413.47 | -18.27 | 500.71 | -32.51 | 838.66 | 850.28 | -1.37 | | EBITDA Margins | 16.49% | 23.15% | - | 24.06% | - | 20.30% | 24.63% | - | | PBT | 258.01 | 372.90 | -30.81 | 432.22 | -40.31 | 690.23 | 759.76 | -9.15 | | PAT | 193.37 | 286.78 | -32.58 | 319.56 | -39.49 | 512.93 | 575.96 | -10.94 | | EPS | 19.58 | 29.04 | -32.59 | 32.35 | -39.49 | 51.93 | 58.31 | -10.95 |

Table 14: Mahanagar Gas Limited (MGL) - Standalone Per Unit Metrics (INR/SCM)

| Metric | Q2 FY25 | Q1 FY26 | Q2 FY26 | H1 FY25 | H1 FY26 | | :----------------------------------- | :------ | :------ | :------ | :------ | :------ | | Revenues (Net) | 46.17 | 51.36 | 48.49 | 45.83 | 49.90 | | Gas Cost | 28.96 | 32.12 | 33.59 | 28.16 | 32.87 | | Gross Profit (Gas Sales Less Gas Cost) | 17.07 | 19.04 | 14.78 | 17.54 | 16.87 | | EBITDA | 10.69 | 12.35 | 8.00 | 11.29 | 10.13 |

Table 15: Mahanagar Gas Limited (MGL) - Amalgamated Entity Operational Overview

| Metric | Value | | :-------------------------- | :----------- | | Area (sq Km) | 45,691 | | Urban Households | 47,96,180 | | CNG Stations (No) | 485 | | Steel Pipeline Length (Km) | 701 | | PE Pipeline Length (Km) | 7,361 | | CNG Vehicles (No) | 12,18,088 | | PNG Household Connections | 29,44,999 | | Industrial Commercial Customers | 5,340 | | Geographical Areas | Mumbai GA 1, Thane GA2, Raigad GA3, Latur, Osmanabad, Ratnagiri, Davengere, Chitradurga |

Table 16: Mahanagar Gas Limited (MGL) - Volumes (MMSCMD) - Amalgamated Entity

| Segment | Q2 FY25 | Q1 FY26 | Q2 FY26 | FY 2024 | FY 2025 | | :-------- | :------ | :------ | :------ | :------ | :------ | | Total | 4.205 | 4.454 | 4.593 | 4.116 | 4.524 | | CNG | 3.038 | 3.185 | 3.255 | 2.984 | 3.220 | | Domestic | 0.637 | 0.698 | 0.757 | 0.593 | 0.727 | | I&C | 0.530 | 0.571 | 0.582 | 0.540 | 0.576 |

Table 17: Mahanagar Gas Limited (MGL) - Sales Volume Composition - Q2 FY 26

| Segment | % of Total Volume | | :---------- | :---------------- | | CNG | 69.87% | | DPNG | 13.31% | | Commercial | 3.35% | | Industrial | 13.47% |

Table 18: Mahanagar Gas Limited (MGL) - Dividend Per Share (Rs)

| Fiscal Year | Normal (Rs) | Special (Rs) | | :---------- | :---------- | :----------- | | FY 20 | 20 | 15 | | FY 21 | 23 | - | | FY 22 | 25 | - | | FY 23 | 26 | - | | FY 24 | 30 | - | | FY 25 | 30 | - |

Table 19: Fuel Price Comparison (INR) - Sep-25 / Oct-25

| Fuel Type | Sep-25 (Unit) | Oct-25 (Unit) | | :------------------ | :------------ | :------------ | | **CNG vs Alternatives** | | | | Petrol | 101.50 (Ltr) | 103.50 (Ltr) | | Diesel | 90.01 (Ltr) | 90.03 (Ltr) | | CNG | 46.56% of Petrol Price | 46.56% of Petrol Price | | **Commercial PNG vs Commercial LPG** | | | | Commercial LPG | 83.29 (kg) | 80.61 (kg) | | PNG | 56.75 (SCM) | 54.92 (SCM) | | **Domestic PNG vs Domestic LPG (Annual)** | | | | Domestic PNG | 10,618 | 10,725 | | Domestic LPG | 10,230 | 10,230 | | **Commercial PNG vs Commercial LPG (MMBTU)** | | | | Commercial PNG | 1,628 | 1,682 | | Commercial LPG | 1,809 | 1,870 |