Initial reaction to Q4 results - a mixed bag, but more negative than positive given they had guided for better numbers in the Q3 earnings commentary. Volumes were up, but lower than expected. PNG growth (both domestic and industrial/commercial) has been quite good QoQ, and domestic growth has been particularly strong YoY. CNG growth is steady - the good thing is they are still growing here despite the headwinds around EV adoption.
However, clear margin pressures seen across both CNG and PNG. EBITDA margin down 1.2% QoQ and EBITDA per SCM was only Rs. 6.58, much lower than the Rs. 7.5 they are targeting for FY25. Given CNG prices were cut in March, chances are it will fall further in Q1 FY25. Haven’t listened to the earnings call yet - wonder what was the reason for this fall in Q4.
While valuations are ok, some more caution warranted here, I guess. Not clear to me what is the growth trigger even if margins bottom out in Q1.
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