Don't see the advent of EVs impacting CNG market at least for 10 years: IGL

The government has set a 2030 target to transition the country entirely to electric vehicles but is there a threat to the long-term growth of domestic gas distribution companies is the big question.

ES Ranganathan, MD, IGL is not worried and say the onset of electric vehicles is a threat to the overall automobile market and may first impact the petrol and diesel market segment than the CNG vehicles which are more environment friendly.

In ten years the population of CNG vehicles will be so many that till they phase out completely it would be another 5 years and so as of now he does not see a dent to the CNG market for the next ten years.

He is also confident of posting double-digit volume growth of around 12 percent for the next two years. The company has done around 11-11.5 percent consistently in the last 18 months. However, with regards to EBITDA they would like to keep it around 5.5 to 5.74 percent in an aim to keep it economically attractive to consumers.

He also clarified that theirs is a cost neutral company and so whenever there is an increase or decrease in costs be it gas costs, taxes, manpower wages etc is passed on to the consumers.

The government has plans to come out with bids for at least 60 cities and so the company would be aggressively bidding for North and Central India, as well as in Maharashtra, said Ranganathan.

Going forward in October he expects a marginal increase in gas cost.