IGL expects to grow in double-digits in next two quarters

Profit of Indraprastha Gas during July-September quarter grew by 42 percent year-on-year to Rs 144.2 crore, driven by operational performance and other income.In conversation with CNBC-TV18, ES Ranganathan, MD of the company, said the company expects to grow in double-digits at around 10 percent for the next two quarters of this fiscal year. He said the company volumes have grown by 11 percent over the last year. CNG volumes have grown by 13 percent.He expects the price of domestic gas to come down.Company is also looking at expanding the operations in Rewadi.Below is the verbatim transcript of ES Ranganathan's interview to Sumaira Abidi on CNBC-TV18.Q: Can you take us through the volume as well as the value growth this quarter?A: Volumes has grown by 11 percent over the last year, 235 million kilogram and the CNG volumes have grown 13 percent. As per the value is concerned, it has been more or less stable and we have touched the sales value of around Rs 1,067 crore plus profit after tax (PAT) is Rs 144.27 crore and may have declared an interim dividend of 35 percent to the shareholders.Q: Your volumes have grown by about 11 percent in the last year. For the last two quarters as well, you have been reporting double digit volume growth, so what is the kind of trends that you see for the second half of this fiscal?A: We expect the growth to be in double digit around 10 percent for the next two quarters also and we will be ending the year with the double digit growth.Q: there was a bit of underperformance you can see on unit EBITDA at about Rs 5.7 per scm, which sequentially has done about 12 percent because of the higher expenses. Is there improvement that we can expect on this front?A: It has been slightly more than what is somewhat abnormal in Q1. Now, we have touched the figure of 5.8 and we expect to close the year at a rate of Rs 5.5 per scm.Q: So there is no chance that means of seeing a figure that is closer to Rs 6 per scm?A: It will not increase now.Q: There was also a provisional expense this time around. Can we expect any more such expenses in the next few quarters?A: Delhi Development Authority (DDA) has arbitrarily increased the lease rent for our CNG stations so we have represented to them to review the increase and then we decided to have a provision for this year. So it will be same only going forward.Q: Apart from Delhi, which are the other areas that the company is looking to expand even exploring?A: We are embarking on an aggressive programme in Rewadi, which has been allocated to us by Petroleum and Natural Gas Regulatory Board (PNGRB). That is why going to new area, we will have to depend on the bidding of PNGRB and participate in all the cities in and around Delhi, we will be aggressively bidding for them.Q: Operationally this time around there is a bit of a concern, EBITDA margins have cooled now to about 23 percent, can we now assume that margins of 25 percent odd would be the new normal?A: If you look at per scm, it will be the same.Q: What about margins then? Is 25 percent now the new normal for your company?A: This may come down going forward in Q3 and Q4 because of the cost pressures and lower volumes because Q3 and Q4 are normally more subdued than Q1 and Q2.Q: You had also cut the selling price of CNG because of cartin input gas, what are the trends that we can see going ahead?A: Whatever we got from the government by reducing in the domestic gas price, we have passed it on to the customers.Q: Do you see more price cuts going ahead?A: Yes, for the next two half yearly reviews, we are expecting the price of the domestic gas may come down.