Mahanagar Gas Ltd (MGL) which surged 7 percent on Tuesday owing to a strong fourth quarter results on surprising EBITDA, is witnessing selling pressure in trade on Wednesday at 10:30 am with stock down by about 1 percent.

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Ashu Shinghal, MGL in its interaction with CNBC-TV18 on Wednesday said the company witnessed lower CNG volume growth from higher gas prices. "Volumes declined in H2FY23 due to high CNG prices". The company had cut CNG prices by nearly Rs 10/ kg n the last 4 months, but is expecting an uptick in volumes in FY24. "Winters in Europe are nearly over and hence demand shall be lower in upcoming months". MGL expects to clock 7-8 percent volume growth in FY24.

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LNG prices have fallen sharply in last 4 months, below $10/mmBtu and are likely to continue being on similar levels for remaining part of the year.

In fourth quarter, margins were at seven quarter high led by price hikes and for FY24 it is expected at Rs 8-10/scm. Furthermore, MGL is looking at multiple growth opportunities along with acquisitions. This includes participation in the electric vehicle value chain and expansion of its CGD business.

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In FY23, conversion to CNG vehicles was low in start of this year. Also, at 13,700 a quarter, CNG conversions have declined in the two previous quarters and closed FY23 at 65,000 vehicles. For FY24, it expects 70,000 vehicles.

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