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Leading city gas distributor is on its journey to improve profitability and enhance capital productivity.
India has a high potential of gas demand and is likely to become one of the largest consumers of natural gas globally in the coming years. The share of natural gas in the primary energy mix could reach 20% by 2030.
One of India’s leading consumer gas distribution companies has grown rapidly year-on-year to become one of the market leaders in the space. In the backdrop of the Indian government trying to increase access to gas to about 70% of the population by 2025, the company wanted to further strengthen its business functions to become future-ready. In order to take up the massive growth in the offing, they were cognizant of the need to build up the organizational capability and modernize key aspects of the business in order to ensure sustained growth.
EY worked with the company to improve its overall profitability and optimize capital costs. We helped them drive their future growth and expansion vision through transformation of their key business functions.
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Read moreEY conducted a detailed diagnostic to crystalize the organization’s capabilities and define next steps to simplify and optimize operational processes.
The initiatives identified across the board included revenue / pricing and cost optimization across operations and maintenance, procurement, logistics, inventory and taxes. Besides these, EY identified initiatives to enhance capital productivity (project NPV) and optimize capital cost.
An assessment of the outcomes of the ongoing project reveals that the CGD company has started to realize multiple benefits of the transformation, both in terms of lowering capital costs and in terms of increasing operational efficiency. EY has identified initiatives for capital productivity enhancement by up to 30% in some geographies, capex optimization in key categories and initiatives for profitability improvement in the range of 5 to 10% of spend value for the respective items. The implementation of these initiatives is currently underway.
EY’s multi-functional capabilities enable it to serve organizations with the right methods, skill sets, and technologies to improve revenue and profitability.
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