Gujarat Energy (GUJENERG IN) – Q1FY27 Result Update – Ease in propane supply to drag Morbi volumes lower – HOLD
Published on 13 Aug 2026
GEL reported a beat on EBITDA at INR13.0bn, largely driven by strong performance from its Trading business. EBITDA from the CGD business stood at INR5.8bn, up 25.2/7.0% QoQ/YoY. Total CGD volumes grew 39.1% QoQ/YoY to 12.3mmscmd in Q1FY27, driven by strong PNG-I/C volumes and growth in CNG volumes, partly offset by muted PNG-D volumes. Management indicated that higher propane availability, following diversification of supply sources beyond the Middle East, has impacted Morbi volumes, which are currently trending at ~3mmscmd, down from the ~8mmscmd run-rate witnessed in May-June’26. Consequently, we lower our volume estimates to 10.4/9.9mmscmd from 12.1/10.7mmscmd for FY27/FY28E. Management maintained its CGD EBITDA/scm guidance of INR5.5-6.5/scm; we estimate EBITDA/scm at INR5.3/5.7/scm for FY27/FY28E. GEL maintained its INR11-12bn EBIT guidance for the Trading business, with margins of 4-5%; we have factored in our estimates accordingly. We value the company on SOTP basis, assigning 10x EV/EBITDA to the CGD business and 4x to Gas Trading/E&P/Power, arriving at a target price of INR275 (earlier: INR293). Maintain “Hold”.
