Gujarat Gas (GUJGA IN) – Q4FY26 Result Update – Transition to an Integrated Energy Co. – Downgrade to ‘HOLD’
Published on 02 Jun 2026
Current Q1FY27 run-rate volumes are at ~14mmscmd gross and ~5.5mmscmd net. Company targets 25-30% volume growth by FY31. Management maintained CGD EBITDA/scm guidance of INR5.5-6.5/scm and expects volume growth to be driven by Morbi's recovery and continued PNG adoption. We revise our CGD volume assumptions to 11.5/10.3mmscmd (earlier: 9.1/9.6mmscmd) for FY27E/FY28E, driven by higher Morbi volumes as customers switch to PNG amid disruptions in the West Asia region. We expect EBITDA/scm of INR5.2/5.8 (earlier: INR5.9/6.0), in line with management guidance. The sustainability of Morbi-led volume growth and execution of the newly integrated businesses remain key monitorable. Accordingly, we revise the rating to “Hold” from “Accumulate”. We value the company on an SOTP basis, assigning 13x EV/EBITDA to CGD business and 5x to Gas Trading/E&P/Power business, arriving at a target price of INR380 (earlier: INR342).
