Gujarat Gas Ltd (BOM:539336) Q4 2025 Earnings Call Highlights: Navigating Challenges with Strategic Growth Initiatives

Despite a dip in quarterly profits, Gujarat Gas Ltd (BOM:539336) focuses on CNG expansion and digital transformation to drive future growth.

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May 22, 2025
Summary
  • Revenue from Operations: INR 4,289 crore in Q4 FY25, compared to INR 4,294 crore in Q4 FY24.
  • EBITDA: INR 524 crore for Q4 FY25, down from INR 622 crore in Q4 FY24.
  • Profit After Tax (PAT): INR 287 crore in Q4 FY25, compared to INR 410 crore in Q4 FY24.
  • EBITDA Margin: 6.25% for Q4 FY25, compared to 7.06% in Q4 FY24.
  • Annual EBITDA: INR 2,090 crore for FY25, up from INR 1,984 crore in FY24.
  • Annual PAT: INR 1,146 crore for FY25, compared to INR 1,143 crore in FY24.
  • Dividend: INR 5.82 per share, totaling INR 400.64 crore.
  • Industrial Segment Sales Volume: 5.03 MMSCMD in Q4 FY25, down from 5.45 MMSCMD in the previous quarter.
  • CNG Sales Growth: 12% annual increase, with sales reaching 3.56 MMSCMD in Q4 FY25.
  • Investment in Gas Infrastructure: INR 193 crore in Q4 FY25, totaling INR 742 crore for the year.
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Release Date: May 21, 2025

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

  • Gujarat Gas Ltd (BOM:539336, Financial) reported a 12% annual increase in CNG sales, with a robust 28% growth outside Gujarat.
  • The company added 1,51,000 commissioned domestic customers in FY25, indicating strong growth in the domestic segment.
  • Gujarat Gas Ltd is aggressively expanding its CNG infrastructure, with plans to add approximately 70 new CNG stations in the next financial year.
  • The company has embarked on a major digital transformation initiative, enhancing operational efficiency and customer experience.
  • Gujarat Gas Ltd maintained a stable credit rating of AAA, reflecting strong financial health and stability.

Negative Points

  • The industrial segment saw a 7% decrease in sales volume, primarily due to customers in Morbi shifting to propane from natural gas.
  • The company's EBITDA margin decreased to 6.25% in Q4 FY25 from 7.06% in the previous year, indicating pressure on profitability.
  • Profit after tax declined to INR287 crore in Q4 FY25 from INR410 crore in the corresponding quarter of the previous year.
  • High spot RLNG prices during the winter months kept PNG prices higher compared to alternate fuels, impacting competitiveness.
  • The company faces uncertainty in the Morbi region due to fluctuating propane prices and competition from alternative fuels.

Q & A Highlights

Q: Can you provide a detailed sourcing mix on the overall volume for the quarter or the full year?
A: 25% of the gas came from APM sources, with 2.3 MMSCMD from APM. Long-term contracts contributed about 35% of the 9.38 MMSCMD, and short-term contracts, including IGX, HPHT gas, and spot gas, accounted for approximately 40%. - Rajesh Sivadasan, CFO

Q: What is the outlook on Gujarat Gas volumes in Morbi for FY '26, given the muted ceramic market?
A: Currently, we are doing close to 2.6 to 2.7 MMSCMD in Morbi. We don't see any major uptick in Morbi volumes right now due to stable spot and propane prices. - Rajesh Sivadasan, CFO

Q: How long do you anticipate the double-digit CNG volume growth to continue, and what is the volume growth guidance for CNG for FY '26?
A: We are maintaining a growth guidance of 12% for CNG, and we expect this growth momentum to continue in the current financial year. - Rajesh Sivadasan, CFO

Q: What is the current status and timeline for the scheme of arrangement involving the amalgamation of GSPC and GSPL with Gujarat Gas?
A: The scheme was approved by the Board in August and filed with the Ministry of Corporate Affairs in February. We expect the final approval by September or October 2025. - Sandeep Dave, General Manager

Q: With the softness in gas prices, is there any scope for cutting prices, and how do you see the EBITDA per SCM run rate for FY '26?
A: We are maintaining the same guidance due to variables like APM gas reduction and propane price uncertainty. - Rajesh Sivadasan, CFO

For the complete transcript of the earnings call, please refer to the full earnings call transcript.