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.