Gujarat Gas Limited: Comprehensive Stock Analysis Report | Scrolls
- Editor
- Sep 4
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by KarNivesh | 04 September, 2025
Gujarat Gas Limited (GUJGASLTD.NS) is India’s largest City Gas Distribution (CGD) company by sales volume, operating across 44 districts in six states. With a market capitalization of ₹30,448 crores and a current share price of ₹442.55, the company has faced challenges in recent years. In 2024–25, the stock declined 27.3% year-on-year, but strong fundamentals and upcoming strategic changes keep it in investor focus.
Company Overview and Strategic Restructuring
Gujarat Gas has built a vast network of over 43,300 km of pipelines and operates more than 825 CNG stations. It serves 22.27 lakh households, along with a large base of industrial and commercial customers. Beyond Gujarat, its operations extend into Maharashtra, Rajasthan, Haryana, Punjab, Madhya Pradesh, and the Union Territory of Dadra & Nagar Haveli.
The most significant development is the merger and demerger plan involving Gujarat State Petroleum Corporation (GSPC) and Gujarat State Petronet Limited (GSPL). Expected to conclude by August 2025, this restructuring will unlock tax benefits worth ₹7,200 crores and create operational synergies.
Financial Performance
The company’s revenue peaked at ₹16,759 crores in FY2023 before slipping to ₹15,690 crores in FY2024—a decline of 6.4%. Profitability has been under pressure, with net profit falling from ₹1,528 crores in FY2023 to ₹1,144 crores in FY2024, a 25.1% drop. EPS declined from ₹22.20 to ₹16.61 during the same period.
On the balance sheet side, Gujarat Gas has displayed financial discipline. Total debt dropped from ₹629 crores in FY2022 to ₹150 crores in FY2024, making it virtually debt-free. Cash and cash equivalents grew sharply to ₹926 crores, ensuring liquidity for growth and dividends.
Valuation and Shareholding
At a P/E ratio of 26.6x, Gujarat Gas trades at a premium compared to peers such as Petronet LNG (11.2x) and Mahanagar Gas (11.7x). Its book value per share rose to ₹112.1 in FY2024, while dividend yield stands at a modest 1.32%. Promoters hold a stable 60.89% stake, supported by institutional investors including mutual funds (7.74%) and insurance companies (7.06%).
Industry Position and Growth Drivers
Despite valuation concerns, Gujarat Gas enjoys strong market leadership. It holds the highest sales volumes in the CGD sector and continues expanding through its FDODO model for CNG stations. The industrial PNG segment contributes about 60% of revenue, while CNG, domestic PNG, and commercial PNG make up the rest.
Growth drivers include infrastructure expansion, government policies promoting natural gas adoption, and expected synergies from the merger. The company also benefits from its scale and established customer base, providing a competitive edge against rivals like Adani Total Gas, Indraprastha Gas, and Mahanagar Gas.
Risks and Outlook
Key risks include regulatory uncertainties from PNGRB notifications, input cost volatility in LNG prices, and heavy reliance on industrial customers for revenue. Still, Gujarat Gas’s debt-free status, strong cash reserves, and promoter backing provide resilience.
Analysts set a 12-month target price of ₹520–550, suggesting a potential upside of 17–24%. For conservative investors seeking steady dividends and moderate growth, Gujarat Gas remains a reliable long-term play in India’s energy transition story.
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