Gujarat Gas ↗

GGL is the leading player in CGD business in India and has a dominant market position, particularly in Gujarat, which is the largest natural gas-consuming state in the country. This is considering its first -mover advantage in major areas, continuous infras tructure development and high level of entry barriers, primarily in the form of capex requirement and regulated near -monopoly marketing and infrastructure exclusivity for a given period. Petroleum and Natural Gas Regulatory Board (PNGRB) has

GGL has demonstrated strong operating performance in terms of growth in CGD infrastructure and sales volumes. The number of GGL’s CNG stations remained stable at 830 as on June 30, 2025 (828 as on March 31, 2025 and 808 as on March 31, 2024), while the number of PNG customers increased to 23.02 lakh as on June 30, 2025 (22.67 lakh as on March 31, 2025 and 21.16 lakh as on March 31, 2024). GGL’s total sales volumes grew by ~3% from 3,421 million metric standard cubic metre (MMSCM) in

GGL’s customer mix is skewed towards piped natural gas (PNG). In FY25, of the total sales volumes of GGL, the proportion of PNG was 68% (Industrial – 86%, Commercial – 2% and Domestic – 12%) followed by CNG at 32%. In Q1FY26, the proportion 2 CARE Ratings Ltd. Press Release of PNG was 62% (Industrial – 85%, Commercial – 3% and Domestic – 12%) followed by CNG at 38%. GGL introduced Full Dealer-owned Dealer Operated (FDODO) scheme, under which dealers will invest and operate CNG Stations with ~60-

The company continues to be debt free as on March 31, 2025, with debt comprising only lease liabilities of ₹150 crore as on March 31, 2025. The merger of GSPC with GGL is not expected to result in addition of debt/other liabilities , which may adversely impact GGL’s financial profile. Deviation from this on consummation of the scheme would be a key rating sensitivity. Stable industry outlook To address environmental concerns, Government of India (GoI) has been actively promoting a shift toward c

To address environmental concerns, Government of India (GoI) has been actively promoting a shift toward cleaner energy sources, including natural gas. CGD projects have become an important segment in the natural gas business in India, given the increasing impetus coming in the form of environmental concerns over certain polluting fuels and court directives. In the last many years, CGD volumes have been continuously rising, considering improved pipeline infrastructure, better availability of n at

The CGD companies have to rely on imported RLNG and other domestic gas sources for meeting the requirement of PNG-Industrial and PNG-Commercial segments and shortfall in CNG. Currently, this domestic allocation is relatively cheaper compared to alternative natural gas sources such as RLNG. In FY25, the Government announced APM allocation cut which resulted in dependence on costlier RLNG/HPHT gas. Considering this, gas sourced under APM has reduced from 30% in FY24 to 25% in FY25

CGD entities are regulated by PNGRB with risk associated with entry of new players post expiry of the marketing/network exclusivity period, which may impact profitability of players. The segment is vulnerable to demand-supply of natural gas and changes in the pricing mechanism. GGL’s operating margins, such as other CGD companies, are vulnerable to the mix of APM gas and costlier imported RLNG used in its product mix. Unexpected change in regulations regarding priority in allocation of APM gas