Earnings Outlook
Gujarat Gas Q2 PAT seen down on weak demand, lower EBITDA
This story was originally published at 19:20 IST on 6 November 2025
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By Taniva Singha Roy
MUMBAI – Gujarat Gas Ltd. is likely to report a fall in its net profit for the September quarter due to subdued industrial demand and lower margins, according to brokerages tracking the company.
The company's standalone net profit for the quarter is expected to fall over 7% on year to INR 2.85 billion, according to the average of estimates from 10 brokerages. Estimates for net profit are in the range of INR 2.44 billion to INR 3.29 billion. Motilal Financial Services Ltd. provided the lowest estimate for net profit, while the highest was by Nuvama Wealth Management Ltd.
The Jul-Sept net sales of Gujarat Gas are seen at INR 37.33 billion, down 1.3% on year and nearly 4% on quarter. Estimates for the company's net sales are in the range of INR 34.00 billion to INR 39.80 billion. HDFC Securities Ltd. provided the lowest estimate for net profit, while the highest was by Nomura Equity Research Ltd.
For the June quarter, Gujarat Gas had reported a near 1% on-year fall in net profit to INR 3.27 billion. The company's revenue from operations for the June quarter had fallen 13% to INR 38.71 billion.
Analysts expect the company's volume to decline due to weakness in ceramic exports, which is likely to impact the company's bottom line. Motilal Oswal Financial Services Ltd. expects volumes to come in at 8.6 million metric standard cubic metres per day, down 1% on year and 2% sequentially, due to weak exports.
The Morbi region is the single largest and prime industrial consumer of natural gas supplied by Gujarat Gas. The ceramic manufacturing cluster in Morbi and Surendranagar districts accounts for majority of the gas company's industrial sales volume, and has been a key driver of the company's overall gas sales.
"We expect volumes to fall 1% on year as healthy growth in CNG (compressed natural gas) is offset by lower PNG (piped natural gas) industrial volumes due to overall decline in activity in the Morbi industrial cluster and sustained premium of PNG price to landed cost of propane during Q2," Nuvama said.
YES Securities Ltd. also expects a decline in volumes --by 2.8% on year and 4.2% on quarter to 8.5 million metric standard cubic metre per day -- led by weaker demand from the Morbi region.
Most of the brokerages see the company's earnings before interest, taxes, depreciation, and amortisation falling nearly 14% on year to around INR 4.78 billion. However, Prabhudas Lilladher anticipates strong EBITDA growth for the gas segment on a low base and improved refining margins, while Systematix Shares and Stocks (India) Ltd. expects the broader gas sector to post a decline of 12.7% on year in EBITDA due to lower volumes and shrinking margins.
Gujarat Gas will detail its September quarter results on Friday. Its shares have fallen nearly 7% since it released its Apr-Jun earnings. On Thursday, shares of the company closed 1.5% lower at INR 400.95 on the National Stock Exchange. Of the 14 brokerage reports on the company available with Informist, five have a 'buy' rating on the stock with an average target price of INR 560 while four have a 'hold' rating and five have a 'sell' rating with average target price of INR 427.
Brokerages believe Gujarat Gas's near-term growth will depend on the company's ability to push industrial gas usage in new areas such as rural Thane, rural Ahmedabad, and parts of Rajasthan, even as a recovery in Morbi remains critical for a sustainable volume uptick.
Following are the standalone September quarter earnings estimates for Gujarat Gas from 10 brokerages in descending order of the estimate of net profit in INR million:
Brokerage | Net sales | Net profit | EBITDA |
Nuvama Wealth Management Ltd | 37,810 | 3,288 | 5,401 |
YES Securities (India) Ltd | 36,902 | 3,241 | 5,161 |
Emkay Global Financial Services Ltd | 38,945 | 3,021 | 4,853 |
Systematix Shares and Stocks (India) Ltd | 37,835 | 2,973 | 5,003 |
HDFC Securities Ltd | 34,000 | 3,000 | 5,000 |
Nomura Equity Research | 39,800 | 2,800 | 4,600 |
Prabhudas Lilladher Pvt Ltd | 35,900 | 2,600 | 4,700 |
JM Financial Institutional Securities Pvt Ltd | 36,406 | 2,599 | 4,322 |
ICICI Securities Ltd | 38,600 | 2,500 | 4,300 |
Motilal Oswal Financial Services Ltd | 37,143 | 2,442 | 4,412 |
AVERAGE | 37,334.10 | 2,846.40 | 4,775.20 |
End
Edited by Ashish Shirke
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