Detailed Narrative
Scheme of Arrangement and Name Change
The company successfully completed its scheme of arrangement, with the final order received on April 17, 2026, and effectiveness from May 1, 2026. This involved the merger of GSPC, GSPL, and GSPC Energy into Gujarat Gas, followed by the demerger of the gas transmission business into GTL. Subsequently, Gujarat Gas Limited was renamed Gujarat Energy Limited on May 14, 2026, reflecting its new integrated energy identity. The appointed date for the merger was April 1, 2024, and for the demerger, April 1, 2025, which means FY25-26 financials are not directly comparable to restated FY24-25 figures.
Gas Trading Segment Performance and Sourcing Strategy
The Gas Trading segment delivered strong profitability, with EBT increasing to INR 1,334.61 crores in FY26 from INR 1,222 crores in FY25, despite a 19% decline in volume to 10.2 mmscmd (net 4.9 mmscmd) from 12.6 mmscmd. The company has secured long-term LNG supplies totaling 2.96 MTPA (10.66 mmscmd) and recently signed two new SPAs for up to 1.36 MTPA (4.9 mmscmd). The sourcing mix includes APM (2 mmscmd), New Well Gas (0.4-0.5 mmscmd), and long-term/short-term contracts (each 3.5 mmscmd), with a majority being Brent-linked. Management expects 25-30% growth in this segment by 2030-31.
City Gas Distribution (CGD) Growth and Segmental Performance
The CGD segment showed healthy growth, with Q4 FY26 CNG sales volume reaching a record 3.6 mmscmd, a 12% YoY increase. The CNG network expanded to 839 stations, and the vehicle base grew 15% to 17.68 lakh. The PNG Domestic segment added 43,000 new customers in Q4 FY26, bringing the cumulative base to 24.18 lakh. Efforts to convert LPG users to PNG resulted in 86 residential societies (13,000 households) becoming LPG-free. The CGD segment's EBITDA per SCM for FY26 was INR 6.16, with a margin guidance of INR 5.5 to INR 6.5 per SCM.
Morbi Ceramic Cluster Recovery and Industrial Segment
The Morbi ceramic cluster, a key industrial segment, saw a significant recovery, with units off-taking gas increasing from 83 (1.66 mmscmd) in March 2026 to 710 (~8 mmscmd) by May 2026. The average Morbi volume in Q4 FY26 was 2.02 mmscmd, growing 21% QoQ. The current pricing in Morbi is around INR 75 per SCM, while non-Morbi industrial areas are at INR 68 per SCM. The company anticipates Morbi volumes could reach 8.8-8.9 mmscmd in the near term. PNG Industrial sales volume in Q4 FY26 was 4.19 mmscmd, a 7% QoQ increase from Q3 FY26, despite a YoY decline.
Financial Performance and Capital Allocation
The company reported a strong Q4 FY26 EBITDA of INR 943 crores (up 19.37% YoY) and a full-year FY26 EBITDA of INR 3,772 crores (up 16.38% YoY). FY26 PAT was INR 2,299 crores, a slight decline from INR 2,308 crores in FY25. The Board recommended a dividend of INR 8.90 per share, totaling INR 835 crores. Capex guidance for CGD is INR 1,000 crores and for E&P is INR 100 crores. The company holds approximately INR 6,800 crores in cash and other financial assets, and has a remaining deferred tax asset of INR 1,900 crores from initial merger-related tax losses.
Strategic Initiatives and Digital Transformation
Gujarat Energy has embarked on a digital transformation journey, including ERP expansion, AI-enabled analytics, advanced metering infrastructure, and SCADA implementation. To drive future growth, McKinsey has been engaged as a strategic consultant to evaluate organic and inorganic expansion opportunities, aiming to accelerate core business growth and build a future-ready portfolio. The company also signed 24 new agreements for compressed biogas purchase, contributing to its ESG commitments and reducing CO2 emissions.