Gujarat Gas share gains 7% after rising propane prices

Synopsis: Rising propane prices to $525/ton boost Gujarat Gas, whose shares gained 7% in today’s market. Narrower gas-propane price gap improves competitiveness and profitability, while Morbi gas prices were reduced by Rs. 3/scm, benefiting customers.

This company is in business of natural gas involves distribution of gas from sources of supply to centres of demand and to end customers is now in the spotlight after Propane prices have gone up to $525 per ton.

With a market capitalisation of Rs. 28,726 cr, the shares of Gujarat Gas Ltd are currently trading at Rs. 417 per share, increasing 7% in today’s market session, making a high of Rs. 419, from its previous close of Rs. 391.40 per share.

Propane Prices Increase

Propane prices have gone up from $495 per ton to $525 per ton. This increase raises the cost of propane when it is imported and delivered in India. As a result, domestic propane prices are expected to rise by around Rs 2 per standard cubic meter (scm) starting January 1.

Meanwhile, lower spot and contract LNG prices have allowed Gujarat Gas to reduce its Morbi gas prices by Rs 3 per scm. The difference between natural gas prices and propane prices has significantly narrowed, dropping from more than Rs 6 per scm to less than Rs 1 per scm.

The higher propane prices, combined with the smaller price gap between gas and propane, benefit Gujarat Gas. A smaller gap makes their gas offerings more competitive and potentially improves profitability, as customers are less likely to switch to propane, which has become relatively more expensive.

About the company 

Gujarat Gas Ltd is one of India’s leading natural gas distribution companies. It supplies piped natural gas (PNG) to homes and compressed natural gas (CNG) for vehicles, mainly in Gujarat and other states. The company also distributes industrial and commercial gas, playing a key role in providing cleaner and efficient energy solutions across its network.

Sales remained almost flat year-on-year at Rs. 3,780 Cr, in Q2FY26. EBIDT fell 13% to Rs. 447 Cr from Rs. 514 Cr, while net profit declined 9% to Rs. 280 Cr versus Rs. 309 Cr in the same period last year. Earnings per share also dropped 9% to Rs. 4.06 from Rs. 4.48. The company demonstrates strong financial health with a ROCE of 19.5%, ROE of 14.2%, a low debt-to-equity ratio of 0.02, and a consistent dividend payout of 33%.

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