Gujarat Gas Limited Q2 FY26 Concall Decoded: Volumes stuck in Morbi, margins guided lower, propane suddenly everyone’s best friend

1. Opening Hook

While the street was busy celebrating clean energy narratives, Gujarat Gas quietly reminded everyone that ceramics in Morbi don’t run on ESG PowerPoints. Q2 FY26 came with stable revenues, softer margins, and a management tone that screamed realism rather than romance.

Volumes slipped, EBITDA dipped, and propane walked into the conversation like an uninvited guest who refuses to leave. Add a complex group merger, LNG geopolitics, and a ceramic cluster that switches fuels faster than analysts switch estimates—and you get a quarter that looks boring on the surface but messy underneath.

Management stayed calm, margin guidance stayed conservative, and optimism was strictly postponed to FY27. If you were hoping for a heroic comeback story—wait. If you want to understand why gas utilities are now selling propane to protect relevance, read on. Things get spicier after Morbi.

2. At a Glance

Revenue ₹3,979 cr – Flat growth, no fireworks, just survival mode.
EBITDA ₹520 cr – Down YoY; margins blinked first.
PAT ₹281 cr – Lower than last year, despite scale.
EBITDA/SCM ₹6.54 – Slipping now, guided even lower ahead.
Morbi volume ~2 MMSCMD – Baseline achieved, growth on vacation.
CNG volumes +13% YoY – Saving grace quietly doing heavy lifting.
Capex ₹800 cr FY26 – Pipes over profits, again.

3. Management’s Key Commentary

“Morbi volumes were expected to be lower due to Janmashtami.”
(Translation: Festivals now move industrial gas demand.) 😏

“Non-Morbi volumes have grown 15% over two years.”
(Translation: Outside Morbi, life exists.)

“Propane is currently cheaper than natural gas.”
(Translation: Our biggest competitor is no longer electricity.)

“We are entering propane distribution.”
(Translation: If you can’t beat them, sell it too.) 🔥

“EBITDA margin guidance is ₹4.5–5.5 per SCM.”
(Translation: Don’t anchor to Q1, that was a tease.)

“Morbi baseline volume is 1.7–1.8 MMSCMD.”
(Translation: This is the floor, not the growth story.)

“FY27 pricing improves when LNG supply kicks in.”
(Translation: Hope lives in Qatar and the US.) 🌍

4. Numbers Decoded

Source table

Metric	Q2 FY26	Commentary
Revenue	₹3,979 cr	Flat despite infra expansion
EBITDA	₹520 cr	Down YoY, margin pressure visible
PAT	₹281 cr	Volume > pricing pain
EBITDA/SCM	₹6.54	Slipping towards guided range
Morbi Volume	~2.0 MMSCMD	Baseline holding
Run-rate Morbi	1.7–1.8	No collapse, no recovery
Capex H1	₹282 cr	Aggressive pipe-laying

Decoded: Gujarat Gas is defending volumes, not expanding margins.

5. Analyst Questions

Will Morbi recover in Q3/Q4?
Management: Winter helps propane, not gas.
(Translation: Don’t

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