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Beat driven by higher-than-estimated EBITDA/scm margin

* GUJGA’s adj. EBITDA margin was above our est. at INR5.4/scm (our est. INR5/scm). Volumes came in line at 9.3mmscmd (our est. 9.25mmscmd). While GUJGA’s realization improved ~INR1.3/scm QoQ, gas costs decreased INR0.4/scm QoQ and opex increased 0.8/scm QoQ, leading to ~INR1/scm QoQ increase in EBITDA/scm margin. Resultant EBITDA came in 8% above our est. at INR4.5b. Due to higher-than-estimated other income, PAT was 24% above our est. at INR2.9b.

* We note that spot LNG prices were elevated, averaging USD14/mmbtu in 4Q (similar QoQ). However, spot LNG prices have corrected in 1QFY26’td, with current prices at ~USD11.5/mmbtu.

* Recently, GUJGA’s domestic gas allocations had been reduced by ~20%, effective from 16 Apr’25. This adjustment decreases their share of domestic gas in the CNG segment from 51% to 41%. However, the recent APM reduction has been compensated by a 20% costlier New Well Gas.

* Total volumes were in line with our estimate at 9.3mmscmd (our est.: 9.25mmscmd) (-4% YoY).

* While I/C-PNG volumes were marginally below estimates, D-PNG volumes came in 16% above estimates.

* EBITDA/scm came in 8% above our est. at INR5.4.

* Realization increased ~INR1.3/scm QoQ, gas cost decreased by INR0.4/scm QoQ, and opex increased by 0.8 per scm QoQ, leading to ~INR1/scm QoQ increase in EBITDA/scm margin.

* Resulting EBITDA stood 8% above our estimate at INR4.5b (-24% YoY).

* GUJGA’s PAT came in 24% above our est. at INR2.9b (-9% YoY), driven by higher-than-estimated other income.

* In FY25, GUJGA’s net sales/EBITDA/APAT stood flat YoY at INR165b/ INR18.8b/INR11.5b.

* The Board recommended a final dividend of INR5.82/sh (FV: INR2/sh).

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