City gas distribution companies – Indraprastha Gas and Mahanagar Gas– might have seen flat to marginal volume growth sequentially in the June quarter, and a fall in earnings on year.

As per Elara Capital, IGL and MGL’s EBITDA (earnings before interest, taxes, depreciation, and amortization) is set to decline 16% and 31% on year, respectively, led by a 26-38% decline in EBITDA per scm margin partly offset by 7-11% volume growth.

“Gross margin should decline sequentially for IGL as well. However, with normalization in opex (operational expenses) which was elevated in 4QFY24, unit EBITDA would likely be flat sequentially at Rs 6.6/scm against Rs 8.6/scm in the corresponding quarter last year,” said Kotak Institutional Equities.

According to analysts at Kotak Institutional Equities, “For MGL, due to low base (2.3% on year decline in 1QFY24), CNG volume will look optically strong.” It expects MGL’s unit EBITDA to decline further to Rs 10.5 per standard cubic meter (scm) from Rs11.5/scm in the previous quarter.

Gujarat Gas – the leading CGD company in Gujarat, however, might see a 51% EBITDA growth on year based on 13% growth in volume, according to Elara Capital. It also expects a 33% EBITDA/scm margin growth to Rs 6.1/scm for the company.

“Gujarat Gas will benefit from likely LNG surplus and propane demand surge globally from early 2025, which will make gas economics favorable,” Elara Capital said.

The country’s gas utilities are expected to register a strong first quarter in the current financial year on the back of healthy gas transmission volumes, according to analysts.

State-owned largest natural gas company, GAIL is expected to register a 6% increase on quarter in its EBITDA due to higher marketing earnings and higher transmission volumes, as per Kotak Institutional Equities.

“We expect qoq EBIT improvement in transmission and marketing, while Petchem and LPG (liquified petroleum gas) would be impacted by shutdowns in the first quarter,” the firm said.

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Elara Capital expects a jump of 40% on year in GAIL’s EBITDA, and an increase of 7% on year in its gas transmission volumes in the quarter under review. The brokerage expects normalization of petchem operations.

Petronet LNG is also expected to post an EBITDA growth of 5% from last year on 3% growth in LNG import volume and 5% increase in regasification tariff hike.

Sequentially, Kotak Institutional Equities expect adjusted EBITDA of Petronet LNG to rise 20% and 17% on year due to 7% higher volume growth and 5% tariff increase at Kochi.

Gujarat State Petronet’s EBITDA may decline by 19% from the previous quarter as part impact of 47% tariff cut would be offset by higher transmission volume which is expected to rise 11% sequentially.