The Gujarat Gas share rallied 7% to an intra-day high of Rs 423.90 on the NSE after the company reported its quarterly results for the fourth quarter of FY26. The stock surged after brokerage firms upgraded the stock on the back of the amalgamation benefit and the non-availability of propane in Morbi.

Jefferies on Gujarat Gas

The international brokerage house, Jefferies, upgraded to a ‘Hold’ rating from ‘Underperform’. The brokerage also raised the price target to Rs 415 from Rs 280, implying an upside of over 4%. 

According to the report, Gujarat Gas is benefiting from the non-availability of propane in Morbi, leading to market share gain and margin expansion. “We introduce the gas trading business in our model with the amalgamation effective. We have raised CGD EBITDA by 45% for FY27 on the back of strong Morbi volumes,” added Jefferies in its report.

The company has been able to source adequate LNG to cater to this demand spike. The company expects the current strength to sustain till the conflict is resolved.

“We have upgraded FY27 CGD EBITDA by 45%, as we see the favourable conditions sustaining till shipping remains disrupted in the Strait of Hormuz,” it added.

Nomura on Gujarat Gas

Nomura raised the price target for Gujarat Gas to Rs 511 from Rs 390, while retaining a ‘Buy’ rating. This translates to an upside potential of 20% from the current market price.

Near-term earnings are expected to be driven by a robust recovery in industrial volumes in the key Morbi cluster (reaching 8 million metric standard cubic metres per day by May 2026), primarily due to the non-availability of propane.

Margins for the City Gas Distribution (CGD) entity are expected to increase because the amalgamation allows for the consolidation of trading margins that were previously accrued by the unlisted Gujarat State Petroleum Corporation (GSPC).

The strategic amalgamation simplifies the group structure by eliminating cross-holdings and removing the valuation discount previously associated with the company’s conglomerate structure.

Gujarat Gas has secured new long-term LNG contracts (including a 2026–2043 deal with Qatar) that improve its ability to compete against alternative fuels like propane, especially in industrial segments.

“GGL has also signed new long-term LNG contracts that we believe will help it compete better against propane, especially in the key Morbi region. Tax loss asset of Rs 1,900 crore at FY26 end will likely be used to offset part of the tax liabilities in FY27,” said Nomura. 

Gujarat Gas’ share price performance

The share price of Gujarat Gas has given a return of 12.6% in the past five trading sessions. The stock has risen 7.3% in the past one month and 4% in the last six months. However, Gujarat Gas’ stock price has fallen 10% over the previous 12 months. 

Gujarat Gas Q4FY26

Gujarat Gas’ total CGD volumes stood at 8.9 mmscmd, which came in higher than expectations, although 5% lower year-on-year in Q4FY26. Total volumes were led by the industrial and commercial (I&C) segment, where PNG volumes stood at 4.4 mmscmd. 

Compressed natural gas (CNG) volumes were also more than expected and grew 12% YoY.

Gujarat Gas’ standalone revenue declined 10% YoY in the fourth quarter of FY26. Earnings before interest, tax, depreciation and amortisation (EBITDA), however, rose 34% YoY to Rs 780 crore, although it declined 18% sequentially.

Disclaimer: This article provides factual analysis only and is not, and should not be construed as, an offer, solicitation, or recommendation to buy or sell securities. Investors must conduct their own independent due diligence and seek advice from a SEBI-registered financial advisor.