Propane price advantage may persist
Propane is currently ₹4-6/scm cheaper than natural gas, and management expects this gap to widen in winter, further pressuring industrial volumes.
GUJGASLTD / bear-case history
Track the concerns that keep returning.
Gujarat Gas · risk themes across the available quarters.
Research layer active
Bear-case history
Risks carried through the record.
high
APM gas allocation shortfall continues
Overall priority sector shortfall was 51% in Q2, with CNG segment facing 64% shortfall, requiring costlier spot LNG purchases.
Propane business may dilute margins
Analyst questioned if entering propane could cannibalize natural gas sales; management acknowledged margins in propane are much lower than current gas margins.
Global LNG supply may not ease until FY27
Management noted that competitive LNG pricing may not materialize until FY27, limiting ability to win back propane-switched customers.
Sustained propane price advantage
Propane prices remain lower than natural gas, causing Morbi customers to switch. Recovery depends on propane price movements.
APM gas allocation shortfall
APM shortfall increased to 51%, requiring costlier spot and long-term gas, pressuring margins.
New transmission tariff impact on margins
Analyst noted that every 1 MMSCMD increase in Morbi volumes could reduce gross profit by ₹1/SCM due to new tariffs.
Geopolitical risks to LNG supply
Ongoing geopolitical tensions could disrupt LNG supply chains and cause price volatility, delaying project timelines.