CRISIL Reaffirms AAA/Stable Rating on Gujarat Energy Ltd's Long-Term Bank Facilities

CRISIL Reaffirms AAA/Stable Rating on Gujarat Energy Ltd's Long-Term Bank Facilities​

CRISIL Ratings Limited has reaffirmed its 'AAA/Stable' rating on the long-term bank facilities of Gujarat Energy Limited (GEL), which was formerly known as Gujarat Gas Limited. The rating covers a total non-fund based limit facility amounting to Rs 3,350 Crore.

The rating follows an assessment of GEL's business and financial risk profile. As of March 31, 2026, the company maintains a strong financial risk profile and is reported as net debt negative. This status is supported by the expectation that capital expenditure (capex) for its CGD segment will be incurred from internal accrual only, while the trading arm of the company has no material capex plan.

GEL's market position in India is significant; it stands as the largest city gas distribution (CGD) player, possessing 27 CGD licenses spread across 44 districts in six states and one union territory. The company boasts a strong user base, including over 24 lakh domestic connections, 839 CNG stations, and nearly 4,460 industrial units as of March 31, 2026.

The merged entity is the country's third-largest gas trading company. While GEL demonstrated sustained operating performance—passing on input price increases in its CNG and piped natural gas (PNG-D) segments—the overall revenue of the merged entity degrew by approximately 13% on year for fiscal 2026, as transmission business was not consolidated in the fiscal 2026 financials.

Financial Overview and Performance Indicators​

The company shows robust liquidity, reporting healthy cash and bank balances exceeding Rs 5,000 crore as of March 31, 2026. GEL is expected to generate an annual cash accrual between Rs 3,000-3,600 crore, which should be adequate to support the annual capex requirement estimated at Rs 800-1,000 crore.

Key financial indicators for Gujarat Energy Limited are presented below:

Operational Strengths and Risks​

The rating rationale highlights several strengths, including the established market position in the CGD industry, diversification of the customer base, and extensive access to necessary infrastructure through its subsidiaries.

However, the company faces exposure to volatility in liquefied natural gas (LNG) and domestic natural gas prices. Additionally, there are project risks related to timely and cost-efficiently setting up its CGD network in newly awarded geographical areas (GAs), alongside regulatory risks.

The company's CGD sales volume dipped in fiscal 2026 to 8.69 million metric standard cubic meters per day (mmscmd) from 9.62 mmscmd in fiscal 2025, partly attributed to the fall in demand within the Morbi cluster amid increasing premium of natural gas over propane.

The rating also points out that the CGD business remains exposed to competition after the marketing exclusivity period concludes for authorized geographical areas (GAs), with approximately 50% of GEL's current CGD volume mix accruing from the industrial and commercial (I&C) segment, which is sensitive to alternate fuel pricing.

GUJGASLTD Stock Price Movement​

As of 1:08 PM, shares of Gujarat Gas Limited are shedding 2.18% in live trading, currently priced at ₹383.6 after falling by ₹8.55 from the previous close. The stock has seen a considerable intraday activity with 171,057 shares traded so far.