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In this blog we are going to get info of full stock analysis of Gas distribution sector in India. You will get stock-wise analysis so read it full.
So, let’s begin.
Gas Distribution Companies listed in India Stocks Info :
| Company Name | Stock Symbol | Type | Role | Market Cap (₹ Cr) | Net Profit (₹ Cr, FY23/24) | Stock Price (₹, approx.) |
|---|---|---|---|---|---|---|
| Indraprastha Gas Ltd (IGL) | NSE: IGL | Public | Major CGD operator in Delhi-NCR | ~35,000 | ~1,900 (FY24) | ~450 |
| Gujarat Gas Ltd (GGL) | NSE: GUJGASLTD | Public | Largest CGD company by volume | ~45,000 | ~1,300 (FY24) | ~550 |
| Mahanagar Gas Ltd (MGL) | NSE: MGL | Public | CGD in Mumbai and surrounding areas | ~12,000 | ~800 (FY24) | ~1,300 |
| Adani Total Gas Ltd (ATGL) | NSE: ATGL | Public | Fast-growing CGD in 20+ cities, JV with TotalEnergies | ~50,000 | ~700 (FY24) | ~1,000 |
| Torrent Gas (via Torrent Power) | NSE: TORNTPOWER | Public | CGD operator in multiple cities | ~60,000* | ~1,500* (FY24, consolidated) | ~1,400* |
| IRM Energy Ltd | NSE: IRMENERGY | Public | Newly listed (2023 IPO), active in Himachal & Gujarat | ~2,500 | ~100 (FY24) | ~500 |
Financial Analysis & Fundamental Analysis of Gas Distribution Companies of India :
Financial Metrics of Indian CGD Companies (Publicly Listed)
| Company | Debt/Equity | P/E (TTM) | P/B | ROE (%) | ROA (%) | Div Yield (%) | EPS (₹) |
|---|---|---|---|---|---|---|---|
| Indraprastha Gas (IGL) | 0.05 | 18.5 | 3.2 | 17.3 | 12.1 | 2.1 | 25.4 |
| Gujarat Gas (GGL) | 0.12 | 34.2 | 5.8 | 16.8 | 9.5 | 0.7 | 16.1 |
| Mahanagar Gas (MGL) | 0.08 | 15.0 | 2.5 | 16.5 | 11.2 | 2.8 | 86.7 |
| Adani Total Gas (ATGL) | 0.30 | 70.4 | 12.1 | 17.2 | 6.3 | 0.2 | 7.2 |
| Torrent Power* | 0.90 | 40.1 | 4.3 | 11.0 | 5.8 | 0.5 | 35.6 |
| IRM Energy | 0.25 | 25.3 | 3.6 | 14.2 | 8.1 | 0.0 (No Dividend) | 19.8 |
Key Insights: Financial Health & Performance of Indian CGD Companies
This table compares six major publicly listed City Gas Distribution (CGD) companies in India across critical financial metrics. Below are the key takeaways:
1. Debt Levels: Who’s Leveraged & Who’s Debt-Averse?
- Lowest Debt:
- IGL (0.05) and MGL (0.08) have minimal debt, indicating strong balance sheets.
- These companies rely more on equity, reducing financial risk.
- Highest Debt:
- Torrent Power (0.90) has significant debt due to its power business (CGD segment is smaller).
- ATGL (0.30) has moderate leverage, likely funding aggressive expansion.
👉 Takeaway: IGL and MGL are safer bets for conservative investors, while ATGL and Torrent Power carry higher debt risk.
2. Valuation: Are These Stocks Overpriced or Undervalued?
- P/E Ratio (Price-to-Earnings):
- ATGL (70.4) trades at a huge premium—investors expect high growth.
- MGL (15.0) is the cheapest, possibly undervalued given its stable earnings.
- Gujarat Gas (34.2) is moderately priced but has a high P/B (5.8), suggesting overvaluation.
- P/B Ratio (Price-to-Book):
- ATGL (12.1) and GGL (5.8) trade far above book value—market expects future profitability.
- MGL (2.5) is the most reasonably priced relative to assets.
👉 Takeaway: ATGL is expensive (growth stock), while MGL looks like a value pick.
3. Profitability: Which Companies Generate the Best Returns?
- ROE (Return on Equity):
- IGL (17.3%) and ATGL (17.2%) lead—efficient in generating profits from shareholders’ money.
- Torrent Power (11.0%) lags due to capital-intensive power operations.
- ROA (Return on Assets):
- IGL (12.1%) and MGL (11.2%) are most efficient in using assets to generate earnings.
- ATGL (6.3%) has lower ROA, likely due to expansion costs.
👉 Takeaway: IGL and MGL are the most efficient operators, while ATGL sacrifices short-term returns for growth.
4. Dividends & Earnings: Who Rewards Shareholders?
- Dividend Yield:
- MGL (2.8%) and IGL (2.1%) are the best dividend payers.
- ATGL (0.2%) and IRM Energy (0%) prioritize reinvestment over dividends.
- EPS (Earnings Per Share):
- MGL (₹86.7) has the highest EPS, benefiting from Mumbai’s high gas demand.
- ATGL (₹7.2) has the lowest, reflecting reinvestment and expansion costs.
👉 Takeaway: Income investors should prefer MGL & IGL, while growth investors may bet on ATGL & IRM Energy.
5. Torrent Power vs. Pure-Play CGD Companies
- Torrent Power’s metrics (D/E: 0.90, ROE: 11.0%) reflect its diversified power business, not just CGD.
- Compared to pure-play CGD firms like IGL and MGL, it carries higher debt and lower profitability.
👉 Takeaway: Investors seeking pure CGD exposure should focus on IGL, MGL, or ATGL instead.
Final Verdict: Who Stands Out?
| Best for… | Company | Why? |
|---|---|---|
| Low-risk investors | IGL, MGL | Low debt, high ROE, good dividends. |
| Growth investors | ATGL, IRM | High P/E, expansion focus. |
| Dividend seekers | MGL, IGL | Highest yields. |
| Value investors | MGL | Low P/E, high ROE. |
Piotroski Scores for City Gas Distribution Companies (FY24)
| Company | Score (0-9) | Key Strengths | Key Weaknesses |
|---|---|---|---|
| Indraprastha Gas (IGL) | 8 | High ROA (12.1%), strong cash flow, low debt | Margin pressure (rising gas costs) |
| Gujarat Gas (GGL) | 7 | Robust volume growth, improving liquidity | High P/B (5.8), debt increased slightly |
| Mahanagar Gas (MGL) | 8 | Zero net debt, high dividends, stable ROE | Asset turnover declined slightly |
| Adani Total Gas (ATGL) | 6 | Rapid expansion, improving margins | High leverage (D/E: 0.3), negative FCF |
| Torrent Power | 5 | Consolidated profit growth | High debt (D/E: 0.9), low ROA (5.8%) |
| IRM Energy | 4 | IPO-funded growth, low debt | Negative OCF, low ROA (8.1%) |
Key Insights for Piotroski F Score of Gas Distribution Companies of India :
- Top Performers (7+ Score):
- IGL (8) and MGL (8) are financially robust—low debt, high cash flow, and efficient operations.
- GGL (7) benefits from volume growth but carries valuation risks.
- Growth vs. Stability Trade-Off:
- ATGL (6) sacrifices short-term financial health for expansion (high capex).
- Torrent Power (5) suffers from power segment drag (not pure-play CGD).
- Weakest Link:
- IRM Energy (4) struggles with cash flow post-IPO but has growth potential.
Credit Ratings for Indian Gas Distribution Companies
| Company | Rating Agency | Long-Term Rating | Outlook | Key Strengths | Key Risks |
|---|---|---|---|---|---|
| Indraprastha Gas (IGL) | CRISIL | AAA | Stable | Strong monopoly in Delhi-NCR, zero debt | Regulatory pricing risks |
| Gujarat Gas (GGL) | ICRA | AA+ | Positive | Pan-India presence, volume growth | Exposure to spot LNG price volatility |
| Mahanagar Gas (MGL) | CARE | AAA | Stable | High cash reserves, low leverage | Limited geographical diversification |
| Adani Total Gas (ATGL) | INDIA RATINGS | AA | Stable | Backed by Adani & TotalEnergies | Aggressive capex, high leverage |
| Torrent Power | ICRA | AA | Stable | Diversified revenue (Power + CGD) | High consolidated debt (D/E ~0.9) |
| IRM Energy | CARE | A+ | Stable | Post-IPO equity infusion | Small scale, negative cash flows |
Final words with Credit Ratings :
- Safest Bets: IGL & MGL (AAA, stable).
- Growth Play: ATGL (but watch debt).
- Riskiest: IRM Energy (needs turnaround).
Conclusion :
City Gas Distribution Companies: Investment Analysis (2024-25 Outlook)
| Company | Future Prospects | Financial Strength | Short-Term | Long-Term | Bullish Case Why Buy(✓) | Bearish Case Why Avoid (✗) |
|---|---|---|---|---|---|---|
| IGL | Stable demand in Delhi-NCR; limited expansion scope | Strong (AAA, debt-free) | Neutral | Hold | Monopoly, high dividends | Regulatory pricing risks, saturation |
| Gujarat Gas | Volume growth from industrial demand; LNG price sensitivity | Good (AA+) | Buy | Buy | Pan-India reach, margin recovery | LNG volatility, competition |
| MGL | Steady Mumbai demand; potential suburban expansion | Very Strong (AAA) | Hold | Buy | Cash-rich, high ROE | Limited growth geography |
| Adani Total Gas | Aggressive expansion (20+ cities); EV charging synergy | Moderate (AA, high leverage) | Speculative | Buy | Backed by Adani, green energy push | Debt risk, execution challenges |
| Torrent Power | CGD + power synergy; stable cash flows | Moderate (AA, high D/E) | Hold | Hold | Diversified revenue | Power segment drags returns |
| IRM Energy | High growth potential in new areas (Gujarat/Himachal) | Weak (A+) | Avoid | Speculative | Post-IPO growth potential | Negative cash flows, small scale |
Key Investment Insights for Gas Distribution Companies of India :
1. Top Picks for 2025
- Long-Term Buy:
- Gujarat Gas (GGL): Industrial demand + LNG infrastructure.
- Adani Total Gas (ATGL): High-risk, high-reward expansion play.
- Safe Dividend Stocks:
- IGL & MGL: Monopolies with stable cash flows.
2. Avoid/Speculative
- IRM Energy: Too early; wait for cash flow turnaround.
- Torrent Power: Only if you want power sector exposure.
3. Bullish Triggers
- Policy Support: Govt’s push for cleaner fuels (CNG, CBG).
- Urbanization: Rising CNG demand in cities.
- EV Synergy: ATGL’s EV charging stations (future growth).
4. Bearish Risks
- Regulatory Risks: Gas price controls hurting margins.
- Debt Concerns: ATGL/Torrent’s high leverage.
- Competition: New CGD licenses in existing areas.
Final Recommendations
- Conservative Investors: Stick with IGL/MGL (AAA, dividends).
- Growth Seekers: Bet on ATGL/Gujarat Gas (higher volatility).
- Avoid: IRM Energy until profitability improves.
So, this is about Gas Distribution companies of India and their stocks analysis.
Happy Investing
Extra Reference :
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