Gujarat Gas received authorization from the Petroleum and Natural Gas Regulatory Board (PNGRB) for the city gas distribution areas of Surat, Bharuch and Ankleshwar.
The company filed tariff application with PNGRB for its transmission pipeline. However, owing to high ROE (return on equity) of over 30 percent, the company is vulnerable to tariff reduction from PNGRB, as was ordered for Indraprastha Gas. This is an operational performance risk, pointed out by SBI Cap Securities.
In a research report on Gujarat Gas, SBI Cap Securities said it expects better financial performance of the company going forward with gas sales volume to pick up gradually.