Gagan Gases Limited

Energy — Oil & Gas Refining & Marketing · BSE

₹19.00₹0.00 (0.00%)

DalalBaazaar Score

46 / 100

🟡 Moderate

Verdict

CAUTION

Risk

Moderate

Driven by negative free cash flow, micro-cap size, which brings thin liquidity, falling profits.

In simple words: The business is earning a fairly low return on the money invested in it, but sales are shrinking. Cash generation is currently the main factor to watch.

Decision support, not a buy or sell call.

As of 18 Oct 2026, 7:02 pm

Understanding the Business

Company site ↗

The 60-second version of Gagan Gases Limited — what it does, how it earns, and who it competes with, before any of the numbers below.

What does this company do?

Gagan Gases Limited engages in the bottling and selling of LPG for commercial and industrial use in the private sector and markets in India. The company operates LPG bottling plant at Pithampur, as well as provides assistance to Reliance and Aegis Gas.

IndustryOil & Gas Refining & Marketing

SectorEnergy

Annual revenue₹6 Cr

How does it make money?

Turns over ₹6 Cr a year. Of every ₹100 of sales, about ₹2 reaches shareholders as profit, with ₹4 left at the operating level before interest, tax and depreciation.

Who are its competitors?

The closest listed comparisons in its industry are RELIANCE INDUSTRIES LTD, OIL AND NATURAL GAS CORP., BHARAT PETROLEUM CORP LT, INDIAN OIL CORP LTD. These are the companies its valuation and returns are measured against elsewhere in this report.

Compared side by side in Peers ↓

What is its competitive advantage?Little sign of one

Returns on capital of 5.5% are at or below what the capital likely costs. That is the financial pattern of a business competing largely on price, where advantage has to come from execution rather than position.

Peer median ROE15.4%

What has been driving growth?

Growth has come mainly from selling more, rather than from keeping more of each sale. Over 3 years revenue moved +173% while net margin moved -97% relative to itself. What this cannot tell you is which products, customers or geographies did the work — that lives in the segment disclosures of the annual report.

Revenue effect+173%

Margin effect-97%

DalalBaazaar Score

46/ 100

Moderate

Weighted across six categories. Every point is explained below.

✗ ROCE of 5.5% is below 10% — capital is not working hard
✗ ROCE has fallen by 66.9 points — returns are eroding
✗ EBITDA margin of 3.7% is thin — little cushion if costs rise
✗ Net margin of 4.3% is slim
• Revenue has compounded at 39.7% a year, which is the base these returns are earned on

Quality vs. Valuation

Company Quality

45/ 100

Average

How good the business is, ignoring the share price entirely.

Valuation

42/ 100

Expensive

What you are being asked to pay, ignoring how good the business is.

A reasonable business at a reasonable price — neither the quality nor the valuation stands out in either direction.

Historical Valuation

Current P/E

33.9x

3Y Median

40.6x

40 monthly readings · mean 69.3x · range 4.0x–186.0x

Sector Median

6.9x

median of 4 sector peers

🟢Current valuation is approximately 16% below its 3y median of 40.6x. Cheaper than its own history, which is worth a reason too: the market may be pricing in something the backward-looking numbers do not show.

⚠️Against its sector it trades 394% above the peer median of 6.9x.

vs. its own history

Fair

40.6x median over 40 months · -16%

vs. sector peers

Expensive

6.9x median of 4 peers · +394%

vs. generic bands

Fair

15x–35x

EV/EBITDA

38.7x

PEG

—

What's Good / What's Bad

🟢 What's Going Well2

Very low debt
Debt/Equity of 0.11x leaves the balance sheet with plenty of headroom.
Consistently profitable
Profitable in every one of the last 4 reported years.

🔴 What Needs Attention2

Return on equity is falling
ROE has dropped from 62.5% to 4.0% — each rupee of shareholder capital earns less than it did.
Return on capital is falling
ROCE has declined from 72.4% to 5.5% — often a sign of competition or overexpansion.

Red Flags

3 items require attention · 1 high · 2 watch

🔴Significant margin compressionFinancial
EBITDA margin has fallen 6.7 points, from 10.4% to 3.7%.
🟡Free cash flow is negativeFinancial
Free cash flow was -₹0 Cr in the latest year.
🟡Profit is decliningFinancial
Net profit is down 93% over 3 years.

Investment Thesis

🟢 Bull CaseWhat could make this work?

Earnings have proved durable
Profitable in every one of the last 4 reported years. Consistency lowers the risk that any single bad year is structural rather than cyclical.

🔴 Bear CaseWhat could go wrong?

Margins are being competed away
EBITDA margin has fallen from 10.4% to 3.7%. If the trend continues, profit falls even on flat sales — and margin decline rarely reverses quickly.
A premium to the sector to defend
It trades 394% above the peer median. That premium needs a reason that persists, or it closes.
Returns on shareholder capital are falling
ROE has dropped from 62.5% to 4.0%. Each rupee of equity earns less than it did, so profit growth increasingly depends on raising more capital rather than on the existing base working harder.
Earnings are hard to forecast
Profit has swung sharply from year to year, so any single year — good or bad — is a weak guide to the next. Cyclical earnings deserve lower multiples for that reason.
Size brings its own risk
Micro Cap businesses are thinly traded, so exits are harder in a falling market and single events move the price more than they would for a larger company.

🟡 Key Things to WatchMeasurable tripwires, set against where this company stands today

1Revenue growth stays above 30% a year✓ 39.7% CAGR
Latest reported year was -38.2%. The bar is set below the established compounding rate, so ordinary variation does not trip it.
2EBITDA margin holds above 2%✓ 3.7%
Two points below today's level — enough room for noise, tight enough to catch real compression.
3Free cash flow remains positive✗ -₹0 Cr
Profit that never becomes cash eventually stops being profit.
4Debt / EBITDA stays below 2x✓ 1.8x
The ratio lenders write covenants against; it survives a small or negative equity base, unlike Debt/Equity.
5ROCE stays above 8%✗ 5.5%
Falling returns on capital are usually competition arriving, and show up here before they reach the margin.

Investment Checklist

4 / 11 checks passed

✗ Strong return on equity (ROE ≥ 15%)
✗ Strong return on capital employed (ROCE ≥ 15%)
✗ Healthy net margin (≥ 10%)
✗ Generates positive free cash flow
✓ Manageable leverage (Debt/Equity < 1.0)
✓ Adequate short-term liquidity (Current Ratio ≥ 1.0)
✗ Revenue growing year-over-year
✗ Profit growing year-over-year
✓ Not trading at an extreme valuation (P/E < 40x)
✓ Not buying right at the 52-week high
✗ Short-term technical trend isn't bearish

Price history

Quick Metrics

2 good · 4 neutral · 5 weak

Market Cap

₹9 Cr

Micro Cap

Smaller company — thin liquidity and deep drawdowns are normal here

P/E (Trailing)

33.9x

Fair

Fairly valued against the generic band

P/B Ratio

2.45x

Fair

Moderate premium to the company's book value

EPS (TTM)

₹0.56

Profitable

Profitable on a per-share basis

ROE

4.0%

Weak

Weak capital efficiency

ROCE

5.5%

Weak

Low return on total capital employed

Debt/Equity

0.11x

Low

Conservative leverage

Revenue Growth (YoY)

-38.2%

Shrinking

Sales are contracting

Profit Growth (YoY)

-47.6%

Falling

Profits are shrinking

Dividend Yield

None

No dividend yield reported — usually means no payout, but verify if one was recently initiated

Free Cash Flow

-₹0 Cr

Cash burning

Spending more cash than the operations bring in

More Metrics

Operating Margin

7.3%

Average

Average margins

Net Margin

4.3%

Average

Average bottom-line conversion

Current Ratio

22.37

Comfortable

Healthy short-term liquidity

Beta (vs Nifty)

-0.10

Defensive

Steadier than the market

52W Range Position

28%

Mid-range

Technical Snapshot

SMA 20 / SMA 50

19.4 / 19.7

Bearish alignment (short < long)

Price vs SMA 200

Below

Long-term downtrend

RSI (14)

38.9

Neutral momentum

Financial Trend (4-Year)

Metric	FY23	FY24	FY25	FY26	3Y CAGR
Revenue	₹2 Cr	₹2 Cr	₹6 Cr	₹6 Cr	+39.7%
EBITDA	₹0 Cr	₹0 Cr	₹0 Cr	₹0 Cr	-1.1%
EBITDA Margin	10.4%	7.8%	6.1%	3.7%	—
PAT (Net Profit)	₹2 Cr	₹0 Cr	₹0 Cr	₹0 Cr	-57.9%
EPS	₹4.13	₹0.13	₹0.59	₹0.31	-57.8%
ROE	62.5%	2.0%	8.0%	4.0%	—
ROCE	72.4%	3.4%	10.0%	5.5%	—
Total Debt	₹0 Cr	₹0 Cr	₹0 Cr	₹0 Cr	+1.7%
Free Cash Flow	-₹0 Cr	₹0 Cr	₹0 Cr	-₹0 Cr	—

🟢 Revenue has grown at 39.7% a year over 3 years.

🟡 EBITDA has been broadly flat over 3 years (-1.1% a year).

🔴 EBITDA Margin has fallen from 10.4% to 3.7% over 3 years (-6.7 pts).

🔴 PAT (Net Profit) has shrunk at 57.9% a year over 3 years.

🔴 EPS has shrunk at 57.8% a year over 3 years.

🔴 ROE has fallen from 62.5% to 4.0% over 3 years (-58.5 pts).

🔴 ROCE has fallen from 72.4% to 5.5% over 3 years (-66.9 pts).

🟡 Total Debt has been broadly flat over 3 years (1.7% a year).

Balance Sheet & Cash Flow — FY2026

Total Assets

₹4 Cr

Total Liabilities

₹1 Cr

Cash & Equivalents

₹0 Cr

Operating Cash Flow

-₹0 Cr

Capex

—

Shareholding (proxy)

Institutional Holding

0.0%

Insider Holding

54.2%

Peer Comparison

Company	P/E	ROE
RELIANCE INDUSTRIES LTD	21.9x	8.3%
OIL AND NATURAL GAS CORP.	6.4x	11.7%
BHARAT PETROLEUM CORP LT	7.3x	17.1%
INDIAN OIL CORP LTD	5.3x	15.4%

Recent News

1 mixed5 general

Gagan Gases Ltd. Key Financial Ratios – Valuation, Profitability & More

Value Research, 16 Sept

Gagan Gases shareholders approve FY26 accounts, reappoint directors

scanx.trade, 26 Sept

Q2 results today: HDFC Bank, ICICI Bank, Axis Bank among 18 firms on Oct 17

Business Standard, 17 OctResults

🟡Mixed / dependsA results event. The figures on this page update once the new statements reach the data feed, which usually lags the announcement.

Gagan Gases Ltd. Shareholding Pattern – Promoters, FIIs & DIIs

Value Research, 03 Sept

GAGAN GASES LTD. Share Price

Upstox, 05 Apr

Gagan Gases Ltd. Financials – Balance Sheet, Profit & Loss, Cash Flow

Value Research, 10 Sept

Watch Items

Revenue growth is negative (-38.2%) on the latest reported period — check if this is one-off or a trend.
Cross-check against the company's latest quarterly filing / investor presentation before acting.

DalalBaazaar Thesis

StrongFinancial Health

MiddlingValuation

WeakBusiness Quality · Growth · Profitability · Risk

Points for each in the Score ↑

Unremarkable in both directions

A reasonable business at a reasonable price. Nothing here is alarming and nothing is compelling, which usually means the decision rests on things this data cannot see — the industry's direction, management's intent, and what else is available to you. 1 high-severity red flag sits above this conclusion and should be read first.

2 of 5 tripwires tripped — Free cash flow remains positive; ROCE stays above 8% · see Key things to watch ↑