Buy Gujarat Gas Ltd For Target Rs.600 - Anand Rathi Shares and Stock Brokers
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* Gujarat Gas Ltd. is India's largest City Gas Distribution (CGD) company, with 27 CGD licenses spread across 44 districts in 6 states and 1 Union territory in the states of Gujarat, Maharashtra, Rajasthan, Haryana, Punjab and Madhya Pradesh and Union Territory of Dadra & Nagar Haveli.
* Gujarat Gas Ltd. holds the leadership position in CGD industry in terms of size and scale of operation, with more than 17.40 lakhs households, over 13,700 commercial customers, 721 CNG stations, close to 4,337 industrial units and over 33,500 kilometre of natural gas pipeline network. The Company currently continues to flow total gas volume close to 9.75 mmscmd.
* The company reported consolidated revenue from operations of ?41,078 million up by 11.1% year-on-year. The Company's gas sales volumes for the September quarter was at 7.62 mmscmd. During the quarter, the Company added more than 45,400 new domestic customers, 20 CNG stations, 257 commercial customers and commissioned 61 new industrial customers. As on 30th September 2022, the company has a signed volume of - 5,60,000 scmd which is in the process of commissioning.
* Due to recent volatility in the global markets, price of natural gas has increased sharply. This has resulted in some of the industrial clients to switch towards propane. However, with the stabilization in the macro environment the price of natural gas is expected to be competitive.
* The EBITDA from operations for the quarter was up by 53.4% year-on-year at ?6,427 million with an operating margin of 15.6%. The company reported PAT of ?4,040 million for the quarter, up by 64.7% year-on-year with a net margin of 9.8% translating into EPS of ?5.87 per share for the quarter.
* GUJGASLTD is likely to benefit from government of India’s target to increase the share of natural gas in the overall energy consumption mix to 15 percent from the current levels of 6 percent by 2030. We continue to remain positive on the company given the company’s leadership in CGD business, growth potential, strong balance sheet & growing importance of natural gas in the overall energy mix. We maintain our BUY rating on the stock with a revised target price of ? 600 per share.
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