Gujrat Gas’ (GUJGA) volumes came in line with our estimate at 8.7mmscmd in 2QFY26, as both CNG/I&C-PNG volumes were in line with our estimate. Morbi volumes declined ~0.4mmscmd QoQ to ~2.1mmscmd, primarily due to customers shifting toward cheaper alternate fuels. EBITDA/scm margin contracted ~INR0.8 QoQ to INR5.6 (in line with estimates), largely due to a decrease in realization.
OutlookThe stock is trading at a P/E of 22.2x FY27E and EV/EBITDA of 13x for FY27E. We reiterate our BUY rating on the stock with a TP of INR500, valuing it at 24x Dec’27E EPS.
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