Buy Gujarat Gas; target of Rs 505: ICICI Direct

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26 Aug, 2025 12:21

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ICICI Direct's research report on Gujarat Gas

Gujarat Gas’ Q3FY21 results were better than our estimates on all fronts. Revenues increased 12.9% YoY at Rs 2829.4 crore (our estimate: Rs 2608.5 crore) as sales volume jumped 22.9% YoY during the quarter. Sales volume at 11.4 mmscmd was above estimate of 10.6 mmscmd. Realisation was at Rs 26.9/scm (our estimate: Rs 26.7/scm). Higher-than-expected realisation coupled with lower gas costs led to increase in gross margins that improved by Rs 1.2/scm YoY to Rs 7.8/scm (our estimate: Rs 7.3/scm). EBITDA was at Rs 614.8 crore, up 65.9% YoY (our estimate: Rs 476.4 crore). Subsequently, PAT increased 99.5% YoY to Rs 392.2 crore (our estimate: Rs 280.1 crore).

Outlook

We roll over valuations to FY23 and maintain BUY on the stock with a revised TP of Rs 505 (21x FY23E EPS) (earlier Rs 400/share).

For all recommendations report, click here

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