State run Gujarat Gas Ltd has increased the industrial gas price by Rs 2.50 to Rs 43.33 per standard cubic metre (scm) from the existing Rs 40.83 per scm effective from September 1, CNBC-TV18 reported citing sources. The price hike is due to higher spot liquefied natural gas (LNG) prices, according to the report.
This was the second price hike by Gujarat Gas in a month.
At the beginning of the year, the industrial gas rates were Rs 47.93/scm. After the fifth price cut by Gujarat Gas in 2023, in the month of May, the industrial gas rate was Rs 38.43 per scm.
The financials
Earlier this month, Gujarat Gas reported a 43.4 percent year-on-year decline in consolidated net profit at Rs 216 crore in the first quarter of the financial year 2023-24. The company reported an EBITDA of Rs 412.71 crore in Q1FY24, compared to 626.39 in the same period last year.
Gujarat Gas said its total gas sales volume for the quarter stood at 9.22 mmscmd (million metric standard cubic meters per day), compared to 8.86 mmscmd in the preceding quarter. Industrial volume increased 10 percent from the earlier quarter (Q4FY23) to 5.88 mmscmd.
" We have cut our FY24/FY25 EBITDA estimate by 12%/8% to account for lower margin, partly offset by 2-3% upgrade in volume. Hence, our TP has been cut to INR 570/share (from INR 600/share). Despite near-term volatility in earnings depending on propane price competitiveness, we reiterate BUY as we expect volume growth momentum to sustain in the medium to long term led by rise in gas use in the industrial segment, normalisation of propane prices and limited threat from electric vehicles," said JM Financial in its latest note.
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