Shares of Gujarat Gas Ltd slumped over 3 percent in morning trade on August 3 after the city gas distribution company posted a 43.4 percent year-on-year decline in consolidated net profit at Rs 216 crore for the first quarter of 2023-24.
At 11.15 am, shares of the company were trading 3.44 percent down at Rs 455.80 on the BSE.
Gujarat Gas Limited had clocked a consolidated net profit of Rs 382 crore in the year-ago period.
Revenue from operations was down 26.2 percent at Rs 3,924 crore from Rs 5,322 crore in the year-ago period. The reduction in revenue from operations mainly reflects lower selling prices, the company said in a press release post-market hours on August 2.
Both net profit and revenue missed analyst estimates.
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The company reported an EBITDA of Rs 412.71 crore in Q1FY24, compared to Rs 626.39 crore in the same period last year.
Gujarat Gas said that 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.
The company said the increase in industrial volume was due to softer spot LNG prices, benefit of which was passed to industrial customers to make natural gas more competitive to alternate fuels.
CNG volume in the quarter was at 2.61 mmscmd on the back of investments in CNG station infrastructure coupled with favourable government policies of reduction in APM gas prices and lower VAT rates, the company said.
Gujarat Gas added more than 46,000 new domestic customers, 225 commercial customers and commissioned 36 new industrial customers (with a cumulative volume close to 1,09,000 scmd) during the quarter.
The company signed a supply volume of approximately 4,27,000 scmd (standard cubic meter per day) on June 30, which is yet to be commissioned.
In a note, domestic brokerage firm JM Financial said it has cut the target price for the stock to Rs 570 from Rs 600.
“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,” it added.
Shares of Gujarat Gas are down 7 percent on YTD basis, while the 1-year return stands at (-)1.4 percent.
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Disclaimer: The views and investment tips expressed by experts on Moneycontrol.com are their own and not those of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.
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