Gujarat Gas share prices falls sharply as analysts cut earnings outlook after weak Q3

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26 Aug, 2025 12:21

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The share price of Gujarat Gas fell 6 percent in the morning trade on February 9 after brokerages cut their earnings estimate for the company after weak earnings for the quarter ended December.

Gujarat Gas on February 8 reported a 69 percent year-on-year decline in net profit to Rs 121.9 crore for the quarter ended December due to a sharp increase in raw material prices. The company’s cost of materials soared 132 percent on-year to Rs 4,671.4 crore during the quarter due as natural gas prices soared.

The company’s topline performance was firm. Revenues grew 81 percent on a year-on-year basis to Rs 5,241.2 crore for the December quarter largely because of higher gas prices.

The company’s operating margin tanked to 4.6 percent from 21.7 percent in the year-ago quarter, reflecting the adverse impact of higher raw material prices.

Brokerage firm CLSA India reportedly cut its earnings per share (EPS) estimate for the company by 2 percent for 2022-23 (FY23) and 4 percent for 2023-24 (FY24) following the weak earnings performance.

Similar cuts came from Jefferies India, which slashed Gujarat Gas' EPS forecast for FY23 and FY24 by 5 percent each.

Brokerage firm JM Financial Services, however, retained its "buy" call on the stock and left the price target unchanged at Rs 780.

“It remains one of our top picks as we expect it to register robust volume growth led by a rise in gas use by industrial consumers due to the NGT’s  (National Green Tribunal) March 19 order banning the use of coal-based gasifier in Morbi and strong competitiveness of gas,” JM Financial said.

Brokerage firm Motilal Oswal Financial Services also retained its "buy" call, as it expects the company to generate net cash in the current financial year.

At 10.55 am, shares of Gujarat Gas had pared some of the losses to trade 0.7 percent lower at Rs 660.3 on the National Stock Exchange.Disclaimer: The views and investment tips expressed by investment 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.