ICICI Direct is bullish on Adani Gas has recommended buy rating on the stock with a target price of Rs 130 in its research report dated May 11, 2020.
ICICI Direct's research report on Adani Gas
Adani Gas (AGL) reported a good set of Q4FY20 numbers on the profitability front. Operating revenues declined marginally 0.8% YoY to Rs 490.3 crore on account of the lockdown in the last week of March. Sales volume came in at 1.6 mmscmd, up 2.8% YoY. EBITDA for the quarter increased 20.3% YoY to Rs 168 crore due to better gross margins. Gross margins were at Rs 16.6/scm, up Rs 3.6/scm YoY. EBITDA/scm was at Rs 11.6/scm, Rs 1.7/scm higher YoY. Hence, PAT was 61.2% up YoY at Rs 122.1 crore, boosted by lower tax rate.
We have a positive outlook on the stock from a long term perspective as AGL is well poised to benefit from India’s growing CGD sector. We maintain BUY with a target price of Rs 130.
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