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Buy Gujarat Gas; target of Rs 553: Prabhudas Lilladher

Prabhudas Lilladher is bullish on Gujarat Gas has recommended buy rating on the stock with a target price of Rs 553 in its research report dated August 04, 2022.

August 06, 2022 / 08:36 AM IST
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Prabhudas Lilladher's research report on Gujarat Gas


GGAS reported lower than expected Q1 results with EBIDTA/PAT of Rs6.1bn (-13%Q/Q; PLe Rs6.5bn) and Rs3.8bn (-14%Q/Q; PLe Rs4.1bn). Q1 industrial volumes were flat QoQ, as demand shifted to Propane due to seasonally low prices. However it will increase in H2 with winter demand. GGAS has tied in spot LNG volumes below USD28/mmbtu till Feb-23 (price is ~USD22-25/mmbtu till Sept-22) which will support volumes as demand shifts in H2 when propane prices increase. Also at current Brent prices, blended industrial gas price will be down USD1.1/mmbtu for Q2 (Q1 avg USD112/bbl).


Outlook


We like GGAS as a structural play on industrial gas demand and maintain our FY23-24E earnings. Reiterate ‘BUY’ with a DCF based PT of Rs553 (Unchanged).


For all recommendations report, click here

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Gujarat Gas - 040822 - prabhu

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first published: Aug 6, 2022 08:36 am
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