Moneycontrol PRO
Upcoming Event:Attend Algo Convention Live, 2 Days & 12+ Speakers at best offer Rs.999/-, exclusive for Moneycontrol Pro subscribers. Register now!

Buy Gujarat Gas; target of Rs 630: Emkay Global Financial

Emkay Global Financial is bullish on Gujarat Gas has recommended buy rating on the stock with a target price of Rs 630 in its research report dated May 11, 2022.

May 12, 2022 / 05:46 PM IST
 
 
live
  • bselive
  • nselive
Volume
Todays L/H
More

Emkay Global Financial's report on Gujarat Gas


Gujarat Gas reported Q4FY22 EBITDA/APAT of Rs6.97bn/Rs4.53bn (up 26%/30% yoy and ~3x/4x qoq), beating our estimates significantly on the back of a 3.5x qoq jump in EBITDA/scm (almost 50% above est.). Volumes were largely in line with estimates. Total gas sales fell 18% yoy and 13% qoq to 9.9mmscmd. Industrial PNG was down 30% yoy/20% qoq at 6.7mmscmd. CNG was up 30% yoy/3% qoq at 2.2mmscmd. Domestic PNG grew 12% yoy/22% qoq to 0.8mmscmd, while Commercial PNG was flat qoq. Net realization rose 7% qoq, while unit gas cost declined 6%, resulting in an over 2x jump in gross margin to Rs10.7/scm. Unit opex was up 42% yoy/23% qoq at Rs2.8/scm. EBITDA/scm, hence, rose to Rs7.8 (up 55% yoy).



Outlook


We reduce our FY23E/FY24E EPS by 2%/6% as we lower our volume assumption, partly offset by higher margins. We reduce our Mar’23 DCF-based TP by 6% to Rs630/sh, but owing to an attractive valuation amid an improving outlook, we upgrade GGL to Buy/OW.

Close

For all recommendations report, click here


Disclaimer: The views and investment tips expressed by investment experts/broking houses/rating agencies on moneycontrol.com are their own, and not that of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.



Download your money calendar for 2022-23 here and keep your dates with your moneybox, investments, taxes

Broker Research
first published: May 12, 2022 05:46 pm
Sections
ISO 27001 - BSI Assurance Mark