Motilal Oswal's research report on Gujarat Gas
Spot LNG prices have risen to USD34/mmBtu from USD19/mmBtu in CY21, making alternate fuels such as LPG more attractive in Morbi, Gujarat. However, we highlight that over the long term, LNG would continue to remain cheaper than LPG, except during the summer season. Further, increased availability of domestic gas over the few months is likely to help GUJGA reduce its sourcing cost, thereby help improve its margins. GUJGA trades at 20x FY24 EPS of INR25. We expect its volume to register a CAGR of 13% over FY22-24E. Valuing the stock at 26x FY24E EPS, we reiterate our Buy rating on the company and retain it as our top pick in the sector.
We estimate 11.8/13.5mmscmd of total sales in FY23/24, up from 10.7mmscmd in FY22. Our EBITDA/scm estimate stands at INR5.5 for FY23/24, up from INR5.3 in FY22. We value the stock at 26x FY24E EPS and reiterate it as the top pick in the sector.
At 16:01 hrs Gujarat Gas was quoting at Rs 408.85, up Rs 1.40, or 0.34 percent.
It has touched an intraday high of Rs 414.15 and an intraday low of Rs 403.80.
It was trading with volumes of 70,210 shares, compared to its thirty day average of 161,475 shares, a decrease of -56.52 percent.
In the previous trading session, the share closed down 3.11 percent or Rs 13.10 at Rs 407.45.
The share touched its 52-week high Rs 786.65 and 52-week low Rs 405.65 on 04 August, 2021 and 17 June, 2022, respectively.
Currently, it is trading 48.03 percent below its 52-week high and 0.79 percent above its 52-week low.
Market capitalisation stands at Rs 28,144.83 crore.
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