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Last Updated : Aug 05, 2020 09:32 AM IST | Source: Moneycontrol.com

Gujarat Gas share price falls post Q1 results; brokerages maintain buy

Revenue was down 58.6% at Rs 1,083 crore versus Rs 2,614.6 crore.

 
 
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Gujarat Gas share price shed over 1 percent in early trade on August 5 after the company reported its June quarter number.

The company’s Q1 net profit fell 74.7 percent YoY to Rs 59.1 crore versus Rs 234 crore, revenue was down 58.6 percent to Rs 1,083 crore versus Rs 2,614.6 crore.

Earnings before interest, tax, depreciation and amortization (EBITDA) was down 60.2 percent to Rs 185.7 crore and the margin was at 17.1 percent.

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CLSA | Rating: Buy | Target: Raised to Rs 370 from Rs 345

The Q1 profit was 66 percent ahead of research house estimate driven by a beat in the unit margin. The volumes saw a sharp recovery boosted by normalisation in industrial volume.

CLSA raised its FY21 volume forecast and this takes up FY21 EPS estimate by 18 percent. The depressed LNG & domestic gas prices should lower the input costs, reported CNBC-TV18.

Sharekhan

A sharp recovery in the company’s volume to 9.5 mmscmd (95 percent of Q4 FY2020 volume) and robust margin bodes well for speedy earnings recovery. The broking house expects the company to clock a PAT CAGR of 9 percent over FY2020-FY2022E.

The long-term volume growth outlook remains robust as structural drivers like the ban on polluting fuels and low LNG prices are well-placed to boost industrial PNG demand. Robust FCF generation to make GGAS cash positive in the next two years.

Sharkhan is positive on Gujarat Gas and expects an 18-20 percent upside despite a recent sharp run-up in stock price.

Motilal Oswal | Rating: Buy | Target: Rs 360

Despite lockdown, the company was able to add 13 new CNG stations during the quarter and plans to add around 60 new CNG stations this year

On a conservative basis, Motilal Oswal assumes total volumes of 8.4mmscmd for FY21 (against 9.4mmscmd in FY20) and 11.1mmscmd for FY22, with EBITDA/scm of Rs 4.8 for FY21/22E (unchanged).

However, continued outperformance in volumes and margins could lead to an upward revision in estimates, along with the re-rating of the stock.

At 09:18 hrs, Gujarat Gas was quoting at Rs 307.25, down Rs 2.40, or 0.78 percent on the BSE.
First Published on Aug 5, 2020 09:32 am
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