Prabhudas Lilladher's research report on Gujarat Gas
Gujarat Gas (GUJGA) reported EBITDA of Rs3.8bn (down 26% QoQ, PLe: Rs3.6bn, BBGe: Rs4.4bn) and PAT of Rs2.2bn (down 27.8% QoQ, PLe: Rs1.9bn, BBGe: Rs2.6bn). Total volume grew 3.4% YoY and 8.2% QoQ primarily led by recovery in Morbi sales. EBITDA/scm declined 31.6% QoQ to Rs4.4 amid higher spot LNG prices and APM de-allocation. While D-PNG and CNG volumes will continue to report steady growth, with LNG prices continuing to remain high at ~US$14/mmBtu in Q4-TD and competition with alternate fuels to persist, industrial volumes are expected to be impacted in near-term. EBITDA/scm guidance has been reduced to Rs4.5-5.5/scm.
Outlook
Accordingly, we build in 7% CAGR volume growth over FY25-27E and an EBITDA of Rs5.5/scm. Maintain ‘Sell’ rating with a TP of Rs395 based on 20x FY27 EPS.
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