Gujarat Gas Ltd. share price target

Gujarat Gas (GG) is one of India's largest player in the industrial gas segment and city gas distribution (CGD) with a dominant presence in Gujarat. It caters to the gas demand of ~3000 industrial consumers, ~5 lakh CNG vehicles and ~12 lakh households in Gujarat. Total volumes in FY17 were at 5.4 mmscmd with the industrial and retail segment contributing ~68% of total volumes. Gujarat Gas has been rapidly expanding its reach in Gujarat by way of securing licenses to expand its CGD network across five new areas, making it to 19 districts of Gujarat,...

Gujarat Gas announced its Q2FY18 results, which were below our estimates on both revenues and profitability front as a result of lower than estimated volumes. Revenues increased 12.5% YoY to | 1391 crore and came in below our estimates of | 1498.7 crore Total reported volumes came in at 5.7 mmscmd vs. our estimate of 6.1 mmscmd. Gross margins at | 6.7/scm came in below our estimates of | 7.3/scm on account of higher spot LNG prices. As a...

4.0mmscmd (+13% YoY, -9% QoQ), and PNG household volumes at 0.5mmscmd (+5% YoY, +4% QoQ). Sequential decline in volumes was led by non-inclusion of gas under GST, state bringing in a cut in VAT with a delay, and flooding-related shutdowns by consumers. According to management, the volumes lost have been made up for at the exit of the quarter. CNG volumes up 7% YoY: CNG volumes stood at 1.3mmscmd (+7% YoY, -1% QoQ). Unless CNG volumes become a larger contributor, the company would continue witnessing volatility in volumes and margins, in our view....

We had highlighted in our previous report how cheaper propane and LPG were emerging as the alternatives at Morbi. Sale of propane stands slightly lower at 0.07mmscmd due to an increase in prices. However, our channel checks suggest that there are 15 new propane installations coming up at Morbi by March 2018, and 28 more are in various stages of construction. Increased flexibility would result in higher volatility for GUJGA. Coal prices are at INR8/kg, ~15% cheaper than gas....

Volume growth to remain stable in coming quarters Volumes during the quarter increased 19.1% YoY to 6.1 mmscmd but came in slightly below our estimates of 6.3 mmscmd mainly on account of lower than estimated industrial and domestic PNG volumes. The quarter witnessed an uptick in price sensitive segments like Morbi ceramic segment due to lower spot LNG prices. This led to an improvement in YoY growth in Q1FY18 volumes. We expect GGL's volume growth momentum to continue in future mainly due to higher...

PNG Domestic: In domestic sector , PNG is primarily used as cooking fuel and for water heating being a safer alternative than LPG cylinders. PNG Industrial: Natural gas is mainly used in industrial applications like heating, cooling, power, processes and manufacturing. The company is supplying PNG...

ICICI Securities Ltd | Retail Equity Research Gujarat Gas announced its Q4FY17 results, which came in below our estimates on the profitability front. Revenues increased 1.6% YoY below our estimates at | 1400.2 crore (our estimate: | 1441.6 crore) on account of marginally lower-than-expected volumes Volumes increased 11% YoY to 6.1 mmscmd, marginally lower than our estimate of 6.3 mmscmd. EBITDA declined 34% YoY to | 146.3 crore, below our estimate of | 204.6 crore mainly on account of...

Results came below our and consensus' estimates at the operating level. This is largely attributable to a sharp increase in RM cost (contracted and SPOT LNG prices) in Q4FY17. Thus, EBITDA came in at Rs1.4bn (-14.4% qoq) versus our estimate of Rs1.8bn while PAT came in at Rs331mn (-21.6% qoq) against our expectation of Rs490mn. Gross margin came in at Rs5.3/scm i.e. a decline of 55bps qoq while EBITDA/scm declined by 59bps qoq to Rs2.7/scm. However, volume grew by 14% qoq to 6.06mmscmd which we believe is the silver lining in the results. Due to plant shut down in the LNG terminal, company replaced RasGas volume with...

Gujarat Gas announced its Q3FY17 results, which came in line with our estimates on the topline front. The revenues declined 17.1% YoY to | 1230.9 crore (our estimate: | 1230.8 crore) The volumes declined 1.9% YoY to 5.3 mmscmd, largely in line with our estimate of 5.1 mmscmd. The gross margins increased by 10.9% YoY to | 5.8/scm, however, came below our expectation of | 6.6/scm. EBITDA increased 8.9% YoY to | 170.9 crore, and came below our estimates of | 207.6 crore...