ICICI Direct has given Buy recommendation for Gujarat Gas recommended buy rating on the stock with a target price of Rs 655 in its research with a target price of Rs. 655 in its research report issued on Jun 03, 2021

ICICI Direct’s research report on Gujarat Gas

Gujarat Gas’ Q4FY21 results were ahead of our estimates on the operational and profitability front. Revenues increased 28.6% YoY to Rs 3428.9 crore (our estimate: Rs 3465.1 crore) as sales volume jumped 22% YoY during the quarter. Sales volume at 12.1 mmscmd was above estimate of 11.7 mmscmd. Realisation was at Rs 31.4/scm (our estimate: Rs 32.9/scm). Gross margins at Rs 7/scm were in line with expectations. EBITDA was at Rs 554.3 crore (up 29.9% YoY) above our estimate of Rs 507.3 crore on account of better operating leverage. Subsequently, reported PAT increased 42.3% YoY to Rs 349.9 crore, above our estimate of Rs 302 crore.

Outlook

We maintain BUY rating on Gujarat Gas with a revised TP of Rs 655 (26x FY23E EPS, earlier TP Rs 505/share).

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