Sharekhan has given Buy recommendation for Gujarat Gas with a target price of Rs. ekhan is bullish on Gujarat Gas has recommended buy rating on GGAS with a revised PT of Rs. 840 in its research report issued on Oct 28, 2021
The recent sharp 16% correction in GGAS’ stock price in last three months factors in near term margin concerns and provides attractive entry opportunity as gas sales volumes growth outlook (supported by regulatory push to curb pollution and ramp-up of new GAs) remains intact for GGAS. Strong volume growth (expect a 20% CAGR over FY21-24E) and proactive pricing action to protect margins would result in robust 22% PAT CAGR over FY21-24E and superior RoE/RoCE of 29%/32%. Hence, we maintain our Buy rating on GGAS with a revised PT of Rs. 840. At CMP, the stock trades at 21.6x/17.7x its FY23E/FY24E EPS.