Gujarat-Gas-Limited-CMP

Gujarat Gas Limited is India’s largest City Gas Distribution player with its presence spread across 23 Districts in the State of Gujarat, Union Territory of Dadra & Nagar Haveli and Thane Geographical Area (GA) (excluding already authorised areas) which includes Palghar District of Maharashtra.

Stock Details

Market Cap. (Cr.) 21316.00
Face Value 2.00
Equity (Cr.) 137.68
52 Wk. high/low 330.00/162.20
BSE Code 539336
NSE Code GUJGAS
Book Value (Rs) 48.19
Industry Gas Distribution

 

Share Holding Pattern %

Promoter

60.89
FIIs 9.44
Institutions 7.40
Non Promoter Corp. 14.94
Public & Others

Government

7.32

0.00

Total 100.00

Gujarat-Gas-Limited-Price-ChartKey Highlights:

  • The company has India’s largest customer base in Residential, Commercial and Industrial segments.

  • In 10th CGD bidding round announced by PNGRB the company has won 6 GAs comprising of 17 cities in the state of Punjab, Haryana, Madhya Pradesh and Rajasthan, making GGL a pan India Company.

  • The company reported consolidated net profit of Rs 59.07 crore in Q1FY21, down 74.76 per cent YoY. Consolidated net revenue in Q1FY21 stood at Rs 1,107.36 crore, declined 58.54 per cent YoY.

  • Gujarat Gas reported better-than-expected margin of Rs 4.9/scm (higher QoQ as well), while volumes were in line with estimates.

  • Despite lockdown, Gujarat Gas was able to add 13 new CNG stations during the Q1FY21 quarter and plans to add 60 new CNG stations this year which should further grow the reach of CNG in Gujarat.

  • The Government is promoting the usages of clean and green fuel, i.e. Piped Natural Gas (“PNG”) and Compressed Natural Gas (“CNG”) by expanding the coverage of CGD network in the country.

  • PNGRB is expected to introduce competition in areas where marketing exclusivity has already expired. Under the proposal by the PNGRB, distribution companies would have to provide access to third-party companies to pay to use their infrastructure to market CNG and PNG. Gujarat Gas has the lowest margins among peers; thus, it is not lucrative for third-party competitors. Gujarat has been passing on the benefits in sourcing cost to its customers.

Outlook

Gujarat has more than 24,000 kms of gas pipeline network. Company’s long term volume growth outlook remains robust as structural gas demand drivers like ban on polluting fuels and low spot LNG prices ($2-3/mmBtu) are well-placed and would lead to robust gas consumption growth in India. Due to the increasing focus on industrial pollution, it would be easier for Gujarat Gas to coup up lost volumes from the five clusters and newer Geographical Areas. The company is trading at 16.9x FY22 EPS of Rs 18. Thus Investors can accumulate the stock at CMP for the target price of Rs.365.

Particulars Distribution Network
Domestic PNG Base Commercial  PNG Base Industrial PNG Base CNG Stations
Customer Base >1.45 Million >12300 >3700 >400
Market Share 30% 47% 44% 23%
Sales Composition 8.10% 1.70% 68.40% 21.80%

Financial Performance

Particulars ( in Rs. Cr.) FY20 FY19 FY18
Net Sales 10300.34 7754.41 6174.33
Other Income 83.89 113.05 37.11
Total Income 10384.23 7867.46 6211.44
Raw Material Consumed 7881.62 6084 4678.61
Raw Material as % Sales 76.5% 78.5% 75.8%
PBIDT 1718.13 1079.82 932.17
Interest 192.17 196.19 196.08
PBDT 1525.96 883.63 736.09
Depreciation 317.98 288.01 271.82
PBT 1207.98 595.62 464.27
Tax 9.16 177.17 171.83
Profit After Tax 1198.82 418.45 292.44
Equity 137.68 137.68 137.68
Face Value 2 2 10
EPS 17.41 6.08 21.24
PBIDTM (%) 16.68 13.93 15.1
PATM (%) 11.64 5.4 4.74

 

Shareholding Pattern ( %)
Shareholders Q1FY21 Q4FY20 Q3FY20 Q2FY20
Promoters 60.89 60.89 60.89 60.89
FIIs 9.44 10.03 11.29 12.23
Institutions 7.4 7.03 6.26 5.73
Non Promoter Corporate Holding 14.94 15.13 15.02 14.93
Public & Others 7.32 6.93 6.53 6.22
Totals 100 100 100 100

 

Key Financial Ratios FY20 FY19 FY18 FY17
Return on Equity (%) 36.13 18.97 15.66 13.25
Return on Capital Employed (%) 22.93 14.74 12.76 10.29
Total Debt/Equity 0.55 0.95 1.19 1.38
Interest Coverage Ratios (%) 7.29 4.12 3.36 2.45
EV/EBITDA 9.98 10.93 14.51 16.63

DISCLOSURE IN PURSUANCE OF SECTION 19 OF SEBI (RA) REGULATION 2014

Elite Wealth Advisors Limited does/does not do business with companies covered in its research reports. Investors should be aware that the Elite Wealth Advisors Limited may/may not have a conflict of interest that could affect the objectivity of this report. Investors should consider this report as read more


For Daily Share Market Updates, Daily debt market review, Market Research Analysis reports, Weekly Techno-Funda Report, Fundamental Analysis Report, Monthly Recommended stock Picks, Equity Trading Tips, Upcoming IPO/NFO/Bonds/Ncd’s updates & other related information Subscribe our research plan